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Applying For A Business License

Applying for a business license is required in order to operate virtually any kind of business. The type and specific licenses required are governed by the local, state, and federal jurisdictions in which the business resides and operates. Certain types of businesses, such as those in the food, health, and building industries, will generally require state certifications in addition to a regular business license.

Understanding the different types of business licenses required can be a bit confusing for the new small business owner. The intent of this article is to describe the various licenses that you may need in order to legally operate your business.

Business licensing is not a one-size-fits-all concept. Regional requirements as well as the type of business you operate will dictate the type of licensing you are required to complete. You can start with your state’s Secretary of State office as well as your city or county’s City Hall for more guidance regarding small business licensing requirements and procedures.

Before applying for a business license, know the following:

  • Your Business Name: This is the name you will legally register for your business.
  • The Legal Structure of Your Business: Will you be a sole-proprietor, or register as a corporation or partnership?
  • Whether You Plan to Hire Employees.
  • Your Business Location.

Applying For A Business License – License Types

Licensing requirements and fees vary from state to state and depend largely on the business type. Some businesses will only require one license, while others require many. Applying for a business license takes time, so begin the process as early as possible.

Below is a list of the types of licenses, certifications, and business requirements that may be required to run your business:

Federal: Businesses that require a federal business license include aircraft mechanics and transportation, transportation and importation of animals, the manufacture and sale of alcoholic beverages, fish and

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manufacture and sale of firearms, mining, radio and television broadcasting, nuclear energy industry, and transportation of oversize/overweight loads. Each business segment is overseen by its own government agency. Contact the appropriate agency for information about obtaining your federal license.

State: States may require that certain types of business be licensed

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and certified. Professions that may require state certification include health care service providers, building contractors, heavy equipment operators, mental health professionals, real estate agents, and funeral directors. Certifications may involve taking exams and a commitment to ongoing education. Contact your state department to determine if you need a state license and certification.

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also be required to file a Doing Business As (DBA) with the state if your business name is different than your own name.

County and City: A business license will be required from your local county or city offices. In addition to applying for a business license, you may be asked to obtain other permits. Some of these may include occupational, signage, zoning, health, tax, and building permits.

Sales Tax: If your business engages in sales of any kind, your

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state may require that you obtain a sales tax permit. Sales of products and services may be taxable. Check with your state tax office and apply, if necessary. Do not run afoul of sales tax laws. The penalties for violating sales tax laws are severe.

Employer: If you plan to hire employees, are a corporation, or business partnership, you must apply for an Employee Identification Number (EIN) from the Internal Revenue Service (IRS). Also called The Employer Tax ID, the EIN may be applied for online.

The IRS will also supply employers with federal forms and instructions for withholding taxes. Contact your state Department of Revenue for state tax forms and specific information.

Contractor: Almost all states require that certain types of contractors be certified as well as licensed. Certifications typically require examinations to ensure that a contractor has the required skills. Most states require periodic reexaminations to gauge skills on an ongoing basis. Building industry, plumbers, asbestos and lead removal specialists, and hazardous material industries are types of businesses that may require state certification.

Food: Restaurant, food vendors, mobile carts, and other businesses that deal with food are regulated by the state Health Department. Food handling licenses may be required. The Health Department will conduct periodical surprise inspections to look for violations of food safety codes. If a violation is severe, the Health Department will revoke the license and shut the business down until the violation is corrected.

Health: The health industry is one of the most strictly regulated business sectors. Most states require that chiropractors, doctors, dentists, nurses, pharmacists, social workers, and veterinarians receive state certification before opening for business. Those certified must pursue ongoing education in their fields and re-certify periodically.

Safety: State or federal safety certifications may be required for some businesses. Some businesses that may be subjected to safety certification include transporting of hazardous materials and passenger transport.

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In addition, the state Health Department may require safety certifications for food industry businesses.

CDL: A Commercial Driver’s License (CDL) is mandatory if your business involves driving large vehicles, trucks with tanks, trucks with double or triple trailers, or transporting passengers, regardless of vehicle weight. In addition to a CDL, your state may require special endorsements before allowing you to drive in specific situations. Apply for a CDL at your local Department of Motor Vehicles.

Where To Go To Learn More

Your state, county, and city official web sites are ideal sources for business and licensing information in your locale. Many offer online forms for applying for a business license. The federal government’s authoritative business web site, www.business.gov, offers a wealth of

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knowledge, how-to’s, procedures, and resources to assist business owners with licensing regulations. A visit to the IRS web site will provide you with valuable information about hiring employees.

Learning about licensing regulations may seem overwhelming at first. By taking one step at a time and learning all you can about running your business legally at the local, state, and federal levels, you can move through the process with ease and start running your own business.

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