The essential guide to the type of licenses or permits your business needs.
From building a small business out of your bedroom to staffing a three-story office building, there are a lot of variations within what it means to build a successful startup. Be it handmade resin trays you sell online, or a warehouse you manage for drop-shipping – there are different ways you can start your own business.
Depending on the type of business you run, which country you run it from, and the government regulations your business has to follow, there’s a lot to learn when you step foot into the entrepreneurial world. But to get all of this up and running, it is essential to know the type of license or permit your business needs.
While not all businesses need a license to run their daily activities, there are a few regulated fields, and some rules set statewide or country-wide regulations that need to be followed. For example, if you’re starting a brewery, you’re going to need an alcohol permit, a zonal permit and a few other licenses to fully legitimize your business. On the other hand, if you’re selling hand-crafted earrings, there’s a chance you might not need to get a license or permit unless you’re running it out of a residential space.
It might be confusing to navigate all the types of licenses available, and finding the right one isn’t always all that easy. But we’re here to tell you exactly what you need to look out for. Before you learn the many types of business licenses and permits, what you first need to know is as simple as “What is a Business License?”
Compliance with government licensing regulations is usually the first step in running a successful business, and most small businesses need a combination of licenses and permits from both federal and state agencies.
A business license is a document that authorizes you to conduct business in a certain area. Buyers can trust that you're regulated and qualified in your field because you're registered with the government. Acquiring a permit—a sort of licensing that normally necessitates in-person inspections—may also demonstrate that you can be trusted to do business properly.
Lots of enterprises require at least one business license or permit from their local, county, or state government to conduct any kind of business. The sort of business license you'll need depends on where you're doing business, what items or services you're selling, and how your company is structured i.e. the number of people employed. If you operate in various cities, you'll almost certainly need to apply for multiple licenses.
While it’s not always compulsory to have a license, it’s best to have your business registered and regulated because not only is it convenient later on when you decide to scale your business, but it also adds to your credibility. Depending on the type, it can also help you avail of many government schemes and offers to boost your business.
You need federal government licenses or permits if your business engages in one of 11 regulated activities. Permits or licenses are required for the sale of specified goods or services. Most countries need firms to get supplementary licenses and permissions before selling certain items, like federally regulated businesses from the list below.
If your business deals in any one of these sectors of business, it’s compulsory for your business to be registered and licensed by the federal government.
When a company starts conducting business in a new jurisdiction, it must apply for a business operating license to be given the approval to do so. The licenses are issued by the nation or city in which you are seeking permission to conduct business.
A DBA license, or a Doing Business As License, is given when your business name is your own name, by default. If you operate a sole proprietorship or partnership, this is common. A DBA license allows you to legally operate your business under a different brand name than the one you've registered.
Other forms of company organizations, such as LLCs or S companies, can also use a DBA license to rebrand without having to go through the time-consuming process of altering their formal business name.
Some businesses operate under a trading name, fictional name, or assumed name rather than their actual identity. In this instance, the businesses will need to apply for a DBA license to use that name.
Every state with a sales tax requires businesses to get a seller's permit. This license allows you to offer your products and services in person or online, as well as collect sales tax on any taxable items. In certain regions, seller's permits are referred to as sales tax permits or licenses, and they may be required at the municipal or county level.
A planning and zoning permit allows your company to operate in a certain geographic jurisdiction. Typically, each place is designated for a specific sort of business. For example, a site that is designed and utilized for residential purposes is not suitable for the construction of a factory.
If a similar business is already functioning in the area, you will very certainly be granted permission to start your own. You only need to ensure that your business complies with local government regulations.
With the growing trend of report work or work-from-home, it’s easy to forget that some residential spaces aren’t allowed to be the place a business is run out of.
Depending on the type and scale of your business, there’s a chance you'll require a home occupation permit if you've decided to make your home your place of business. If your area isn't already designated for home-based employment, you'll need to apply for this permission through your local regulatory body.
As per the local jurisdiction, your company may need to get a license to establish a business in certain industries. The rules differ depending on the nation you're in.
To legally identify the functioning sectors, most countries require enterprises to comply with licensing criteria. The following are some of the major business areas that need a business license application — architecture, medical care, construction, electrical businesses, child care, cleaning services, beauty salons, spas, pharmaceuticals and so on.
A professional or occupational business license or permit is required for many high skilled jobs, usually the sort of professions that need additional training, trade school qualifications, etc. It's a means of demonstrating that you're qualified to work in the profession.
Occupations like accountants, dentists, real estate brokers, cosmetologists, private investigators and so on, all require adequate licensing. The department agencies of each business will check to see if you are qualified to run the business you intend to run. If you do not pass the license permission, you will be unable to conduct business.
Most commonly found in service-based businesses, it's extremely beneficial to your firm's reputation if your business has a health permit. Inspections are necessary for companies, including restaurants, beauty salons, and tattoo parlors, in order to get health licenses. These permits ensure that you, your visitors, your space and your crew are safe while conducting business.
In certain regions, stringent rules and regulations are in place to reduce the effect of industrialization on the environment, and in turn, to reduce pollution of air, water and so on.
Not only do they ensure that businesses are cognizant of their environmental impact, but these permits also help small businesses that focus on clean or environment-friendly branding to further solidify their position. They are also important to businesses that depend on natural resources in their everyday manufacturing process.
Similar to the health permit, a safety permit ensures that everyone is kept safe – from employers and employees to customers and clients.
In fact, in certain areas, the local governments will require safety licenses for a business to operate. The licenses are mainly compulsory for food supply companies, companies that sell flammable products, and industries that are most at risk of workplace accidents.
Now that you know about the types of business licenses and permits, you need to learn how to register for them.
The registration requirements for your company will typically differ depending on where it is situated. Your best bet is to contact your city's business licensing department to learn more about acquiring a business license. Keep in mind that the business license often comes with a small fee. Once you submit your license application, the city planning or zoning department will verify that your property is designated for the use you intend and that the space you occupy fulfills yours and the company’s requirements.
The following are the primary papers needed to apply for a business license:
It's essential to sort out what kind of business licenses you'll need once you've decided where you'll be doing business and what business you'll be doing. You may find out more by looking at the official website of that location. Alternatively, you can call or visit the local administration to obtain comprehensive instructions.
Multiple business licenses granted by different departments or/parties are sometimes required in a single jurisdiction. Keep track of the criteria needed to verify that your company is operating legally. The types of business licenses and permits mandated by the government will vary depending on the jurisdiction in which your company operates. After determining which licenses are required, carefully gather all necessary paperwork for the application procedure. Most company licenses must be renewed every 1–5 years, depending on the restrictions established by the issuing agency. Renewal fees are sometimes half or less than the initial license amount.
Obtaining a business license or permit is a significant achievement. It gives your company credibility and builds trust, which you can eventually turn into consumer loyalty. Your licenses should be framed and displayed on the walls of your company location, or they should be highlighted on your website.
While the task of getting a business license can seem tricky, now that you know almost everything you need, all you have to do is get down to business. Collect your documents, find the required permits and file them right – and soon enough, you’ll be the proud owner of a registered and licensed business!
And there you have it - everything you need to know about the types of business licenses and permits, and what to do about it. It’s an integral part of your small business journey, and it just goes to show how serious you really are about it all.
But remember, you don’t always have to do it alone. Partnering with companies like Hoist takes the trouble out of setting up your business, including the initial licensing and registration. In fact, if you’re looking to start a local painting business, with Hoist all you need is 30 days to launch it. Our team of experts will help you start your business quickly, run it efficiently, and grow your business profitably. Hoist offers expert training and has a great customer relationship management system to keep you organized and running smoothly.
If you’re ready to start your own thing, get in touch with Hoist and we’ll help you run a whole new painting business, hassle-free!
The essential guide to the type of licenses or permits your business needs.
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