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What are the business licenses and permits that a business may need?
Several licenses apply generally to all startup businesses. Below is an explanation of several of the more common licenses and permits that accompany starting a business. The licenses are listed in a general order of priority. Different states, localities, and professional licensing agencies may requires additional licenses or permits before carrying on business operations. Use this list as a baseline for researching what types of licenses are required in your area to conduct your business activity.
Professional & Occupational Licenses
Professional or occupational licenses apply to specific industries. For example, if you are going to operate an accounting firm, you have to be a certified public accountant. This same principle applies in a number of professions, such as: Law, Medicine, Engineering & Architecture, Real Estate, Accounting & Tax Services, Insurance, etc. Likewise, the state or federal government may regulate certain types of products you sell or services you provide, such as Alcohol, Tobacco, Firearms, Pharmaceuticals, Investment Services (Securities), Food, Media, Transportation, etc. The type of license required will vary by state, so do your research into your individual state requirements. Generally, the State Secretary of State’s website will provide a list of occupational licenses required by the State prior to carrying on a given business activity. It may give a list of required federal permits as well.
Example: The state and federal government may require permits for sales of food items.
The next step in setting up a business is obtaining permission to form a business from the locality where you intend to operate. Licenses are granted from either the city or the county, depending on your location. Generally, you will need to apply for a business license in every locality in which you operate. (See our article, Business Licenses – Good Info for more information).
Zoning and Property Use Permits
In order to obtain a business license for a given location, you will need to make certain that the land is either zoned for the business activity or you must receive a land use permit to carry on that type of activity. You can obtain a land use permit from the local government, generally at the zoning department. (See our article, Zoning Regulations Overview for more information.)
Building Permits & Certificate of Occupancy
Now that you have your occupational licenses, your business license for an appropriately zoned area, now you need to build your business. If you are building a new building you will need to have architectural plans for the construction approved. You will have to file these documents with the local agency responsible for building permits. You will also have to make these filings if you are planning on building out your operations, expanding or carrying on construction to the building where you plan to carryon operations.
Whenever you are constructing or moving into a new building, you will need to apply to the local zoning commission for a certificate of occupancy prior to starting business. Generally, the building inspector will come out and inspect the building to make certain it meets zoning requirements, building codes, fire hazard standards, and other local regulations.
Fictitious Business Name Filing
Many people carry on business as sole proprietors or as partners. This means that they likely are not registered with the secretary of state’s office. If your decide to carry on business under a business name that is different from the name of the sole proprietor or partners, you will need to register that business name with the local government. Generally, this is done by making a “Fictitious Business Name” filing or “Doing Business As” filing with the local government or at the local courthouse. The reason for this rule is to prevent individuals from concealing their true identity from the public by carrying on business under a business name.
Conclusion: The licenses and permits are absolute necessities for starting up a new business. Failure to comply with federal, state, or local regulations in this regard can lead to criminal or civil liability.