Why Do You Need Licenses and Permits for Your Business?
Obtaining the proper licenses and permits when you are starting your own business provides several benefits. Licenses and permits ensure that you are operating your business legally for your location, your industry, and your business entity. Licenses and permits can help you attract customers, suppliers, partners, or investors by demonstrating your business is official and legal. By understanding the specific licenses and permits required for your business, you can operate confidently and compliantly from the start. While this session provides general guidelines, MOBI does not provide legal advice, and it is recommended that you consult with an attorney specializing in business law to ensure you meet all legal requirements.
General Guidelines for Obtaining Licenses and Permits
- Research all required licenses and permits before starting your business.
- Remember that the licenses and permits you will need depend on your location, your type of business and/or industry, and your business entity, among other factors (for example, whether you have employees).
- Create a list of the requirements, costs, and renewal terms for each license and permit.
- Include the websites or contact information for each license or permit so it is easy to find if you have questions or need to renew.
For more information on this topic visit MOBI's Licenses and Permits session. Scroll to the bottom or click the button to the right to download this as a Word file.
MOBI Licenses and Permits Checklist
Basic Licenses and Permits
- Business Tax License/Business License
- Verify zoning compliance.
- Obtain a business tax license from your local government.
- Pay the required fee.
- Renew the license annually.
- Fictitious Business Name/Doing Business As (DBA)
- Choose and verify the availability of your business name.
- File your Fictitious Business Name/DBA with the appropriate county office.
- Pay the required fee.
- Publish your Fictitious Business Name/DBA in a local publication if required.
- Renew the DBA every 5 years (or appropriate term in your region).
- Tax Identification Number (SSN, ITIN, or EIN)
- Determine the appropriate tax identification number for your business. An Employer Identification Number (EIN) is recommended for ALL businesses to protect the privacy of your personal SSN or ITIN. An EIN is required for some businesses.
- Apply for a free EIN through the IRS website.
Additional Requirements Depending on Business Type
- Home-Based Businesses
- Verify if a home-based business is allowed in your area.
- Check zoning restrictions and obtain necessary variances or conditional-use permits.
- Food Businesses
- Obtain a Health Department Permit.
- Ensure food handling/safety certification for all employees.
- Comply with commercial kitchen requirements if necessary.
- Follow labeling and packaging regulations.
- Seller’s Permit/Sales Tax Permit/Sales Tax License
- Register for a seller’s permit through your state’s Board of Equalization, Franchise Tax Board, or Sales Tax Commission, if your business sells tangible goods or services that are subject to sales tax in their location.
- Home-Based Care Businesses
- Obtain necessary licenses from your state’s Department of Social Services or equivalent.
- Verify zoning compliance.
- Ensure home inspection for health and safety standards.
- Complete background checks and fingerprinting for all staff.
- State Licenses
- Determine if your profession requires a state license (e.g. accountants, brokers, contractors).
- Take and pass any required exams.
- Apply for the state license.
- County Permits
- Obtain a county Health Department Permit if required.
- Secure a Building or Construction Permit for any property modifications.
- Apply for an Alcohol License if selling or serving alcoholic beverages.
- Get a Signage Permit for business signage if needed.
- Police Department Approvals
- Verify if your business type requires police department approval.
- Fire Department Approvals
- Schedule inspections for fire sprinklers and restaurant exhaust hoods if applicable.
- Determine the maximum capacity for your establishment.
- Federal Licenses and Permits
- Check if your business requires federal licensing (e.g. broadcasting, drug manufacturing).
- Apply through the appropriate agency.
Final Steps
- Consult with an attorney specializing in business law to ensure all legal requirements are met.
- Maintain all documentation and keep licenses and permits in a safe place.
- Set reminders for renewal dates to ensure continuous compliance.
- Consider using professional services for ongoing compliance and legal matters.
