When launching a new business, having a lengthy to-do list can be scary. You have to take care of a lot of things before you can start working. And even while many of these procedures might be tiresome, they can significantly affect your company—and your ability to stay in business.
You may need a business licence to legally operate in some places. However, it isn’t always the case. In this article, we’ll look at how to determine whether you need a business licence and how to apply for one in order to ensure that your next endeavour is 100 percent legal.
This text is simply intended as information. You should be sure to conduct your own study and consult a skilled legal expert, as necessary, because requirements are often revised. Businesses operating outside of the US will face various procedures and demands.
Get your business licence
- Where to get a business licence
- What you need to get a business licence
- How to get a business licence
- How much is a business licence?
- Make your business legit
- Business licence FAQ
Where to get a business license
There are several jurisdictions to take into account while registering your business and acquiring the essential licences and permits: federal, state, and even municipal.
A federal business licence is only required for some industries. These permits are granted by various federal organisations:
- Radio and television broadcasting: Federal Communications Commission
- Transportation and logistics: US Department of Transportation
- Alcohol: Alcohol and Tobacco Tax and Trade Bureau and Local Alcohol Beverage Control Board
- Agriculture: US Department of Agriculture
- Aviation: Federal Aviation Administration
- Firearms, ammunition, and explosives: Bureau of Alcohol, Tobacco, Firearms, and Explosives
- Fish and wildlife: US Fish and Wildlife Service
- Commercial fisheries: National Oceanic and Atmospheric Administration Fisheries Service
- Maritime transportation: Federal Maritime Commission
- Mining and drilling: Bureau of Safety and Environmental Enforcement
- Nuclear energy: US Nuclear Regulatory Commission
Each jurisdiction has a unique methodology at the state and local levels. In general, you’ll need to gather your personal and business information, complete the necessary paperwork, and pay the necessary costs. It’s preferable to contact your local agencies directly.
What you need to get a business license
Only companies engaged in specified areas are required by the federal government to have a business licence. However, a federal tax ID, or Employer Identification Number (EIN), can be obtained for free online at IRS.gov for all business kinds and industries.
To get your state business licence, you need the following:
- Owner name and contact information
- Business name and contact information
- Any required permits
- Any required forms or paperwork
- Associated fees (outlined below)
The procedures and specifications for obtaining a business licence vary substantially between states. To find out what you need to receive your business licence, it’s best to contact your local authorities directly.
How to get a business license
To obtain a business licence, you’ll need to register with several local, state, and federal regulatory agencies.
1. File for an EIN
To simplify the procedure, you should first apply for your EIN. Additionally, this clearly separates your company from you as the owner.To simplify the procedure, you should first apply for your EIN. Additionally, this clearly separates your company from you as the owner.
2. Acquire a federal business license
Certain industries demand that businesses obtain a federal business licence in addition to any local jurisdictional licences needed. Companies in qualifying industries must get in touch with the relevant government agency.
3. Inquire into local licenses
Once your federal licensing is in order, contact your state and municipality to learn the procedures for obtaining your state licensure. The procedure generally entails gathering your personal and business data, paying any costs, completing any paperwork, obtaining permits, and submitting it all to the required parties. However, each region has its unique procedure and needs.
How much is a business license?
If you don’t require a federal business licence, there are no fees. If you do, fees differ by industry and are paid to the federal agency giving the licence. State licensing and permit costs might be as little as nothing and as high as $5,000. State and company activity-specific costs differ.
Alabama requires three separate business licences, each of which are non-refundable (except in the case of duplicates):
- Business Privilege Licence
- Store Licence
- Municipal Business Licence(s) from your local jurisdiction(s): maximum $12
In Mobile County, businesses pay $130 for their first year and 50% of that amount each subsequent year, whereas a business licence in Madison County can cost anything between $37 and $77.
The penalty for late renewals is 15% with interest. Additionally, business licence transfers cost $1.
In Alaska, a business licence costs $50 per year for both new and renewed permits. Except for licences obtained after October 1, all licences expire annually on December 31. A licence issued after October 1 is good for the rest of the current calendar year and the one after that.
Sellers in Arizona must enrol in the state’s Licence Compliance Program in order to obtain a Transaction Privilege Tax (TPT) and business licence. TPT licence costs range from $1 to $50 per year, depending on the location’s jurisdiction.
Depending on the type of business, Arkansas fees can range from $50 to $1,000 annually. Even while not every firm needs a state licence, there can be extra municipal requirements; for more details, contact Alaska’s Small Business Development Centre.
Although not all businesses in California are required to hold a state-level licence, some counties and localities must. Some professions are subject to state regulation and demand a licence from the relevant board or division. To learn more about specific licence requirements and costs, visit the CalGold permit support site.
Only some businesses in Colorado are required to have licences, and the cost of a licence for a business subject to state regulation varies by industry. Check with your local municipality as there can be additional licence requirements depending on where the business is located.
For instance, a business licence in Aurora costs $26 in addition to a $17 application fee and is good for two years. Any home-based or entrepreneurial firm operating in Fort Collins must register as a home business, which costs $25 and is good for two years.
Fees in Connecticut are determined by the kind of business. For instance, charitable solicitations are exempt from paying an initial licensing cost. The fees for other kinds of enterprises range from $10 to $5,000.
A business license in Delaware costs $75 for the first year. Business owners who are 65 years of age or older and meet other eligibility requirements are eligible for a 75% discount.
Depending on the sort of firm, Florida entrepreneurs should expect to pay anything from $87.50 to slightly over $1,000 for beginning costs. Florida does require a seller’s permit or a sales-and-use tax permit, albeit it does not have the same procedures and standards for company licensing as many other states.
Georgia levies a $100 “investigation fee” that is not refundable. Certain company kinds are subject to additional licence fees. For instance, wineries, distilleries, and breweries must pay an extra $1,000. A further fee of $50 to $1,000 may also be charged to distributors and retailers.
Hawaii requires merchants to get a General Excise Tax (GET) licence to operate their businesses. This licence has a one-time $20 fee.
There isn’t a state-wide business licence in Idaho. Some jurisdictions, although not all, demand a local business licence. Online resources for information are scarce.
There is no general state business licence issued by Illinois, however some regulated professions do need a professional licence to practice. Depending on the city or county where the business is located, a licence may be necessary. In Chicago, particular industries may also be subject to additional fees. For instance, pop-up stores charge $25 for five days, $50 for fifty days, and various tier-based fees up to $125 for a full year. For more information, businesses should contact the Small Business Development Centre or their local government.
Businesses must submit a Form BT-1 application for taxes in Indiana, one for each location where they conduct business. A $25 non-refundable fee is required for retail stores to receive their Retail Merchants Certificate.
Depending on whether a business is subject to Iowa authority or licensing board regulation, different Iowa business licence requirements apply. Most retail establishments require a sales tax permit. In Iowa, registering a trade name often costs less than $10. For additional help and information, companies should contact their regional small business development centres.
Businesses located in Kansas are exempt from state general business licence fees. Instead, the county and city levels are in charge of licensing and fees.
There is no statewide mandate for business licences in Kentucky. Certain business kinds require one or more unique permissions or licences.
Additionally, no statewide business licence requirement exists in Louisiana. Nevertheless, many cities have their own licensing standards and costs. For instance, New Orleans levies fees on the revenue generated by a specific class of firms.
In Maine, cities and towns are responsible for managing general business licences. Application fees for business licences in Portland are $45; annual renewal fees are $35. For information on requirements and costs for each city, see the licensing centre page on Maine’s Business Answers website.
In Maryland, a general business licence is not necessary. Nevertheless, based on the kind of business, there may be licence and permission requirements. Depending on the size of the local municipality and whether you utilise a warehouse to keep products, for instance, a storage warehouse licence would cost $30 to $150 annually.
In Massachusetts, licensing and permits are based on the type of industry.
Business licensing in Michigan is heavily based on the type of business. Licensing fees vary widely.
In Minnesota, the initial filing fee ranges from $30 to $200 for mail-in submissions and from $50 to $220 for in-person or online submissions. There is no yearly renewal charge. There can be additional licences and fees in some cities and counties.
Mississippi charges a $50 initial filing cost and a $25 yearly report fee, but no official business licence is provided by the state.
In Missouri, filing fees are calculated depending on a company’s authorised capital. The prices vary from $58 to $143.
Although some industries must submit an application for a licence to the Department of Revenue, the state of Montana does not require a general licence. The majority of counties and localities have their own requirements for company licensing. For instance, Bozeman mandates that all businesses obtain a licence, with a $25 (or $150 for medicinal marijuana enterprises) application fee. Business owners can inquire about unique licensing requirements with their local county.
Nebraska doesn’t have a universal licence requirement, however some companies might need to apply for a licence with the government. Business owners should contact their local government for information on unique local regulations since some localities have their own licence requirements.
200 for every other kind of business. On the final day of the month that the business licence was first submitted, the fee and form are due. Additionally, enterprises must acquire a municipal licence from the city or county where they conduct business in Nevada. All enterprises in Nevada are required to have a state business licence, which must be renewed every year. $500 is the renewal cost for businesses, and $
Businesses in New Hampshire are not required to have a general business licence in order to operate. However, depending on the industry, different licences are needed.
In New Jersey, obtaining a business licence is a requirement for all companies. For-profit companies and international non-profit organisations must pay a fee of $125, while domestic non-profit organisations are subject to a $75 reduction.
There are no requirements for state-wide business licences in New Mexico. But licensing policies could differ between cities. For instance, Taos charges $35 for registration.
Businesses in New York are not required to pay for a state licence, although many are required to obtain a licence at the municipal level. A Business Certificate (also known as a Certificate of Assumed Name) form must be filed in New York City at the county clerk’s office, and there are filing fees of between $100 and $120.
The articles of incorporation must be filed in North Carolina, and reserving a corporate name costs an additional $30. There can be additional fees.
There are no state-issued business licences in North Dakota. Nevertheless, depending on their industry, some businesses could have to register, with costs ranging from $0 to $5,000.
There are no basic business licence requirements in Ohio, but any individual or organisation who sells “tangible personal property or taxable services” in retail must apply for a vendor’s licence, which costs $25. There can also be additional licences and charges.
An Oklahoma business licence is not necessary. For some industries, there are additional licensing requirements.
Oregon does not require a state business licence, similar to Oklahoma, however some industries are subject to additional regulations. Some counties and cities likewise demand a licence.
The state of Pennsylvania charges businesses $125 to file their articles of incorporation. A $70 annual report fee is also charged.
In Rhode Island, the cost of the initial filing varies based on the type of business. In addition, there are two annual fees: a $400 tax cost and a $50 report fee (or $60 for benefit corporations).
There is no statewide business licence in South Carolina. Local governments oversee the administration of all licences, permits, and laws.
There is no basic business licensing fee in South Dakota, although depending on the industry, some enterprises will need registrations or permits.
Businesses in Texas must register in order to pay taxes. Every new company must register and pay a $15 registration fee. Businesses operating within the state must get either a minimum activity licence (if annual revenue exceeds $3,000 but falls below $10,000) or a standard business licence (if annual revenue exceeds $10,000).
Texas doesn’t have any general business licensing requirements or fees.
Every business in Utah must receive a licence from their neighbourhood municipality, which has its own specifications.
The one-time filing fee in Vermont for articles of incorporation is $125. Additionally, companies pay a $45 annual report charge.
Businesses in Virginia can register with Business One Stop for $20.
In Washington, the majority of firms must apply for a business licence. The range of processing costs is $0 to $90.00.
There is no general business licence in West Virginia. Each company entity has its own rules and specifications.
A statewide business license is not necessary in Wisconsin. To make sure you’re correctly collecting and paying sales tax, you must register with the state.
Wyoming doesn’t grant company licences, although it does charge a $25 registration fee each year.
Make your business legit
Long-term success depends on registering your firm and obtaining the required licenses and permissions. After completing those time-consuming tasks, you may return to the exciting aspects of starting and expanding your firm.
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