If you are the owner of a business, you might need special permits, licensure, or certificates in order to operate. Depending on the type of business you own, you may even need more than one of these documents. Business permits give owners the right to legally operate a business in their city, state, and country. These legal requirements will vary widely depending on the industry, so it is important to learn about which permits you will need and how to access them so you can get your business up and running.
What is a Business License?
A business license is a legal document that secures your business’ right to operate. Most permits come from local, state, or federal agencies. These permits and licenses ensure that your business is up to date on healthy and safety guidelines. They also ensure that your business meets the legal and educational standards in your area.
Federal Licenses and Permits
For many small businesses, the government doesn’t require a license or permit. However, there are some types of businesses that are regulated by federal agencies and do require a federal license or permit. Some examples of these type of businesses are:
- Alcoholic sales
- Firearms, ammunition
- Fish and wildlife
- Commercial fishing
- Maritime transportation
- Nuclear energy
- Radio and television broadcasting
- Transportation and logistics
State Licenses and Permits
There are some states in which all businesses need to obtain a state business license in addition to local licenses. These states include Alabama, Alaska, Delaware, Florida, Ohio, Nevada, and Washington. Not all businesses will be required to have a state license or permit but there are a variety of businesses and occupations that do require special licenses. These include:
- Medical professionals
- Builders and Contractors
- Architects and Engineers
- Real Estate Brokers
- Private Investigators and Security Services
How to Obtain a Business License
Every business will have its own requirements regarding licensure, but you can follow these steps to make sure your business obtains the proper licenses and permits.
1. Register Your Business
You must start by establishing your business as a legal entity and must choose your business structure. (Sole proprietorship, general partnership, limited liability company, corporation, nonprofit corporation)
2. Apply for a Tax ID
Your business will not be permitted to operate without a proper tax ID.
3. Research the Permits You Need
You can do this by contacting your local Small Business Administration office for details about licensing requirements.
4. Prepare Your Business Documents
Gather all of the necessary documents needed to apply for your business license. This generally includes the following items:
- Filing fee
- Business tax ID
- A description of the company and how it operates
- Copies of corporate documents
- A list of owners, investors, or managers who have permission to sign agreements
- Audited financial statements
- Insurance information
- Any educational or professional certifications that are required to perform your service
5. Apply for Your License
You may have to apply for multiple licenses with different local, state, and federal agencies. Your local Small Business Administration can direct you on where to access these applications.