How to get a business license

Starting a business requires a lot of preparation no matter what industry you’re getting involved in. Allowing your business to operate legally almost always requires you to get a business license of some sort.

This article will take a look at what business licenses are and what you need at the local, state, and federal levels to make sure your business is able to operate without any fear of having to shut down due to legal issues.

WHAT IS A BUSINESS LICENSE?

Business licenses are permits issued by a government agency that allow people or companies to perform business operations within the government’s jurisdiction. For some businesses, you may need to get multiple licenses.

A business license can come in many different varieties and can be obtained in various ways as well. Much like there are a multitude of different businesses there are business licenses to cover just about all these.

CAN YOU BE DENIED FROM GETTING A BUSINESS LICENSE?

Yes. It is possible you can get denied a business license if you did not complete your application, leave it unsigned, or if it does not get authenticated by the right people.

It’s a good idea to talk to whatever licensing agency you’re working with and make sure you have the right form and what steps you have to take if you are unclear with filling out certain parts.

LOCAL BUSINESS LICENSES

A business license is typically granted at the city level after you get a tax registration certificate and pay a fee that allows you to legally perform business activities in that local area.

The types of licenses and permits you’ll need will depend on different factors such as, the type of business you’re in, it’s location, and the specific business needs.

For example, if your business is a restaurant that wants to serve alcohol and have an outdoor patio, you may need a local business license to open a restaurant in that location, a license to serve alcohol, and a permit to build an outdoor patio.

You would need to fill out three different applications in this case and possibly have to go to three different government departments to get them.

STATE BUSINESS LICENSES

The diversity among laws regarding permits strongly vary from state to state. Some states have licenses that involve sales tax while others do not and some businesses are flat out unable to get licenses in certain states, thus unable to operate.

There is some consistency between every state, like every state having an alcohol control board. However, if there is a common thread between all states to get a business license it often goes under federal business licenses.

FEDERAL BUSINESS LICENSES

The federal government generally only requires permits for specific industries. For example, you’ll need to look at the federal government’s requirements if you plan on manufacturing alcohol, opening a commercial fishery, or opening a gun shop.

You may have to do some digging to find out if your business requires a federal business license because it is very important to have one if your operation requires it.

COMMON TYPES OF BUSINESS LICENSES

Business license types will vary by state and local law but there are a few areas where you almost always will need to apply for one. Here is a list of a few of the most common ones:

Land Use and Construction

If you plan on creating a structure on a piece of land, you will likely need a construction permit from the municipal government. You should be able to find the information necessary to do this on your city’s government website.

If you’re using or building any kind of a facility, you will need the space to be outfitted up to corresponding legal codes and to function your business properly.

Alcohol Licenses

If you are selling alcohol, your business will need a liquor license. Most restaurant owners and all bar owners will need to go through this process and if you are manufacturing alcohol, you will need to obtain a federal permit.

Also, there are some states that will require your employees to get liquor licenses to serve alcohol, which is often done through online courses taken every few years.

Parking Permits

If you need street parking around the area of your business, you will need to obtain a parking permit from your city government for any company cars you will have on the premises.

If you are constructing a parking lot, this will fall under construction and land use and you will need a different permit for that. Keep in mind that your business’s parking lot must be compliant with the Americans with Disabilities Act as well.

Industry-Specific Licenses

There may be industry associations in your business field that will require you to apply or fulfill testing requirements to.

For example, if your company sells food, you will need a passing grade from the health department as well as the necessary permit. Be sure to research your specific industry sufficiently so you have all of the licenses you will need.

Natural Resource Licenses

Most state’s counties have regulations involving possible pollution of both air and water in place for businesses. You should look for which laws may apply to your business, especially if you must dispose of waste regularly.

Also, if you deal with any hazardous materials, you may need to be in compliance with other regulations regarding pre-disposal storage of these kinds of materials.

SUMMARY

Getting the right business licenses is absolutely necessary and it is your responsibility to acquire the right ones. Without these you will be leaving yourself open to all kinds of risks, such as hefty fines and legal action if something happens on your premises.

One of the main parts of being a business owner is getting these licenses and permits dealt with before opening up and keeping them up to date if they expire. Obtaining them can be time-consuming, but it is typically a simple task and is an integral part of running a company the correct way.