Different Types of Business Licenses
Anywhere in the world, you need different types of business licenses to conduct business. You will need a license depending on the nature of your business and the location where it is operated. Some businesses require multiple licenses and permits from various levels of government in order to operate.
The first step to getting a business license is to determine which one(s) applies to your business. Online searches can easily provide you with this information, but you should also consider checking with your municipal government what the requirements are for starting a new business. You may have other obligations and regulations to follow that do not require a license or permit for your business.
Different Types of Business Licenses
A typical business needs at least one license, although the requirements vary greatly from industry to industry. There are a few different types of licenses and permits that you may need:
1. General Business License
Almost every state requires you to have a general business license to run your business. Business licenses are typically issued by the Department of Revenues or the Secretary of State, whichever office handles business registrations. You might also need a general business license at the city or county level, so check local regulations.
2. Seller’s Permit
Every state with a sales tax requires businesses to have a seller’s permit. By obtaining this permit, you will be able to sell your products and services in stores and online, as well as collect sales tax on any taxable goods. In some areas, seller’s permits are known as sales tax permits or licenses, and they may be required by local governments.
3. Doing Business As (DBA) License
By default, your business name is your personal name if you own a sole proprietorship or partnership. Doing business as (DBA) license allows you to legally run your business under a different brand name than what you’ve registered.
Other types of business entities, such as LLCs or S corporations, can also rebrand without having to go through the time-consuming process of changing their legal business name. The DBA license may be called a fictitious name or trade name license in some areas.
4. Home Occupation Permit
There is no doubt that remote work is growing in popularity across the United States. Human resource executives in the United States expect that at least 40% of their teams will work primarily remotely within a few years. In the event that you’ve decided to work from home, you might be required to obtain a home occupation permit.
If your neighborhood isn’t already zoned for home-based work, you’ll need to apply for this permit through your local regulatory agency.
5. Liquor License
Whatever business you run that serves alcohol, such as a bar, restaurant, nightclub, event venue, or event space, you will almost certainly need to obtain a liquor license. Different types of liquor licenses are available in most states, including ones for exclusively serving beer and wine or running a liquor store.
Business licenses of this type are typically obtained at the state level, but you should check to make sure that you are operating in an alcohol-free area before applying. Additionally, you will need to check for any federal licensing or permits from the Alcohol and Tobacco Tax and Trade Bureau before you begin selling alcohol.
6. Professional Licenses
It is possible for certain types of companies (and their employees) to require professional licenses before they can operate. This is especially common with service-based businesses. Whether you provide accounting, legal counsel, lawn care, plumbing, or massage therapy, you should research the special license requirements for your industry in your city and state.
7. Health Permits
The health department requires that many types of businesses—such as restaurants, hair salons, tattoo parlors, and waste haulers—complete inspections to obtain health permits. These permits help keep you, your guests, and your team safe while operating.
8. Zoning Permit
There won’t be any liquor store next to daycare any time soon. That’s because every municipality has zoning regulations that define what businesses can operate where as well as which areas are strictly residential. If you want to set up a business location, you should speak with your city hall first.
9. Federal Business License
You have to meet certain requirements in order to obtain a federal license to practice your trade. The requirements will vary depending on your region and the type of business you intend to start. The majority of business licenses required by the federal government are for businesses operating across state lines and regions.
If you plan on trading drugs or processing meat, for instance, you will have to meet FDA (Food and Drug Administration) requirements. You must establish your business as a sole proprietorship, partnership, or LLC before applying for a federal business license.
Business Licenses are Good for Business
You should be proud of getting a business license. You will gain credibility for your business and create a trust that will turn into customer loyalty. Display your licenses on the walls of your business location or showcase them on your website.
As soon as you claim your business page, you can use your trade license to stand out through Verified License badges or by highlighting it under the business information section. There is no limit to what you can do.
FAQs:
The types of business licenses vary based on the nature of the business and the industry. Common types include general business licenses, professional licenses, occupational licenses, health and safety permits, liquor licenses, and specialized industry licenses.
A general business license, also known as a basic business license, is a requirement for most businesses to operate legally. It ensures compliance with local regulations and covers basic operational aspects such as zoning, taxation, and permits.
Professional licenses are specific to certain occupations or professions that require specialized knowledge or skills. Examples include licenses for doctors, lawyers, real estate agents, contractors, and cosmetologists. These licenses ensure that professionals meet specific standards and regulations.
Occupational licenses, also known as trade licenses, are required for individuals or businesses engaged in specific trades or skilled labor. Examples include electricians, plumbers, carpenters, and HVAC technicians. These licenses ensure competency and adherence to safety standards in their respective fields.
Yes, certain industries have their own licenses to regulate specific activities. Examples include liquor licenses for establishments selling alcoholic beverages, food service permits for restaurants, healthcare facility licenses, and transportation-related licenses such as taxi permits or commercial driver’s licenses. These licenses address industry-specific regulations and requirements.
