Benefits of Having a Business License

In spite of the fact that a business license is not required for your business to operate, you may still have certain benefits and abilities that you would not otherwise have. Business licenses are relatively inexpensive and easy to obtain through your secretary of state.

The secretary of state’s office will often provide you with a form to complete in order to obtain a business license. Obtaining a business license can be extremely beneficial for you when running a business. Once you get your license, you will be able to get the benefits mentioned below.

You are Legally Protected

A business must meet all requirements of the city granting the license before receiving a business license. When a new business owner applies for a license, it ensures that his or her infrastructure, plans, and policies are in conformity with city regulations. Furthermore, many cities require businesses to have licenses, so owning a license prevents the owner from being shut down for operating an illegal business.

Licensing Build Credibility

New businesses often face skepticism from customers. Before buying goods or services, particularly over the Internet, customers want to make sure that the business is legitimate.

It serves as a reminder to customers that they are dealing with a legitimate business and not a scammer if the entrepreneur displays her business license in her store or on her company website. Additionally, other businesses the entrepreneur does business with may also need to see the business license.

Receiving Funding

There are many cities that offer to finance to new businesses, particularly start-ups. In order to be eligible for business funds, a business must have a business license indicating that its venture has been approved by the city.

Tax Compliance

Business licenses are important from the perspective of the city issuing the license since they maintain a record of all businesses that may be liable for tax payments. In many cities, license holders are required to pay quarterly taxes on merchandise sold in order to maintain their license.

From an entrepreneur’s point of view, business licenses are equally important since they enable them to easily keep up with taxes owed to the city, keeping them out of legal and financial trouble. Paying city taxes to keep the license current can help to remind business owners that they must pay other taxes due. Many businesses must also pay state and federal taxes on a quarterly basis.

Wholesale License Benefits

When an entrepreneur resells merchandise purchased elsewhere, he can get the merchandise at a lower cost if he has a wholesale license.

Purchasing wholesale licenses allows entrepreneurs to purchase items at the wholesale cost-the cost of producing the item rather than purchasing it at the retail price. Entrepreneurs do not pay tax on items bought for resale; the customer pays tax when the item is resold.

Manufacturers often require entrepreneurs to show them a wholesale license before selling discounted items. This ensures that the entrepreneur is legitimate, not just someone who wants to buy items for personal use at a lower price.

Easy Entry into Foreign Market

By licensing your product or service properly, you can take your product or service into new markets much more easily than if you were doing the work on your own. A foreign business can be granted limited rights to manufacture and sell your product or deliver your service if you have developed a product with a trademark, patent, or copyright.

It is a much easier and more affordable method of entering a foreign market and expanding your business, as the license enables the IP to cross borders. Therefore, you can avoid tariff barriers to entry since a domestic company is using the intellectual property just as the licensor might be doing so domestically.