What types of business licenses do I need?

When opening a business there are so many details that have to taken care of that the small business owner can sometimes become overwhelmed. Yet one of the things that is crucial and should be taken care of immediately is to get a business license. The question is what is a business license and do you always need one. The answer to that question can be specific to your situation but there are certain guidelines that should always be followed. Here is some information on what types of business licenses you may need for your small business.

Q: Do I need a license for my new business? I am a sole proprietorship.

A: Maybe yes, maybe no. It is safe to say that most small businesses probably do not need a license. For example, if you will be consulting (a typical and popular small business) it is doubtful that you need a license. However most states have licensing requirements for certain types of businesses and you should check with your local government offices to see if your specific business needs a license. Examples of businesses requiring licensing include Barbers, Attorneys, Doctors, Dentists, Contractors, Insurance Brokers, Opticians, Veterinarians.

Q: Do I need a business license and if so, where do I get one?
A: Depending on the type of business you are starting, you may be required to obtain local, county, State or Federal licensing. It is important to determine which of these will be required before you start conducting any business since heavy fines are usually associated with conducting a business without proper licenses and permits.

Most small and home-based businesses will only require a local business license or permit.

It is easy to determine what your local licensing requirements are. Simply call or visit your city or county government offices (usually in the courthouse) for information about licensing requirements. Nearly all businesses will require a county or city license to operate. The license is easy to obtain and normally only requires a short visit to the local courthouse. Fees, if any, are small.

If you intend to operate a business from your home, be sure to also check local zoning requirements (again, at the courthouse) as well as any property covenants. Zoning requirements are those laws that regulate how property can be used and in some cases, some activities may not be allowed.

Certain businesses and professions will also require a State license. Examples include attorneys, barbers, contractors, dentists, most businesses serving food, and social workers. Each State has an agency dealing with these types of businesses. Determine if your business requires a State license by contacting your local government offices. They should be able to give you information as to whether your business will require State licensing. In some cases, these licenses can be expensive.

For a very few businesses, Federal licensing is required. Examples would be a business that is engaged in providing investment advice or dealing with firearms. In general, Federal licensing is required if the business is highly regulated by the government. It is best to consult an attorney in these cases.

Each State has different business licensing requirements. A good source of State specific information is your local library. Most libraries now provide a "small business" section that includes informative brochures from the local government agencies. Ask at the reference desk.

What's a DBA?

A: DBA is an acronym for "Doing Business As" (also known as a "Fictitious Name.").

Most states require that sole proprietorships and partnerships that are conducting business under a name other than the owner(s) must file for a DBA certificate in the county where business is conducted. The DBA certificate is generally obtained at the Clerk of Court of the county in which business will be conducted. Fees are typically $10 or less and most courthouses have records that may be searched to determine if your suggested name will be unique.

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Categories: Legalities,

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