Registering your small business, finding funding, and outfitting an office with equipment are exciting, key steps in launching a company. But don’t overlook an equally crucial task: getting business licenses and permits so that you can operate legally. Wondering how to get a business license? AD PRO has you covered.
Most small businesses need a combination of licenses and permits from state and municipal agencies; some will require federal licenses or permits as well. Requirements and fees can vary tremendously based on your business operations, location, and government rules, so it’s critical to look into the requirements for your particular state, municipality, and county. (Filing fees could cost between $50 and a few hundred dollars.) Though many licenses and permits are easy to apply for and most paperwork can be submitted online, if your licensing is more complex, you may want to consider hiring a lawyer. Whichever way you go, here is how to get started.
1. Research your state
Whether or not you need a state license will be determined by where you are operating and what business activities you participate in. While the federal government regulates certain business activities, states tend to regulate more heavily. You’ll almost certainly need a license or permit across the U.S. if your business handles insurance, plumbing, food preparation or service, construction, banking, retail, or real estate. To get started, research how to get a business license in your state. Your state’s division of taxation or the secretary of state’s office are also good places to begin.
Tip: If you haven’t decided where to launch your business, the U.S. Small Business Administration can help you find the most beneficial taxes, zoning laws, and other regulations by region.
2. Find out what licenses your city, town, or county requires
Municipal and county websites should have this information and forms online. If they don’t, phone city hall or visit in person to get the information and paperwork you need. In some cases, local permitting will be even more stringent and specific than state regulations.
3. Know if you require a professional license
Some occupations require a separate professional license to operate within a state. For example, practicing as a certified interior designer in New York requires licensure, whereas in other states such distinction may not exist. Your state’s website should outline specifics, but if you’re not sure, check with a regulatory board—such as ASID for interior designers—for state-by-state specifics about your profession.
4. What if you’re a DBA?
In many cases, if you are operating as a sole proprietorship or “doing business as,” your city or town still wants you to apply for a business license, even if you work from home. (If you’re selling retail or wholesale goods, the state most likely will, too.)
5. What you need to get a business license
As a baseline, be prepared to submit the following information when applying for a business license:
• Your industry and activities
• Type of small business structure
• Business address and contact information
• Business owners’ names
• Your federal ID number (EIN)
• The number of employees working for you
6. Don’t let licenses and permits expire
Many state licenses expire after a set period of time, often one to three years. Be careful not to let yours expire—it’s often easier (and less expensive) to renew than it is to reapply.