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What Licenses and Permits You May Need for Your Small Business or Startup

licenses and permits

You may have discovered your passion, developed the ideal company idea and developed a business plan and budget to launch your own venture. However, before you begin, you must secure all of the necessary legal licenses and permits for your firm to function legally.

Even if you have an established firm, rules change and new licenses must be obtained from time to time. Depending on the industry, you may need to take further steps to obtain relevant federal, state, and local permits.

It is critical to educate yourself on the various sorts of company licenses and permissions that your small business or startup may require. That’s all I’ll talk about today. Let’s get started!

Difference Between a Business License and Permit

business licenses and permits

You’re not alone if you’re confused about the distinction between a business license and a business permit.

The distinctions between the two are subtle but significant.

Business licenses are broad in scope and typically offer permission to practice a job that might be dangerous if not properly educated.

Furthermore, licenses can be obtained to sell liquor or blowfish.

Being licensed suggests that the holder is qualified, trustworthy, and maybe tested to do the service they are selling as part of their business. A cosmetologist, for example, must be licensed in each state.

Business permits are typically provided to address safety or health concerns. Health permits are only issued after an inspection, and conceal-and-carry weapons permits are an example of something that requires a course.

Business Startup Licenses and Permits

  • DBA (Fictitious Name License): A DBA is another name for a fictitious name license (Doing Business As). This is a permit that allows you to conduct business in either a city or a county and is required if the name of your business differs from your given name.
  • Local business licenses: Some counties and localities require new firms to obtain a license, even if they are already registered with the state as a partnership, company, or LLC. This is critical in order to avoid illegalities.

Federal Business Licenses and Permits

If you work with any things that are regulated by federal agencies, you will require special permits, licenses, or certificates. The following organizations may be able to provide you with information about where, when, why, and how to register:

  • U.S. Department of Agriculture (USDA)
  • Alcohol and Tobacco Tax and Trade Bureau (TTB)
  • Federal Aviation Administration
  • Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF)
  • U.S. Fish and Wildlife Service
  • National Oceanic and Atmospheric Administration
  • The Federal Communications Commission

State Business Licenses and Permits

  • Professional licenses: Cosmetologists, massage therapists, and nail technicians are examples of service workers. In addition, 11 professions, including medical, nursing, law, dentistry, teaching, accounting, veterinary medicine, pharmacy, psychology, and engineering, require state licenses to practice. To obtain a license in your state, or a new state if you are moving, look for your state’s board of professional practice.
  • This is required if you intend to hire any employees. You will be issued a federal EIN, which will serve as your employer identification number. You must also register for state taxes and comply with various unemployment tax and worker’s compensation regulations. Please register here.
  • Sales tax permit: If you offer taxable goods or services, you must do so legally. You must apply for a seller’s permit in the state where you live, and you may even need one if you sell online. 
  • Environmental permits: Many state and local governments require special pollution control permits for particular enterprises. If your company conducts activities that may cause contamination or pollution in the air, you must work around rules, notify this, and do it lawfully with a specific permit.

What types of licenses and permits are required for your business?

Although this list is a good place to start and improve your awareness of the several sorts of company licenses and permissions that your small business or startup may require, it is not the most complete resource on the internet.

When it comes to company licenses and permits, every city and state in the country will have distinct criteria. While developing your business strategy, make sure to conduct thorough research on where your company will operate (or where you intend to operate).

The U.S. Small Business Administration is an excellent location to start studying, and it has a wealth of detailed information and facts. Check your state and local licensing and permit requirements as well, so you are up to speed on everything you need to launch your small business or start-up project.