Business Licenses and Permits

One of the first tasks for any new business is to obtain licenses and permits and an ongoing business may make changes that require new licenses or permits. Some licenses and permits are federal, some state, and some local. Figuring out what to apply for and how is complex. In this article, you'll learn about the various types of licenses and permits, which might apply to your specific type of business, and how to obtain these documents.

What's the Difference Between a License and a Permit?

The distinction between a license and a permit is subtle but important. If you look up the definitions for both, you'll see the other mentioned as a synonym.

Licenses are more general, granting permission to do something or use something. For example, a business wanting to sell liquor must get a license. Sometimes a license requires a test, as for a professional license.

Permits are usually given for safety issues, like health permits, and may require an inspection before they are granted. A permit to carry a gun is another example. 

Licenses and Permits for Business Startup

Starting a business? If you are not doing business as your own name, you will need a fictitious name (or "DBA" (doing business as) permit. In addition, other specific types of licenses or permits may be required before you can open your doors for business.

Federal Business Licenses and Permits

From the Small Business Administration (SBA), a listing of the types of business activities that are regulated by federal agencies. 

State Permits and Licenses

Your state will require you to have several different types of licenses and permits, depending on what kind of business you are starting, whether you have employees and if you are selling products or services. You may need a professional license or another special state license.

The article includes links to state taxing authorities. You should also check the Small Business Administration's article on State Licenses and Permits for a listing of state business license offices.

Local Business Permits

Each city and county has specific permits that must be approved. Whether your business must have a permit depends on your business type and location. For example, a home-based business must usually obtain a variance from the municipality to do business in a residential area. Zoning permits are also discussed in this article.

Special Licenses and Permits

Every town, city, and county has special kinds of licenses to do business in their domain. Special events usually require a permit, as do certain types of items sold (liquor licenses, for example). Check with your local business office to see what types of licenses or permits might be required.

Building and Zoning Permits

Whether you are buying an existing building or building your own, you should check on the city's requirements for building and zoning. For changes to a building or a new building, you will need a permit that allows construction to begin and an occupancy permit that allows you to take possession of the building. Your contractor should be able to help with these permits.

You may also need to deal with zoning restrictions if you want to change from one type of zoning to another. For a home business, or a business in an area previously not zoned for your type of business, you may need to request a zoning change. Depending on your business classification, you may also need a health permit before you can open your business, and you will need to submit to an annual health department review.