One of the first and crucial start before starting a business in the United States is to get all the licenses required for you to start the business. Information dwells very fast and it is quite necessary to chalk out your steps before you apply for a business license. There are some compulsory rules and regulations of the country as well as the state that needs to be complied with. Therefore you need to understand the steps on, how to get a business license.
What is a Business License?
Business Licenses are permits issued by the government that allows you to operate and function in the premises where the license is issued. It varies from state to state as the county, state, federal and municipal agencies issue different types of business licenses. This license allows you to provide the service in a particular geographical area. All businesses may not need a business license to operate as it depends on the nature of the business you want to establish.
Types of Business Licenses
There are different types of business licenses depending on the business you want to start. The types of Business Licenses are mentioned below-
- Business Operating License – This type of business license permits you to run your business. In some states, you need to apply for this license from the states while in others it can be from the district or county as well.
- Seller’s Permit -This permit allows you to operate your business online and collect sales tax from buyers.
- DBA or fictitious name statement – Often our legally registered name is different from the ones we locally use. This License allows us to use two different names for state and county levels.
- Special permits – There are certain businesses where more than one license is required. These include zoning and building permits depending on your type of business.
- Industry licenses – For business involving childcare, law and medical industry licenses are required. You need to apply to the state you are starting your business in.
- Federal licenses – certain Industries are regulated by the Government of the USA and one needs to specifically apply for federal licenses before starting their business.
Below you will find the list of businesses and their agency that issues the license.
How To Get A Business License?
The need and type of business license vary from state to state. However, we have mentioned some steps which are common to follow irrespective of the state.
- By now you must have decided the business entity you want to form and in which state. You need to visit the state website and go through the business licenses mentioned according to your business types. After you have completed the research, you need to contact the government agency that can help you apply for your business license.
- You need to apply all the necessary paperwork related to the type of business you are forming. You may also need to pay a processing fee for your license.
- Once you have applied, you need to wait for approval. The state might take some time to go through your documents. After you receive the approval you can start with your business.
- Remember to renew your license before it gets past the expiry date.
How Long Does it Take to Get a Business License?
The time needed to get your business license done varies from state to state. You may need to wait for two days to two weeks to get your license approval. If you plan to get it sooner you can try and apply for an online application if applicable for the state you are applying to. In addition, try to attach all the necessary documents without any fail to ensure a smoother approval process.
How Much Does A Business License Cost?
The cost varies from state to state and several other factors as well. Depending on the type of business and in which area you want to apply the total cost varies. On average it can lie somewhere between $50 – $200. In addition, the business license is not compulsory for certain business types, and you may need to pay zero cost towards your license cost.
Where Can I Get A Business License?
You will find your license related information on the state website. Depending on the state the laws may also vary. Additionally, you can also look for the Department of Business and Professional Regulation or the State License Beaureau to know the exact process to apply for your license.
Should I Form an LLC or Get My Business License First?
It is better to form an LLC before you get your License as the entity name is an important document. If you start with getting a business license and then have a separate LLC, then you might have to request a change in the business name. The change of name may also incur some additional fees. Thus to avoid any future confusion it is best to start with forming your LLC and then apply for the License as well.
Conclusion
We hope by now you have all the necessary information on how to get a business license. There are a lot of small details that you must remember. So make sure you are sure about which business to form and where. At the same time, you must take ample time to apply for your license. Also, ensure that you check the supporting documents twice before submitting them to avoid any unexpected filing error.