Business Licenses and Permits Needed to Start a Business

When starting a new business, setting up the proper legal requirements such as business licenses and permits is a vital step for successful business continuation and for working in compliance with local and federal laws. Whether you are a home based business or small business establishment, there are a variety of business licenses and permits that may be required for the operation of your business.

Business Licenses

Not all businesses will require a business license, but it is better to check prior to starting a new business. Check out the State-by-State Guide to How to Start a Business to determine if and what type of licenses may be required. Generally, the largest consideration is the zoning of the area in which you are running your business. If your area’s zoning does not permit the type of business that you are either operating or seeking to operate, you may be required to apply for and obtain either a conditional permit or a variance. It is advised to research the zoning requirements before beginning your business’s operation to avoid any potential temporary shut downs or fines due to a violation.

Here are some permits that may be applicable to the type of business that you are or will be operating:

  • Fire Department Permit - If your business sells or utilizes any flammable material, it is likely that you will need to obtain a fire department permit. Business that house residents and restaurants are the most likely candidates for a fire department permit requirement.
  • Sign Permit - In some areas, there are restrictions to the type of sign, the size of sign and the location of a sign to promote your business. Check with your local planning committee before purchasing or posting a sign for business to avoid any problems.
  • State Licenses - There are some businesses that require the use of state licenses, most commonly for occupational facilities and establishments that work directly with the public. Some businesses will be required to pass initial state examinations in order to have these licenses issued, so it essential to research these requirements before opening your doors for new business. Some common examples of businesses that require state licensing would include electricians, building contractors, insurance and financial agents, and auto mechanics. Most companies that provide services to the public will have some form of state licensing requirement.
  • Sales Tax - If your business will be selling items or reselling items, you may be subject to the requirement of obtaining a sales tax license. The requirement of a sales tax license will vary based upon states, so it is important to check with your state in regards to the requirements that pertain to your business type.
  • Health Department - The most common type of business that will be subject to a health department inspection and certificate will be anything serving food or beverages. The health department permit cost will vary based upon the type of business that you have, the quantity of business you will be facilitating and the type of equipment that will be used.

Overall, when starting a business, there are a number of considerations and factors that need to be addressed and completed in order to be in compliance with the various city, state, and federal licensing requirements. Most of this information will be found on the local agency’s websites or through a local representative. Spend the time to gather this information. It is better to be adequately prepared for all compliance needs than to be surprised with fines or business closure when your business is not in compliance.

Now Hiring in Your Area