A crucial step in starting a business is acquiring all the required licenses and permits. Depending on your industry and location, you may need licenses and permits at the federal, state, and local levels.
This is non-negotiable, as you could face major business hurdles and penalties without them. Lucky for you, this guide lays out all you need to know to ensure you’re in full compliance.
Which Department Issues Business Licenses and Permits?
In most states, several agencies and departments issue licenses and permits depending on the type of business. Sales tax permits, for instance, are usually issued by the taxation department.
Again, various departments issue licenses and permits at the county and municipal levels. Check with your local governments for requirements.
Federally, different departments oversee different industries. As a result, licenses and permits are generally industry-specific, except for health permits from the Occupational Safety and Health Administration (OSHA).
If you run a farm, the U.S. Department of Agriculture may require licenses and permits for your business. In addition, you must register with the Bureau of Alcohol, Tobacco, Firearms, and Explosives if your business sells fireworks. Most industries, however, do not require licensing at the federal level.
The Small Business Association (SBA) has put together a handy guide that details which licenses and permits are needed for various types of businesses.
Other Common Business Licenses and Permits
Here are some common licenses and permits you may need:
- Industry-specific licenses for certain professions and industries, such as construction, plumbing, electrical, childcare, food handling, liquor, architecture, and finance
- Building and zoning permits
- Doing business as (DBA) permits using a name other than your LLC.
- Health licenses and permits at federal, state, and local levels
- Fire permits
- Sign permits
How to Apply for a Business License
You’ll apply for various business licenses and permits at various department and agency websites at the federal, state, and local levels. Standard state agencies that issue licenses are the taxation, health, and liquor control departments.
How Much Does a Business License Cost in State?
License and permit fees vary. Generally, fees are nominal. One exception is liquor licenses, which can be pricey.
Do Licenses and Permits Have to Be Renewed?
Some licenses and permits need to be renewed annually. Check with the issuing department for renewal requirements.
Obtaining licenses and permits is a critical step when starting a business, so check with state and local government offices and fully comply with their requirements. If you operate without the proper licenses and permits, you could face steep fines or even the closure of your business.
If you’re unsure of state or local regulations and need help, consult a business attorney, as proper licensing is an absolute must.