When you form a business in any state, you will need a business license of some form that grants legal permissions to function with federal, state, and local laws. At some point in the company formation process you need to find out what licenses your business will need, and that can change depending on what products you offer, and where you offer them. The New York government has tools available to help.
What is a Business License?
A business license is a legal document that grants a business permission by the federal, state, or local government, to operate and do business. This applies to Limited Liability Companies (LLCs) as well as corporations. An LLC and a business license are two separate things. It’s like having a driver’s license. You are an entity seeking to drive, and your license is the permission to do so legally. You will have to investigate ahead of time what permissions you will need in order to operate in any part of the United States. New York has requirements that must be met in each county before you’re allowed to do business in that area. If you’re providing temporary services then you may need to get permission ahead of time.
Why are Business Licenses Required?
There are no universal licenses that cover everything, because different services have different expectations when it comes to operating safely. If you went to see a doctor, you’d want them to meet a certain professional standard before trusting them with your health. Business licenses exist to help ensure the people doing business in their field meet these safety thresholds.
If you’re operating in New York, then your business will most likely need a seller’s permit for sales tax known as a Certificate of Authority. This permit is free to register for. On top of that you may need additional licenses that vary in cost. You can check and see what licenses your business you might require by using an online searching program. You can also contact your local and state government offices and inquire within.
How to Get a Business License?
To register for a Certificate of Authority in New York, all you need to do is register online for an NY.GOV ID with the state tax department. There might be a few steps to follow to prepare for this.
Form a Business in New York
First you need to have a business in New York. You can form an LLC or a corporation, or you can simply use our service to create an LLC, providing you with the framework you need. We can help figure out all the details and essential permits your business will need.
Apply For Statewide Licenses
The first statewide license to consider is whether or not your company will be selling tangible personal property or services that are subject to sales tax. If that is the case, then you will need to register for a Certificate of Authority. If you have a business that already operates with this license, you will have to file to amend it if your company changes:
- Business Name
- Registered Address
- Employer Identification Number
- Phone Number
- One or more Members
- Purpose of the Business
Basically, if you have to update your Operating Agreement, then you’ll have to amend your Certificate of Authority as well.
Determine Required Local and/or State Licenses
The best tool to use to determine which licenses you might need is the step-by-step online wizard provided by the official New York state website. It has a search program that can guide you through your business needs. You can also call your state and county governments to ask a government worker what you might need.
Apply for Your New York Licenses
Once you know what you need, you have to apply for your license(s). If you apply online, the process normally takes between 5-10 minutes. Here’s what else you might need:
- Complete an approved study course
- Take a written and/or practical exam
- Health certification by a nurse practitioner or physician
- For some you must be a resident in New York
- Must be 17 years old or older
- Driver’s License or valid ID
- School Certificate
- School Transcript
- A valid Email address
Apply for Federal Licenses and Tax Treatment
There are no generalized nationwide business licenses. Depending on what business you form, you might need a license if you’re operating in a specific industry. You can structure your business as a corporation, or an LLC that elects to be taxed as a corporation, and you can receive the same tax benefits as an S Corp or a C corp with your LLC.
How Much Do Business Licenses Cost?
If you’re forming a business in New York then chances are you will need at least one business license. While it’s free to register for a Certificate of Authority, other licenses can run anywhere from $50 - $150. You’ll also need to pay for a Certificate of Publication, and the pricing there will vary depending on the location of your business.
Different Types of Business Licenses
A business’s required licenses will vary from city to city, so knowing what you’ll need ahead of time will take some research. There are so many kinds of potential licenses it’s difficult to name them all. Here are some potentials:
- Alarm Permit
- Building Permit
- Business License and/or Tax Permit
- Security Guard
- Health Permit
- Occupational Permit
- Real Estate Brokers
- Home Inspection
- Signage Permit
- Notary Public
- Zoning Permit
What Happens if you Fail to Get a License?
Failing to acquire the correct permissions ahead of time can impose severe fines on your business. You might have to pay back taxes for not having a Certificate of Authority ahead of time. There might be other penalties and fees associated with any other certificate you fail to obtain, so ensure you have the right ones.
Do I Need a Business License if I Have an LLC?
Depending on the scope of your practice and the nature of your business, you may have to acquire multiple business licenses. Forming and operating an LLC is relatively simple to do, but since it’s so tricky to pinpoint exactly what you need, it’s highly recommended to talk with a professional. Having a business lawyer available to discuss the possibilities and requirements of your company can be just what you need!