How and Where to Obtain Business Licenses and Permits

How to Obtain Business Licenses and Permits

Starting a business requires dealing with the details, and no matter your industry, there will be some red tape involved in getting started safely and legally.

To operate your business without fear of fines or closure, it is important to make your business an official legal entity and understand the business licenses and permits you need at the local, state, and federal levels.

What is a business license?

Business licenses are permits issued by government agencies that allow individuals or companies to conduct business. You may need multiple licenses to be compliant.

The term "business license" is misleading, as it implies that there is a single license that allows you to legally operate. In reality, you may need various licenses and permits depending on your business activities.

Is getting a business license the same as declaring my business entity?

Obtaining business licenses or permits goes beyond registering your business entity, such as an LLC or corporation. Incorporating your business does not exempt you from fees and paperwork.

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Can you be denied a business license?

A business license can be denied if your application is incomplete, unsigned, or not properly submitted. It is essential to follow instructions and reach out to the licensing agency for clarification.

What types of local business licenses and permits do I need?

Local business licenses are often granted at the city level and allow you to legally conduct business in a specific area. The number and type of licenses depend on factors such as your business type, location, and specific needs.

For example, a restaurant that serves alcohol and has an outdoor patio may need separate licenses for the restaurant, alcohol service, and patio construction.

Note that home-based businesses may require different permits and licenses compared to businesses with dedicated locations.

What types of federal business licenses and permits do I need?

The federal government typically requires permits and licenses for specialized industries, such as alcohol manufacturing, transporting farm animals across state lines, or operating a commercial fishery or gun shop.

Highly specialized or niche industries with increased liability often face additional requirements. The Small Business Administration (SBA) provides helpful resources in such cases.

What types of state business licenses and permits do I need?

Each of the fifty states has different laws regarding permits and licenses. Some states require retailers to register for a vendor’s license to remit sales tax. The SBA website offers general information on state permits.

While local laws may vary greatly, there are some consistencies among states, such as the presence of an alcohol control board.

What are common business license and permit types?

Permit types vary by state and local laws, but there are common areas where you will likely need permits or licenses. These include land use and construction, signage and building exterior, alcohol or cannabis-related activities, parking, natural resource use, and industry-specific permits.

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Land use and construction permits

If you are building a structure, you will likely need a construction permit based on local zoning laws. Contact your city’s government website for the necessary information and applications.

If you are using or building a facility, ensure it complies with legal codes and regulations.

Signage and building exterior

Many local governments have rules regarding signage size, placement, and building exterior appearance. Consider these rules as you develop your business branding and location.

Alcohol licenses and permits

If you sell alcohol, you will need a state liquor license. Manufacturing alcohol requires a federal permit.

Parking permits

If you need street parking for your company vehicles, you must purchase parking permits from your city government. Constructing a parking lot requires permits compliant with the Americans with Disabilities Act.

Industry-specific licenses and certifications

Some industries require specific licenses or certifications. For example, hairdressers, personal trainers, and food sellers need licenses and permits relevant to their professions. Research your industry’s requirements to ensure compliance.

Natural resource licenses and permits

Most jurisdictions have rules regarding business use and environmental impact. If your business disposes of waste or deals with hazardous materials, specific permits and compliance with regulations may be necessary.

Is getting business licenses and permits necessary?

Yes, it is essential to acquire the necessary licenses and permits for your business. Avoiding them puts you at risk of fines and legal liability.

As a business owner, obtaining and maintaining licenses and permits is a requirement that comes with entrepreneurship.

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