What licenses are needed to start a business?
Business license varies from state to state, local to local and industry to industry. Most of the states in the U.S. require licensing when a business is registered. It doesn't depend on whether you are operating from home, on the internet or out of the commercial location. You will have to apply for few types of business license depending on the types of business you are planning to start to be a legal seller in your locality.
Why do you need to apply for licenses and permits for business?
A business license is one of the vital parts of any business. It doesn't matter if you are starting a small business, restaurant, a daycare or any other online business, you need to ask for permission to operate your business to your state government. These licenses make your business legal and let you be a contributing factor in the society. The license shows your clientele that you have legally registered to open up a business and they can rely on you. It also shows that you recognize all the state, local and federal government rules and will abide by all the rules your government imply on you.
A basic small business license will grant you the right to operate your business. This license depends on the state and city you live in and your county business code. To work within your city's limit, your government needs to issue a local business license.
To find out what business license you need, go to your city hall or visit your city website and obtain your license.
If you are starting a business that is situated outside of your city's limit then your county government will grant you the right to operate your business.
After your application for a local business license is done, your city zoning department will check if your business's location and area are zoned for your business type. They will also check if the parking area around your business meet the local zoning code or not.
If you are starting a business in an area where the same types of business have already been zoned for then you do not need permission for land use or specific zoning.
Otherwise, you need to present your case before your city's planning committee to get a conditional-use permit and also need to show to the committee that operating your business in that particular area will not harm or disrupt the safety of the neighborhood.
If operating your business requires building a new building, renovation or installing appliances or utilities then you need to get building permits from your local government. Your government needs to make sure that you are abiding by the safety codes and local requirements when you are building or renovating. Make sure your license-contractor is responsible enough to secure your business with your local government.
Sometimes many businesses deal with flammable materials. In that case, you need to apply for a fire department permit and show them that your business is safe for people. Any business that involves public or invites them needs to ask for health license. Restaurants, gym, hotels need a fire department license and as well as a health license.
Any business that deals with public health like serving food or facilitates exercise needs to prove to their local government that their service is safe for customers to obtain a license.
Local and state government usually permits the environmental license. You need to prove your government that your business will not harm the environment. Your state governments make sure that you are maintaining air and water quality and also abiding by waste removal requirements.
The environmental license has become more strict because of the abuse of firms disrupting environments and affecting local habitats. With increasing public concern for the way businesses are affecting public health has made the law tougher over the years.
Some cities and counties have restrictions on how a businesses' signage can look like. It basically focuses on how the size, visibility, location, and lightning. You will be fined a serious amount of cash if your business signage does not comply with the government's rule.
Check with your local government to make sure you are following all the rules, your signs are legal and safe to use.
Some states require a license for people in certain occupations. States usually require a license for plumbers, auto mechanics, collection agents, real estate brokers, electricians, insurance agents, building contractors or anyone who provides personal service like doctors, nurses, barbers. People with these occupations usually need to sit for state examination and pass to obtain a license to conduct business.
To get the complete list of occupations that require permits or licenses, you need to contact your state government office.
Few types of business like Radio, TV station, meat processors and investment advisory service need federal licensing to conduct business. To get the complete list of business that requires federal licensing, contact the Federal Trade Commission.
In most cases, a federal permit is not required. But it's a good idea not to take a chance.
Any home-based business that sells taxable goods or service must pay sales tax. But the definition of the taxable sales can vary from state to state. Every state has different rulings about what parts and labor of the bills may be taxable. This type of license is also known as "Seller's Permits" or "Certificate of Authority".
Sales tax depends on the retail level. It varies from state to state. Before you start a retail business in your locality, make sure you collect your state sales tax on each sale you make.
Make sure you register to collect your sales tax before operating your business by applying for each separating business location in your state. Remember that many states take selling without state's sales tax permission as a criminal offense.
County government also needs to permit the same types of licenses as cities. If your business location is outside of city or town's jurisdiction then you must apply for county permits. Usually, these permits are not very strict like other business operating license.
Many cities now enforce business to use environment-friendly materials or equipment. They have departments to work to control air and water pollution. If any business needs to burn any materials, dispose anything into sewers or produce gas then you need to apply for air and water pollution license to prove that your business will not harm the environment. Your county or city government will grant a special permit to run a business like that.
You will also need to get approval from Environmental protection regulations before operating your business or beginning any construction regarding your business. Contact the environmental protection agency of your state to know what type of federal or state regulations applicable to your business.
Every home-based small business needs a home occupational permit to operate their business legally. Even freelancer or consultant operating from their home also need home occupation permits.
Sometimes business operators create traffic, noise and cause disruption in their area. Before approving a home occupational license, the state government makes sure your business is abiding by every rule and will not harm the natural habitats of your area.
Before your small business gets to register for the state level, it needs to register at the county or local level first. So they hold a vital importance in starting up your small business. Local business license or local business permits are quite easy to obtain. These licenses cost low so you don't need to worry too much about the money. Just simply apply for obtaining your local licenses or permits to operate your business legally.
Contact your county courthouse or state agency to know about the requirements for each small or big businesses' licenses or permits. Each license needs specific requirements. When you contact the courthouse or state agencies, they will be able to provide more information. Also, many state government has a tool that is called "Permit Me" which gives a list of all requirements for licenses and permits.
The checklist might be exhausting. But obtaining the right business license is the only way you can operate your business legally. What most business owners do is ignore the permits and licenses before starting up a small business. And failing to get licenses for your business can cost you more than you think. It can lead you to fines and possible lawsuits. It's foolish to take chances with your business. If you don't understand all the legal documents and rules, get a professional advisor who knows his way around licenses and permits for small businesses.