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Now that you’ve finally decided to venture into a business that interests you, you have to create a list of what you’ll need to set it up. One of the most important things you’ll need is a business license to legally operate your business.

You will also be required to follow the business licensing requirements and rules for the particular state you want your business to operate from.

Although business licenses vary from state to state, we’re going to discuss the common types and why you need them.

What is a State Business License?

A state business license is defined as a document that serves as proof that a business is permitted to legally operate in a particular state. Business licensing is usually done at the local level or at the state level. But, some states demand that it be done at the state level. 

It is important to understand if your business needs a license and why it needs it.

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Who Needs a Business License?

If you’re wondering whether you need a business license or not, the answer depends on the type of business you have. 

Once you have decided on a business entity; that is, whether your business will operate as a partnership, a sole proprietorship, a corporation, or a limited liability company, you can then file for your required business licenses.

This is because you are required by every state, including some cities and counties, to have one type of business license if you’re interested in conducting business there. This does not exclude running a business from home. 

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You will still need a business license or permit which could be a sales tax permit. You will be required to get more business licenses and even inspections if you’re planning to open a daycare or a local restaurant to ensure you comply with the industry standards and regulations.

Venturing into commercial real estate may require getting a zoning permit. This permit is to regulate your activities in the space allocated to you. It will ensure that your plan for the space is related to what it has been zoned for.

Therefore, It is important that you fully understand what licenses you are going to need and carry before you start your business. Now let us look at where you can go to get a business license.

Where to Go for a Business License

We compiled a list of state business licensing resources that will steer you in the right direction. 

  • The town clerk or local SBDC: This is probably the best place to start because most of the licenses/permits you need to get your business running are city-level permits. Visit your city clerk to get a full list of the required permits or licenses so that you can cover all your bases.
  • Small Business Advice (SBA): Get information about starting and running your business on SBA.com. It also has information about obtaining a business license and permits specific to states because some states have more information than others. It is worthy of mention that small business advice is different from small business administration. So try not to mix them up.
  • Small business administration: You will find information about federal permits or licenses for different industries on SBA.gov, however, it has little information about the state licenses.
  • City Applications: Go on CityApplications.com for contact information at the city level about business licenses and permitting information. 

Visit any of the above-listed cites to learn more about how you can get your business licenses done.

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General Licensing and Business Registration Requirements in the US

The business structure is a determinant of what you need to register and document in the United States. It is required by some of the states in the US that you provide reports on your business soon after registering it.

Hence, you may need to visit the state tax board or franchise tax board to file additional documentation. These additional document fillings are referred to as Tax board registration or Initial Reports. 

Note that you will need to fill these forms within 30-90 days after you register with the state. You can confirm from your local tax office if this additional documentation applies to you.

Business Licensing Resources for the Five Largest States by GDP

  • Business license requirements for New York

Before you can open a business in New York City, you will need to register with the federal, state and local agencies. Also, you will need to have established your business structure.

Here are the licenses and permits you will need: General Business License, Building & Zoning Permits. Sales Tax Certificate of Authority, Resale Certificate. Occupational License,  Employer Identification Number (EIN), Assumed Name Registration.

  • Business license requirements for California

You need to obtain a business license at the city level or county for tax purposes in California. The only exception to this is some areas in the county that are unincorporated.

In addition, depending on your location and type of business, you may need other licenses or permits from your local government.

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  • Business License requirements for Texas

You do not need a general business license to operate in Texas. However, you must determine what certification or licenses are required for your type of business.

You must also obtain the only state-level permit which is the sales tax permit. Visit the Texas business permits and licenses guide for more.

  • Business license requirements for Florida

The industry you want to start a business in may require a state of Florida license. In fact, you will need a general business license known as a business tax receipt to operate your business. Regardless of if you operate from your house or from a commercial location.

You can register for the business tax receipt online for free.

  • Business license requirements for Illinois and Pennsylvania

Both Illinois and Pennsylvania do not require a general business license at the state level, you must have local licenses. Check-in with your local clerks to obtain information on what registration is required for your type of business.

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Common Mistakes When Applying for a Business License

People make mistakes when they apply for business licenses or permits. Some of these mistakes are: 

1. Checking the zone’s rule after signing a lease

This is a very common practice among new business owners. They sign a lease before checking the rules for the city or state zone in which they intend to start their business. 

Oftentimes, they realize their business does not fit into the rules of the zone or their business mode of practice is limited. This is why it is best to check with the planning and zoning department of this city that you plan to start your business and ensure that you are on the right path.

2. Improper state license for a particular business

People sometimes apply for licenses for a particular business that requires an additional license from the state which they do not have. There are some professionals that commonly make this mistake, some of them are Nail Technicians, Electricians, Massage Therapists, Construction companies, Cosmetologists, Estheticians, and others.

3. Being unprepared

Business registration is an important part of setting up or getting started with your business, but this requires a lot of research. It is important that you make sure that your registration matches your business time and that you get the correct tax numbers. 

You can visit the business registration jurisdiction so they can give you all the required information before you start so that you do not make mistakes.

Free Business Licensing & Registration Templates to Explore

You can check out the free business license form template on Formplus.

Login to your account, you can input the name of the form in the search bar. 

Click on the “Use selected template” and your template will be moved to the form builder.

Go ahead to input your details into all the columns. You can use any of the sharing options to share your form about completion. Here’s an example of what your finished template should look like;

FAQs

  • Do I need a business license if I have an LLC? 

Yes. LLC is not a business license, it is a type of business structure. Even though you’re required to register your business as an LLC, it is not a business license.

  • How much is a business license in NY?

The price of business licenses varies across the board. In most cases, it should not exceed $300. However, you do not need to pay a fee to register for the sales tax certificate of authority.

  • Do online businesses need a business license?

The answer is Yes. A business license is a crucial requirement for establishing a legal business and conducting online sales. As long as you sell any product or services that qualify for sales tax, then you need a business license even if you have no physical store.

  • What paperwork do I need to start a small business?

You will need your Business Plan, Articles of Incorporation or Organization, Certificate of Assumed Name, Employer Identification Number, Professional Trade Licenses, Local Licenses, and Permits.

Conclusion

Let filing for business permits or licenses be on your list of priorities when planning on starting a business. In some cases, you can’t officially launch or open a business without those licenses, that is why you should conduct a thorough research about the right business licenses for your business and then plan ahead.

Find out the licensing fees you may have to pay and obtain your licenses before your opening day. Also, know that the responsibility of renewing your business licenses is on you, and you may not receive a reminder email to renew them.

So take note of the expiration dates so that you can remain compliant with your local and state authorities. 



  • Formplus Blog
  • on 8 min read

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