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The Basics of Business Licenses and Permits

Once you have successfully formed your new company, there may be additional steps you must take to obtain specific licenses and permits before being able to legally conduct business. This article is designed to give general information about some of these common regulations.

Government Related Licenses

Many businesses will need to obtain at least one license (often several) before they can legally begin their normal daily operations. These licenses can come from either the state, federal, or local government, but they are important regardless of what agency requires them.

Federal licenses are usually only imposed by the SEC on large, publicly traded companies or by certain federal bureaus on smaller organizations that deal in highly regulated products (alcohol, tobacco, and firearms).

Many states also require specific licenses that only apply to certain types of organizations. Many service businesses, and those who work in them, need state-level licenses to legally operate. The purpose of many of these licenses ensures that these professionals and organizations meet all required certification and training requirements. These types of licenses are required for organizations such as medical practices, food service establishments, and cosmetology related businesses. Retail outlets in most states must also obtain a state sales tax license to operate.

At the local level, the required licenses can vary greatly. They can be required at both the county and municipality level. These types of licenses typically include local tax licenses as well as a standard general business license.

Permits

Permits are different from licenses in that they signify your organization's compliance with a specific local ordinance. Their purpose is to ensure that your business is operating safely and in accordance with community appearance bylaws. Common forms of permits are local health department permits, signage permits, and fire department safety permits.

Zoning Laws

Some businesses are also subject to zoning restrictions that are designed to restrict specific types of organizations from operating in certain areas. Zoning problems are typically only an issue for businesses such as liquor and tobacco shops, firearm dealers, nightclubs, and home-based companies. The reason for these permits is to restrict certain activities from occurring in areas where they could likely interfere with the public good.

How to Determine Your License and Permit Needs

Enbanc can help you determine what permits and licenses your business must obtain. Our Business Licenses and Permits Research Package contains the actual license, permit, and tax registration applications and associated documents that you will need to get started. Alternatively, you check directly with each government agency that will monitor your business.

Have a question? Call us at 888-450-banc