Obtain a Business License
Your business needs to be licensed to legally operate. Regulations vary, so it's very important to understand the licensing rules where your business is located—failure to comply can have serious consequences. Fortunately, getting a business license is neither very expensive, nor very time consuming. See Step 1 to learn about getting your business license.
Knowing Local Requirements
- Determine where to get your business license. You'll need to get a license from the city in which you're planning to operate your business. Whether you'll be renting office space or operating your business from your home, you'll need to get a license in the place where your business address is located.
- Every city has a database with a list of addresses that fall within that municipality. Search online for your city's name + business license to find the correct webpage.
- You can also find the right information by way of the US Small Business Administration (SBA)'s website. Whether you are just starting out in business, or are firing up a new venture, the SBA has a wealth of information, not just on rules and regulations, but on everything from how to name your business to how to get funding. Their page on permits offers information where to get licensed, with details specific to your locale and your industry.
- Know your business code. Different business types have different codes, and you'll need to know this information to get a license. Different codes will require specific application processes, and every city has its own set of requirements. You may need nothing more than a simple Assumed Business Name (often called a DBA), or you may want to start a corporation. Whatever you are searching for, your city will undoubtedly have a form for it. Check your city's business license site for information.
- If you use the SBA website, you'll need to locate your state agency and narrow down your location by city or county. You may be presented with a list of links and information relevant to obtaining any of the licenses and registrations you need to conduct virtually any type of business.
- Locate the forms you'll need to fill out. Whether you go directly to your city's website or use the SBA as a resource, you'll be presented with an extensive list of business entity types for your state. Locate the one that is most applicable to your needs.
- To get the forms, you can either download them from the site or go to your City Hall and pick them up in person.
- In addition to the basic forms for obtaining a business license, you may need to fill out other forms and apply for permits specific to your situation. For example, if you're operating your business from home, planning to remodel your building space, planning to use hazardous materials, planning to sell food, etc., you'll need to make sure you get the required permits.
- Follow the links to your form, reading any important information that may be presented along the way—including descriptions, fees, requirements, and so on.
- Fill out the forms. You may do this online or print the forms and fill them out by hand. Some states make provisions for performing these functions directly online, but will generally require you to create an account before being able to do so. You will generally be required to provide the following information about your business, in addition to other information specific to the type of business you are operating:
- Type of business
- Business address
- Name of business owner
- Contact information
- Federal ID number
- Number of employees
Getting Your License
- File your forms. Either using the online forms, or US mail, file your forms with your city's finance department. Your city's website will contain the proper contact information for form submission.
- Pay the filing fee. Each city has its own requirements regarding the filing fee that goes with your business license. It usually ranges from $50 - $400 or more, depending on what type of business you're operating. There may be an additional processing fee of $25 or so as well.
- Wait to receive your license. The time it takes to process your license will vary, depending on the type of business entity you are creating. For example, a DBA might take just a couple days, whereas a corporation could take up to 2 weeks. Each state will vary.
- You may need to pick up your license in person and provide identification to prove you are the business owner.
- You may need to get fingerprinted, unless the city already has your fingerprints on file.
- Follow the ordinances that pertain to your business. Once you start operating, it's important to follow the rules laid out by your city for the type of business you're operating. For example, if you opened a restaurant, be sure to get the required permits, liquor license and health inspections. You'll also need to renew your business license according to your city's laws.
- In some cities you will need to display your business license in your business location.
- You'll need to report any major changes to the facts on your business license application promptly.
- Once you have your business started, you need to collect taxes for the state in which you live. You are supposed to report income generated within the state and to pay sales taxes on it. When you register, they usually send the information on how to report taxes.
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