Obtaining a business license varies by state and in some areas it varies by city or county. In fact, even the types of business licenses that you’re required to get might vary based on your geographic location. The basic process of obtaining a license can be outlined in a simple three step process: research, submit your application with any required fees, and display your business license.
Business licenses can cost between $10 and $500 or more, depending on the type of license you need and where your business is located. A simple business registration license is typically a way for states to know who is operating within the state while more serious licenses, like a liquor license, is a way for states to regulate potentially dangerous substances.
Before you can apply for a business license in most states, you’ll need to legally register your business with the state. This means preparing and filing all of your LLC or corporation documents and making sure the state files the documents. MyCompanyWorks can complete this process for you in just three easy steps. Get started today by filling out a simple online form.
Obtaining a Business License in 3 Steps
There isn’t a one size fits all process for obtaining a business license. The process will always depend on the type of license you’re applying for and where you live. However, we’ve outlined a basic process that can be followed to first understand what your requirements are and second to complete all needed application materials. For the purposes of this process we’re going to assume that you need a basic local business operations license.
Step 1: Research Your State, County, & City Requirements
The first step in the process is to research whether you need a business license or not. Most businesses that need to obtain a business license will have physical locations within the city or county. Typically this is defined as an establishment that local citizens can walk into. Some home-based businesses are also typically required to obtain a license. The types of home-based businesses that generally need to get a license include:
- In-home childcare or preschool
- Any business that has clients or customers physically coming to the home
- Any business that is required to obtain a license by a government entity based on the industry the business exists within
All business owners should consult with both the state government and the local government to determine all business license requirements. The last thing you want is to get your business shut down after you’ve opened your doors because of a failure to obtain the proper licenses.
For a basic business license, most states will either set the rules or allow the local government to set them. In most situations you won’t have to pay fees and register with both legal entities just to open your doors. However, as more license needs occur you could be working with multiple layers of government or multiple agencies at the state government level.
For example, a local bar may be required to obtain a normal business license from the city the bar is located in but will also be required to obtain a liquor license directly from the state. This is pretty standard and you should plan for anywhere between a few days and one month to obtain a business license, depending on the type of license you need. Some states may take even longer to process applications for potentially dangerous licenses, like a liquor license.
Step 2: Complete Application Requirements & Submit All Fees
As soon as you know what the requirements are for your state you need to collect all required information and fill out all application forms. Keep in mind that if your business has multiple physical locations then you may end up having to complete the license paperwork once for each location, especially if they are in different cities or counties.
Once you’ve completed the paperwork you should have a professional look it over to make sure you’ve done it correctly, or at least someone who can provide a second pair of eyes. If you’ve put the right signatures on the documents and have included all requirements then you should now submit the documentation with any required fees.
Some states will require you to fill out the paperwork and bring it into a local office while others will let you mail in the paperwork or even fill out all of the documentation online. Regardless of the method each state allows you to submit the paperwork, you’ll likely get your license in the mail within a certain period of time.
Step 3: Receive Your License & Display it in Your Business
Once the state or local government is satisfied with your paperwork they will process your application and deposit your fee money. The officials will then, finally, print your business license and send it to you. You need to read over any information that is given to you very carefully when you receive your license.
Many states will require you to properly display your business license for all of your customers to see. There could be very specific rules with how or where you need to display the license. For example, you may have to display it within typical eye-level of your customers and within ten feet of the front door, or right behind your main check-out area. Regardless of the rules, it’s important that you follow them to the letter of the law or your license could quickly be revoked.
Types of Business Licenses
While most businesses will need a general operating license, there are many different types of business licenses that you might need to successfully operate your endeavor. The types of different licenses you need will depend on what industry your business is in and on what you sell. The types of business licenses you might need include:
- Local Operating License: This is the type of business license we discuss above, and the most common license businesses apply for.
- Building Permits: You may be required to get a permit, or license, for any remodeling work that might be needed within your business’s location.
- Zoning Permit: The local government will need to approve your use of the land you’re operating on for the specific type of business you’re operating. For example, if you’re in a retail zone and want to open a manufacturing operation then it may take some convincing of local politicians.
- Fire Department Permit: This permit is essentially passing a test by local officials that says your building is structurally sound and you’re given a maximum occupancy that is safe in the event of an emergency.
- Health License: These are typically needed by restaurants or food establishments.
- Sign Permits: You’ll likely need to get approval of the city for any exterior signs in terms of size and possibly color or other specific decor.
- License to Serve Alcohol: You’ll need a license to serve alcohol that will be consumed at your business and a separate license if you’re going to be selling alcohol that isn’t consumed there.
- Seller’s License: You may be required to get a specific license, depending on the types of goods that you’re selling to consumers.
- Occupational License: If you’re a business professional then you’ll be required to register as one and make sure you’re properly licensed before opening your doors.
In addition to all of the permits and licenses above, you may be required to apply for some business licenses that are regulated by the federal government. If you’re in certain industries then you should make sure there are no federal licenses that you must obtain. These industries include:
- Mining or drilling
- Public transportation
- Logistics (including maritime)
- Fish and wildlife
- Nuclear energy
- Firearms or explosives
The key to covering your business properly is to make sure that you’ve exhausted the levels of government to make sure you’re obtaining all the licenses your business needs. You can either hire a professional attorney to help you through the process or you can reach out and communicate with your local government officials to get specific requirements.
Get Started Today
Before you complete your business license research you should make sure your business paperwork has been completed with the state. This means starting your LLC and filing all appropriate documentation. MyCompanyWorks will complete all of your required documentation and submit it to the state where you business exists for you. You can get the process started today by filling out a quick online form.
In addition, we offer a Business License Compliance Package that does all of the tedious research for you and gives you all the forms and instructions in one simple online dashboard to complete and submit to the proper authorities.