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When you’re starting a business, it can be hard to sort out which steps to take to get up and running—and stay compliant with confounding government regulations. Depending on the type of business you run, and where, you may need to apply for one or more business licenses. Here’s everything you need to know to figure out which licenses you need and how to get a business license in your area. Featured Partners Service Time Varies By State & Package Service Time Varies By State & Package Service Time Varies By State & Package What Is a Business License?“Business license” is a broad term that refers to any kind of license or permit required to operate your business and provide your services in your location. Various types of business licenses are issued by federal, state, county and municipal agencies. A business license’s purpose may be to register your business with the government for tax purposes or to ensure you follow industry regulations. Do You Need a Business License?Whether you’re required to get any type of license to run your business depends on where you live (and where your business is based) and what kind of goods and services you sell. Most states don’t actually require a general business license—a.k.a. business operating license—just to do business in that state. However, you may still need a business license from your city or county. You , may also need a license from a relevant state or federal regulatory agency to perform certain business activities, like agriculture or medicine. If you run an online business, you register the business and obtain required licenses in the state and city where you base the business. If you’re a digital nomad, speak with your lawyer and accountant about the best way to set up your business. Types of Business LicensesTo sell your goods or services, you may be required to get one or more of these types of business licenses in your state:
How To Get a Business LicenseThe process to get a business license varies by state—and it’s not required in every state for every type of business. Follow these steps to determine whether you need a license and to apply with your state if you do. 1. Form Your Business EntityYou’ll need a business license in the name of your business. It’s best to establish a business structure and business name before you apply for a business license. That way you don’t have to reapply or amend your business license later. Common legal structures for small businesses include:
If you establish an LLC, corporation or nonprofit corporation, you’ll establish a name for your company when you file formation paperwork with your state. Depending on your state, you may be able to get a DBA from the state, or you may need to file your DBA with your local government. 2. Apply for an Employer Tax Identification NumberDepending on how your state processes business licenses, you may need to include your federal tax ID number on your business license application. Sole proprietors who don’t have employees can use their Social Security Numbers instead of a tax ID number, but all other businesses need a federal employer ID number or FEIN. You can obtain an EIN through the IRS online. The process is simple and you’ll receive your number right away. 3. Determine Which License(s) You NeedWhich types of business licenses you need depends on federal, state and local requirements and what kind of business you run. You can find out which licenses and permits you need through:
4. Apply for a Business LicenseYou may have to file for licenses and permits with state, county and municipal agencies—for example, a sales tax permit from the state, health permits through a department of health, and planning permits through the city. Look for resources from your state or your local SBA office that gather all the information you need in one place, so you don’t have to spend hours researching every relevant agency. Step-by-step guides in your state could walk you through the process and include links to necessary applications on various websites. In most states and many localities, you can get a general business license online through the proper agency’s website. Industry-specific licenses may have a more complicated application process. You likely won’t have to wait long for a business operating license or a sales tax permit to be approved. Other types of licenses and permits may have a longer and more involved review process. 5. Renew Your Business LicenseTalk with your lawyer or pay attention to the fine print on your business license and permits to figure out how often you have to apply or pay to renew them. You may have to renew annually or every five years, for example. Frequently Asked QuestionsHow much does a business license cost?Business license fees vary widely across states and industries. Depending on where your business operates and what kind of licensing you need, you could pay a fee in the area of $50 to $200. Many businesses can operate without an operating license, so you may not have to pay anything. Is an LLC and a business license the same thing?No. An LLC (limited liability company) is a business entity that determines how your business is structured for legal and tax purposes. A business license is a permit that allows your business to operate in your state or locality. A business license may also refer to specialized licenses and permits that allow your business to perform certain services or operate in certain locations.
Can you run a business without registering it?You can run a business as a sole proprietorship (just you) or general partnership (you and one or more partners) instead of forming a business entity like an LLC or corporation. However, sole proprietorships and partnerships may still need to register DBAs and obtain business licenses from government agencies. Learn more about the differences between a sole proprietorship and an LLC. What types of business licenses are possible?The term “business license” can sometimes describe a general operating license, but is often used to refer to several different types of permits. The most common types of business licenses include:
Do you need an EIN to run a business?It is not mandatory to have an employee identification number or EIN to run a business. However, if you want to open a business bank account or hire employees, you will need to get one. Learn more about the legal requirements of starting a small business. What is a LLC license in Arkansas?Arkansas LLCs (limited liability companies) provide their owners with limited liability protection, a range of management options, and certain tax advantages.
Do I need a business license in GA?How do I get a business license in Georgia? Every business needs an operating license, which is obtained from the county or city in which the business resides. Please contact your local business licensing office which is generally housed within city hall.
Do I need a business license in Arkansas?Along with many states, Arkansas does not require every business to obtain a generic business license at the state level. The only statewide permit or license applicable to most businesses is the Arkansas sales tax permit, often called a seller's permit, which registers your business for the Arkansas sales and use tax.
Do you need a business license in NC?North Carolina doesn't have a general business license, thus North Carolina businesses aren't required to purchase one.
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