What is a Business License?
A business license is a permit which allows you to legally operate your business in a particular area.
Do I need a Business License?
Business license requirements vary by city, county and state and depends on the type of home-based business you are intending to operate.
You will need a business name to apply for the required business licenses.
Types of licenses you may require:
- Zoning: are you allowed to operate a business in your area?
- Fire Department: do you need regular fire safety inspections or a fire department license?
- Sign Permit: before erecting any signs, check whether there are any restrictions regarding the size, type of sign, location and lighting and if you need a permit to put up a sign.
- Sales Tax License: if you intend to sell taxable goods or services, you will need to register to collect sales tax. Check with your state government office if you need a sales tax license and what is defined as sales taxable goods and services (they vary from state to state). Get a clear understanding of the rules as to what is (or is not) sales taxable.
- County Permits: check with your county if you require any licenses.
- State Licenses: certain occupations require a state license. Get a list of these from your state government office.
- Federal License: it is unlikely that you may need a federal license, but check with the Federal Trade Commission first.
- Health Department Permits: if your business involves selling food, you may need a permit from the health department and/or regular inspections by the health department.
- Environmental Protection: depending on the products and materials you use in your business, you may need an air and water control permit from your city or county.
Visit your local city government office or contact your state government offices to determine if you need any licenses for your business, which ones you require, how to apply and what they will cost.
Do not assume you do not need a business license because you have a home-based business.
You can also use the Small Business Administration’s (SBA) permit tool finder to identify which licenses or permits you need.
Registering A Business Name
Usually you do not need to register as a sole proprietor if you are using your own name as a business name. However, if you are using a trade name or Doing Business As name (also known as a fictitious name) you will have to register that business name.
If your business form is a partnership, limited liability company (LLC) or corporation, then you have to register your business with your state government.
Visit the SBA for more information on choosing and registering a business name.