The last thing you want to find out after starting your business is that you have failed to conform to the law by not filing for the right permits for your business. Before establishing a small business, you should pay attention to your town, city, and county regulations. In most locations, every business needs a basic license which is sometimes called a tax registration certificate. Apart from this, other permits and licenses may be required as well. Business license and permits are issued at all levels of government - federal, state and local (city, County, or town). Depending upon the kind of business you’re running, you may need to apply for licenses at multiple levels. For example, if you decide to open a restaurant, you will need a business license and health permits. Not sure what kind of license or permit you need for your business venture? Well, as usual, we’ve made it simple for you. Below is a quick checklist covering the most common federal, state, and local licenses and permits you may need to acquire before commencing business.
Basic business license
Business license - this is the basic license that you will need to operate a business legally. If the businesses located within city limits, a business license must be obtained from the city; if outside, it is procured from the county. Contact your city’s business license department to file an application. Also remember that you need to pay an annual fee. Federal employer identification number(EIN) ? also known as a tax identification number, this is required for all all types of business. Depending on where your business is located, you may also need to acquire a similar tax identification number from your state.
Types of business license
Health department permits - if your business involves the preparation and/or sale of food, you will need a county health department permit. Note that the health department will inspect your facility before issuing one. Sales tax license ? this business license is essential before you could sell almost any product or service in any state. Fire department permits ? businesses such as restaurants, day care centers or any other business that attracts a large crowd need to have a permit from the fire department. Special state issued business licenses or permits ? you may need special business license if your business involves sale of certain types of products including liquor, lottery tickets, gasoline and firearms. Special state issued occupational professional licenses ? in many states people in certain occupations most of the business license or occupational permits. State licensing is typically required for auto mechanics, plumbers, electricians, building contractors, collection agents, insurance agents, real estate brokers, repossession and personal service providers (beauticians, cosmetologists, therapists and masseurs). If you’re thinking of starting any of these businesses, you’ll have to pass a state examination in order to get the permit. Contact your state government offices to get a complete list of occupations that require licensing.
Special business license
Special federal business license or permits - you may also require special business license from the federal government if your business involves investment advising, drug manufacturing, preparation of meat products, broadcasting, manufacturing tobacco, alcohol or firearms. Business license and permit requirements for small businesses vary from state to state; it is therefore good idea for you to contact your state and local government to determine the specific obligations for your new business.