LICENSES AND PERMITS

LICENSES AND PERMITS: YOUR GUIDE TO GETTING STARTED

After registering your company, you will need to obtain the necessary licenses and permits to legally operate your business. The specific permits and licenses required will depend on your business location, industry type, and entity type, such as an LLC, C-corp, nonprofit, etc. There are experts who can conduct the research for you, allowing you to focus your time and effort on growing your business. However, if you’d like to save a buck or two, you can do it yourself.

Below, you will find helpful information and links to get you started.

Why Do You Need Business Licenses and Permits?

Before you can legally operate your business, you must secure the appropriate licenses and permits. These legal documents authorize your business to conduct specific activities and serve as proof that you are in compliance with local, state, and federal regulations. Failure to obtain the necessary licenses can result in fines, legal action, or even the closure of your business.

Three Main Licensing Jurisdictions.

When it comes to business licenses, there are three key players in the game: federal, state, and local authorities. Each has its own rules and requirements, so it's crucial to know what’s needed in your specific situation.

1. Federal Licenses

Not every business needs a federal license, but if you’re venturing into certain industries, Uncle Sam will want a word. Here are a few examples:

Alcohol, Tobacco, and Firearms: Planning to open a craft brewery or sell cigars online? The Alcohol and Tobacco Tax and Trade Bureau (TTB) and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) have some paperwork for you.
Aviation and Transportation: Thinking of launching an airline? You’ll need to get the green light from the Federal Aviation Administration (FAA).
Broadcasting: Radio and television stations must obtain a license from the Federal Communications Commission (FCC).

For a comprehensive list of federally regulated industries, you can visit the U.S. Small Business Administration (SBA) website.

2. State Licenses:

State licenses can vary as wildly as the weather in Kansas. Here's what you might encounter:

Professional Licenses: If you’re a doctor, lawyer, or hairstylist, you’ll need a professional license. Even pet groomers and tattoo artists have to check in with the state board.
Sales Tax Permits: Selling products? Most states require you to collect sales tax. This means obtaining a sales tax permit from your state’s revenue department.
Health Department Permits: Running a restaurant or food truck? You’ll need the nod from the state health department to ensure everything’s up to code. No one wants a side of food poisoning with their burger!

3. Local Permits:

Your city or county might have specific licenses and permits you need to operate, so don’t forget about these crucial details:

General Business License: Most businesses need this standard license to legally operate within city or county limits.
Zoning Permits: Opening a doggy daycare in your basement? Make sure your location is zoned for your type of business.
Sign Permits: Want to put up a giant neon sign? Check with your local government to avoid having to take it down.

How to Apply for Business Licenses and Permits.

Step 1: Start Locally

Your first stop should be your city or county’s business licensing department. They'll provide you with the necessary application forms and any specific requirements for your area.

Example: If you’re starting a coffee shop in Seattle, you'll need a business license from the City of Seattle's Department of Finance and Administrative Services. They’ll walk you through the process, from applying for the license to understanding your tax obligations.

Step 2: Research State Requirements

Visit your state’s business portal to see what specific licenses your business needs. This is where you’ll learn about professional licenses, sales tax permits, and any industry-specific requirements. Check out the state your business is registered in.

Note: If your business is registered in multiple states, you must comply with the regulations established in each state.

Step 3: Check Federal Regulations

If your business involves activities regulated at the federal level, visit the appropriate federal agency’s website for application instructions.

Example: Starting an e-commerce store selling handmade jewelry with gemstones imported from abroad? You might need to check with U.S. Customs and Border Protection for import regulations and permits.

Step 4: Keep It Legal

Navigating the world of business licenses and permits might not be as thrilling as launching your first product, but it’s an essential part of running a successful business. By taking the time to research and apply for the necessary licenses, you’ll avoid potential fines and keep your business on the right side of the law. You can also skip the tedious work and have a professional do this for you.

Step 5: Renew and Update Licenses as Needed

Many licenses and permits require regular renewal. Keep track of expiration dates and renewal requirements to maintain compliance. Additionally, update your licenses if there are changes to your business, such as a change of address or business structure.

Getting your business licenses and permits might seem like a daunting task, but it’s a crucial step to ensure your business sails smoothly. With a bit of research and determination, you’ll be well on your way to turning your business dreams into reality.

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