What kinds of business licenses does a small business need to operate the company?
Here are some of the most common types of licenses for startups across various industries.
- Employer Identification Number (EIN)
- Doing Business As Name (DBA)
- General Business Operation License
- Seller’s Permit
- Sales Tax License
- Home Occupation Permit
- Zoning and Property Use Permits
- Occupational License
- Health Licenses and Permits
Filing for business licenses is a straightforward process. Here’s what small businesses need to know about each type of license.
Employer Identification Number
Which business needs an EIN? Any company which plans to hire employees. This also includes businesses planning to open a business bank account or establish a business credit profile.
What’s an employer identification number (EIN)? An employer identification number (EIN) is also a federal tax ID. The IRS issues this nine-digit number to a small business. It identifies the business as a distinct tax entity and ensures the company collects payroll taxes. An EIN helps keep small businesses in compliance. It is a requirement for businesses planning to hire employees or open a business bank account.
Doing Business As (DBA)
Which business needs a DBA? Any business planning to operate under a name which is not the same as their own.
What’s a doing business as name (DBA)? A doing business as name (DBA) is not a mandatory business license. However, it is helpful for any business owner who plans to operate their business under a name which is different from their own. Once you register a DBA, the company may conduct business transactions.
General Business Operation License
Which business needs this business license? Every business needs this license. It’s universal to nearly every type of business, from storefronts to eCommerce shops.
What’s a general business license? A general business license allows businesses to conduct business in their specific location. This license allows the state to track the activities of the company. It is a requirement for companies with a physical location and necessary for eCommerce businesses.
Seller’s Permit
Which business needs it? Small businesses which sell goods or services online.
What’s a seller’s permit? Small businesses planning to legally sell products online must first obtain a seller’s permit. This permit is a requirement in almost every state. Additional business licenses may be necessary depending on the items sold by the small business, including any businesses which sell liquor or lottery tickets.
Sales Tax License
Which business needs it? Home-based businesses which operate in regions charging sales tax or selling taxable products and services.
What’s a sales tax license? A sales tax license is necessary for small businesses in areas which charge sales tax or sell taxable products and/or services. Sales tax differs from state to state. It’s important for small businesses check in with the Secretary of State to ensure they have all necessary sales tax licenses from one (or more) states to avoid tax penalties.
Home Occupation Permit
Which business needs it? Small business owners who plan to operate their business from home.
What’s a home occupation permit? Filing for a home occupation permit ensures your neighborhood is zoned for home business activity. It allows you to legally operate the business from home.
Zoning and Property Use Permits
Which business needs it? Small businesses operating out of their homes.
What’s a zoning and property use permit? Small businesses planning to operate outside of the home need to make sure the area they are working from is zoned for their specific business. This includes both the business’ location and its parking area. A zoning and property use permit checks to ensure this area meet the local zoning codes.
Health Licenses and Permits
Which business needs it? Any business relating to customer health. Some of these include restaurants, gyms, and nail salons.
What’s a health license? A health license is a requirement when opening a business which relates to the health and wellbeing of the customer. This ensures their safety on the premises and that the business is fulfilling all necessary rules to keep them safe and healthy.
Occupational License
Which business needs this business license? Businesses, and business owners, in fields which require specific licenses to practice their occupation. A few of these may include real estate agents, doctors, lawyers, accountants, and architects.
What’s an occupational license? An occupational license is obtained by a business owner in a specific occupation or line of work. Need help determining whether an occupational license is required for your business? Try using tools like the National Occupational Licensing Database to determine if an occupational license is necessary for your role.
Additional Licenses (And Where to Find Them)
Additional business licenses vary depending on the company’s city, state, and industry requirements. Check in with the local Secretary of State to determine the full list your business may need.
File for business licenses today. Reach out to MyCorporation at mycorporation.com or give us a call at 877-692-6772.