Small Business Licenses and Permits
When you start a small business, you might need to obtain specific licenses and permits from federal, state, and local government. Since licensing and permit requirements for small businesses can vary from state to state, it’s vital that you get in touch with your state and local government to make sure you are in compliance.
Basic business operation license
Business licenses are permits issued by a government agency that allow individuals or companies to conduct business within the government’s geographical jurisdiction. It is the authorization to start a business issued by the local government.
Federal employer identification number (EIN)
Also called a tax identification number, the EIN is required for almost all types of businesses. The EIN is a nine-digit number assigned by the IRS. It is used to identify the tax accounts of employers and certain others who have no employees. The IRS uses the number to identify taxpayers who are required to file various business tax returns. According to the IRS, you may apply for an EIN online if your principal business is located in the United States or U.S. Territories. The person applying online must have a valid Taxpayer Identification Number.
Fictitious business name permit
This permit is also called a “dba” or “doing business as” permit. A fictitious name is a business name that is different from your personal name, the names of your partners or the officially registered name of your LLC or corporation.
It’s important to note that when you form a business, the legal name of the business defaults to the name of the person or entity that owns the business, unless you choose to rename it and register it as a DBA name. According to the SBA, registering your DBA is done either with your county clerk’s office or with your state government, depending on where your business is located. There are a few states that do not require the registering of fictitious business names.
Sales tax license
Before you collect sales tax, you should register for a sales tax permit with your state. Here’s a handy site that has all of the details for each state: How to Register for a Sales Tax Permit in Every State.
Special state-issued business license or permits
- Specialized permits or licenses are required if your business sells the following types of products:
- Lottery tickets
Special state-issued occupational / professional licenses
These are required for various services including:
- Medical care
- Auto repair
- Real estate sales
- Tax services
- Insurance sales
- Legal representation
Special federal business license or permits
These are required if your business will involves the following:
- Investment advising
- Drug manufacturing
- Preparation of meat products
- Ground transportation, i.e. trucking
- Manufacturing tobacco, alcohol, or firearms; or selling firearms
The SBA has a very helpful feature to help you identify the specific licenses or permits your business may need. Select a state from the list to learn about specific license and permit requirements in the area where your business is located: https://www.sba.gov/starting-business/business-licenses-permits/state-licenses-permits
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