For companies and individuals that wish to do business legally, a business license is the legal registration of the said company. It allows the business to operate in the state, and within the industry of choice. Most state, county, and local governments require both licenses and permits. Within the United States alone there are more than 150,000 filing jurisdictions. You might need multiple licenses and permits depending on your industry.
Why is a Business License Required?
Business licenses legally register your company within industry and jurisdiction. Business licenses have been put in place to benefit counties. These licenses allow them to generate revenue and have control over zoning. It also keeps registration and documentation of everything happening within the business.
How to Get a Business License
Getting a business license should begin with a call to your state's secretary of state. You can also contact any colleagues in the same industry. You need to know what licenses you need to get started. If you work in a specific industry then there may be more licenses to obtain to essentially prove you should be allowed to operate in that industry.
Step-By-Step Process to Get a Business License
- Go online, or call your city or county office to find out what license you need
- Register your business with the Department of Revenue.
- Fill out a form with your business information.
- Pay a fee, in the state of Florida this should cost
How Much Do Business Licenses cost?
The cost of your business license and permits can depend on different factors. First off, each state and city has different prices. Other factors that will generate the cost of your business license is the type of business you run, as well as processing fees and compliance fees.
On average you can expect to pay between $50 and a few hundred dollars plus renewal fees. Despite this being the average, in some states, a business license can cost $500 plus fees to file an annual list of officers and directors. This is why it is essential to explore the costs in your states.
Different Types of Business Licenses
Since there are so many industries that require business licenses, it’s important to know exactly which license your business is required to have. Below you will find a list of different types of business licenses companies can qualify for.
- Business operating license: Always obtained in either the state or city, an operating license will give you permission to operate. Most often you will need to apply for this license at both the city and state levels because there are different requirements for each.
- DBA (doing business as) license or permit: If you operate your business under a different name than what you are registered as you will need to get a DBA license.
- Planning and zoning permits: Each municipality has different regulations for where businesses can operate. You also need to verify that you can legally operate in the city that you wish. If you cannot because of zoning, then you will also need to apply for a zoning variance. This is used to show that your business will not “disrupt the community.”
- Building permits: These permits show that where you operate is legally habitable and safe to operate from.
- Fire department permits: The fire department will typically come to verify that you are operating safely and in compliance with fire codes. This may include checking on flammable materials and walkways.
- Tax regulations: Especially if you resell goods, you will need to comply with various tax permits and licenses. Almost every business needs to obtain an Employer Identification Number (EIN), which will allow you to hire employees and also collect payroll taxes. If you resell goods then you will need a seller’s permit, known as a sales tax license or permit.
- Health licenses and permits
- Environmental licenses
- Sign permits
What Happens if You Fail to
Get a Business License?
Every county has different business license requirements and regulations. If you fail to comply with these regulations and obtain a business license, there are different fines in each location. For example, these may include late fees or fines, penalties, or even the inability to operate. This is why it is essential to hold the licenses and permits you need before operation.
Do I Need a Business License if I Have an LLC?
Although you will need to pay to establish an LLC, this is not the same as a business license. You will need to first establish your LLC before getting a business license and then obtain the license. This is because the license will require the legal name of your business and if you have not established it yet it will not be possible.