What You Should Know about Licenses
and Permits for Small Businesses
Do you know what you need to stay compliant as a small business? If not, you need to discuss this subject with a knowledgeable business lawyer. You simply cannot open your business without making sure you are meeting the mandates set for your industry locally and federally.
Obtaining a Permit for Your Industry
Depending on your industry, you may need to obtain a permit if your business is regulated by a specific governmental agency. For instance, if you sell or import alcoholic beverages, you need to know what license to obtain through the Alcohol and Tobacco Tax and Trade Bureau.
On the other hand, if you plan to operate a business that transports people or goods by plane, or you are involved in maintaining aircraft, you need to check with the Federal Aviation Administration (FAA) about licensing.
Stay Compliant – Contact a Lawyer
In most instances, you will need to check on getting licenses or permits from you state, city, or county where you’ve located your business. Make sure you work with a business attorney who knows all about business licenses and permits, so you can stay compliant in this respect. Otherwise, don’t expect to stay in business for long.
The reason for a license or permit is to make sure you are following the established procedures or regulations for your business. For instance, if you own a restaurant, you need to obtain a food and beverage license to serve beverages and food.
Also, license holders, in this case, must take a food safety course. Doing so will demonstrate that you know the proper methods for preparing and storing foods. If you have an outdoor eating area, you may need to acquire a sidewalk café permit. In addition, you may be required to obtain one license to serve spirits and another license to serve beer and wine.
Examples of Licenses and Permits
Therefore, you cannot just open your business without seeing what you need to operate in your industry. Examples of licenses or permits that small businesses often need include the following:
- Security alarm permit
- Zoning permit
- Parking lot permit
- Barber shop license
- Daycare license
- Health license
- Environmental permit
- Entertainment license
Specialty Occupational Licenses
In some instances, some small businesses need to obtain specialty licenses. As the name suggests, these licenses are designed to show that your employees have the skills to provide specific services. Therefore, the licenses may cover the following occupations:
- Solar panel installation
- Fire protection
- Heating and air-conditioning
- Collection of debts
- Limousine services
- Nursery retailing
Finding Out What You’ll Need to Stay Compliant
To make sure you are operating legally as a small business, you need to check what state licenses and permits you need first. You can do this by visiting the Secretary of State website for your locale. You may need to go to your county’s or city’s business development website as well. To gain access to the sites, you will need to have your federal employer identification number (FEIN) or the code for your industry related to the North American Industry Classification System (NAICS).
As it currently stands (August 2020), cities nationwide are working hard to ensure all types of businesses survive. In some places, the processing of permits of licenses has speeded up to keep the economy on track.
For instance, Chicago officials have expanded the expiration date on liquor licenses for patios to 180 days from the prior 11-day requirement. As a small business owner, getting the proper permits and licenses shows that you wish to contribute to the economic success of your community.
Some Common Licenses and Permits
Below, you will find a checklist that you can reference when learning more about the licenses/permits you will need. Make sure you cover your operations by knowing what endorsements are needed and their expiration dates.
- General Business License
Most businesses normally need to get a general license to operate in the city or county where they locate.
- Doing Business As (DBA) License or Permit
If you plan to operate a business under a fictitious name, you usually need to register the DBA name with the Secretary of State’s office.
- Federal and State ID Numbers
To pay taxes or open a business bank account, small business owners must apply for an employer identification number or EIN. You may also have to get a tax ID number on the state or local level.
- Sales Tax Permit
If you sell products online or off-line, you will need to collect sales tax. A business permit is normally required by the state so you can collect the tax.
- Zoning Permits
Some businesses must obtain a zoning permit to comply with local zoning regulations. These regulations can affect manufacturers, restaurants, and even owners operating out of their home. Some business owners must apply for a conditional-use permit if the area in which they do business is not zoned commercially.
- Home Occupation Permit
Just like it sounds, a home occupation permit is required for people who operate out of a home office. If you plan to do business inside your home, this permit may be necessary.
- Professional Licenses
Professional licenses are designed for specific occupations or professionals. Regulated professions that relate to accounting or the law often require special licensure.
- Health Permits
If you handle food preparation in your business, you may be required to secure a health permit.
- Fire Department Permits
Operating a business that involves the use of flammable materials may necessitate an inspection or the issuance of a permit by the local fire department.
- Sign Permit
Sometimes, you may have to get a permit before you place a sign for your business. You may also have to place a sign of a specific size or locate it according to current regulations.
- Construction Permit
If you plan to make structural changes in the place you do business, you normally have to secure a construction permit from your local jurisdiction.
Make sure you know what permits or licenses to get if you want to operate as a small business. If you need help along these lines, consult with an attorney. Don’t try to go it alone. Make sure you satisfy your industry’s or locale’s requirements for permits and/or licensing.