So, you’re starting a business – congratulations! You already know that there’s a lot to take care of, from choosing your business structure to registering your business. You’ll probably also need a business license or permit – virtually every business does in order to operate legally. It depends on the kind of business you run, where it’s located and what state and federal rules apply. Here’s what you should know to make sure you’ll be running your business within the law.
Why Does My Businesses Need a License or Permit?
Licenses and permits serve two major purposes: They allow the government to track your business’s revenue for tax purposes, and they also protect the public.
For example, if your business is involved in activities supervised and regulated by a federal agency – such as selling alcohol, firearms, radio broadcasting, commercial fishing, etc. – then you’ll likely need to obtain a federal license or permit.
Other special state licenses, known as professional licenses, are required for dentists, hairdressers, veterinarians, realtors, physicians and more. These licenses indicate the level of expertise of an employee or business owner and that they’ve met a certain requirements when it comes to training or education.
State licenses are also required of businesses, such as restaurants and those that serve alcohol, to demonstrate that they meet certain state standards or codes. Particular regulations may vary by state.