Numerous people consider that when you register your business, you are good to go and begin trading the goods or providing services right away. However, the truth is far from it. Your startup cannot run without the necessary permits and licenses.
Business permits, licenses, and registrations are a complex matter, yet a prerequisite for any business. Even before a company can launch itself, the majority of the counties, states, and governments require you to get the mandatory permits and licenses to trade.
Depending on the industry of your business and the location of its operation, some licenses and permits may be required for your business. However, this article will provide a basic checklist to serve as a valuable guide to get you started on your journey.
Business Licenses and Permits
A business license is a registration that is required to start a business and is required by the local or federal government.
Compliance with laws is required at all stages and doesn’t stop with the initial operating permits.
Business owners should research and find other licensing requirements based on the location and type of industry their company falls under.
Failure in compliance with business license regulations can result in the business getting notices, penalties, and a general inability to continue operating that business.
The procedure of Getting the Business Licenses and Permits
There are about 150,000 filing jurisdictions in the US, and thus, various conditions need to be achieved to operate a business in any state. This means depending on the state of your business and your location, you’ll need to check their respective requirements.
Some common permits and licenses required for businesses include:
- Zoning and land use permits
- General business licenses
- Health department permits
- Tax registrations
- State issued occupational licenses
Undoubtedly, numerous business owners find the task of getting the permits and licenses tedious, complicated, overwhelming, and time-consuming. Hence, several services are available online to help your business with attaining the necessary licenses and permits.
Different Business License Compliance Packages are available to ease the task of attaining the required permits and licenses. After you avail the package, you need to fill out the customized package of instructions, personal information, and forms of presiding licensing authorities.
All you need to do is complete the paperwork sent to you and mail it back to the compliance experts after filling it out.
As mentioned earlier, different states will have varying procedures and requirements, so be sure to check the state requirements for your business permits. You may consult the experts to help identify the permits, licenses, and tax registrations required for each business location.
Types of Business Permits, Licenses, or Registration for Your Business
- General Business License
Businesses generally require a business license to allow the operation of a business in a specific city or county, where they are located.
- Municipal Licenses
Licenses primarily apply to municipalities. Municipal governments provide business licenses to generate revenue and to make sure that the licensees comply with the zoning requirements.
Nonetheless, in a majority of the cases, like in the case of home-based businesses, municipal licensing is not enforced. However, if your business opens up and the functions and operations of the office are likely to disrupt the neighbor, it will be performed in the designated zone, and thus, will require a municipal business license.
- “Doing Business As” Permits or Licenses
If you are planning to run your business under a fictional business name, you’d be required by your state to register it as your business name.
- Federal Business Registration
Businesses that make less than $ 30,000 annually typically do not require to register for HST/GST and possibly don’t need to register with the federal government. Nonetheless, for businesses with a specific size, employees, and activities, you would be required to register with the federal revenue agencies.
- State and Federal Tax Identification Number
The majority of the businesses will be required to apply for EIN, or the employer identification number also referred to as a taxation identification number. Your local or state government may also need to obtain your state tax identification number.
- Sales Tax Permits
If your businesses trade goods, whether physically or online, and your state requires you to collect sales tax, you may be required to get a business, typically known as a seller’s permit.
- Zoning Permits
Local zoning regulations regulate where the specific type of businesses can and cannot operate. These regulations apply to restaurants and manufacturing businesses. You must acquire the provincial and federal permits for most businesses if they are impacting the physical environment or if it involves working with hazardous materials. All the workers of new businesses should be familiar with their area of business sufficiently to know the permits required.
Some municipalities require building and zoning permits for specific types of businesses. Sure enough, this is applicable for all types of construction and building. Moreover, you may also require permits for signs and access.
- Home Occupation Permit
If you are planning to operate your business from within the premises of your home, check with your city or country if they require a home occupation permit for your business.
- Health Permits
Some businesses that involve the preparation and managing of food may require health permits. So if your business is related to food, ensure to get the health permit.
- Professional or Occupational Licenses
Specific businesses types in specific industries may need to get special occupational licenses. Moreover, the types of businesses or industries will vary from state to state. For instance, some states may require childcare businesses to achieve a special license. Professions like accountants and lawyers are also usually regulated and may require special professional licenses.
- Environmental Permits
Most states and local governments require specific businesses to achieve special pollution control permits. For instance, if in the course of your business you’ll be engaged in an activity causing the discharge of environmental pollution into the environment, you may have to achieve a special permit.
- Sign Permit
Some local agencies have standards that require the businesses to achieve a permit before placing a sign. The regulations may also stipulate some requirements like the size of the sign and positioning of a sign.
- Construction or Building Permit
If you make any changes, specifically structural changes, to the place in which the business will operate, you might be required to need a building or construction permit from your local authorities.
- Special State Licenses
Numerous states require some businesses, like establishments that serve alcohol, to get special licenses. In the majority of cases, these licenses serve to represent that the business has met the specific state-regulated standards.
- Additional Federal Licenses and Permits
A federal license is expected if your business is involved in activities regulated by a federal agency. Examples of this include the sale or manufacturing of alcohol or firearms, wildlife-related or commercial fishing activities like the export or import of wildlife.
- Registering Your Name
Several sole proprietorships and partnership businesses voluntarily register with the provincial government to offer some limited protection to the business name and to give the business more credibility.
Registration involves no legal requirements or tax implications. It is performed through a government agent or online in the operator’s local community. Typically, before a business can be registered, the agent will give a name search to ensure there is no conflict with the current business.
When companies incorporate, they are given a government charter to operate, so these operations are automatically carried out.
- Provincial Registration
In various provinces, businesses must also register for provincial tax regimens. Alberta and the territories don’t have any sales tax, provinces have synced their sales tax with the federal government’s while other states have independent provincial sales tax.
- Renewal of Business Licenses
In the majority of the cases, business licenses must be renewed on an annual basis. It is a typical practice for local governments to mail the notifications directly for the renewal of tax permits, registrations, and licenses to the licensee.
After your company receives a notification for renewal, you’ll need to consult with the licensing agency on instructions and information for renewal.
The above-mentioned checklist provides a general idea of the necessary permits, licenses, and registration. You are required to do thorough research on the mandatory permits and licenses applicable to your business. Therefore, depending on the location and state of your business, you’ll need to check their respective requirements. Your business would require mandatory federal and state licenses, sales and federal tax permits, and name registrations. Moreover, if you are into a food or manufacturing business that may impact the environment in some way, you should consider having environmental and health permits. Similarly, if you are doing business in multiple places simultaneously, you may consult the experts to help identify the permits, licenses, and tax registrations required for each business location.