Tips on Obtaining a Business License

Why do we even need business licenses? I have a product or service to sell, my customers have money. Can’t we just trade and leave it at that? The new business owner might find themselves wondering about that, as they maneuver the maze of requirements and regulations attached to running a shop with the local law’s blessings.

However, there are practical reasons for this, although it may at first seem like a lot of red tape. Any business that handles food has to comply with strict health code requirements. An industry that deals with a lot of labor and equipment, such as a construction contractor or a towing company, has to be regulated for safety reasons because they’re prone to a lot of worker injuries. Then there is the safety of the public to keep in mind, too. retail businesses have to keep to a certain level of building safety codes, for instance.

Depending on your situation, you may be required to obtain a business license or permit from any one of or all of the Federal, state, county, and city governments. You’ll probably start with a local business license, which is issued by the county or municipal government. This is a general license that gives you the right to operate a business within the jurisdiction of that county or city. The fees are usually so inexpensive as to be negligible.

You’ll need whatever paperwork is applicable, possibly deed of ownership of the business, legal ID, lease or deed to the building, a tax form or two, and maybe a permit; depending on the situation, you may first have to get a permit before a license. Usually you will have to renew it annually.

One thing to be aware of regarding business permits and business licenses is that they are two different transactions. Usually, a business license just allows you to legally operate a business within a jurisdiction, while a business permit regulates safety and structure for your specific type of business. For instance, to run a bar you only need a business license to start with, but you will need an alcohol seller’s permit to handle spirits, certifying that you are assuming responsibility for not serving alcohol to children and working to prevent drunk driving accidents.

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