Small Business Series: Chapter Three, Licenses and Permits*
Last month, we looked at different legal structures for small businesses. Once you have chosen the best option for your business, you need to file for the correct licenses and permits before you begin operation. All businesses, even sole proprietorships operating under your own name requires some type of license. Luckily, you can easily prepare and file most forms online. Below are the common licenses and permits your new business requires.
General business license.
Almost all businesses require some type of general business license, which can be obtained from your city’s website.
“Doing business as” (DBA) license or permit.
If you’ll be running your business under a fictitious business name, you will need to file for a DBA permit through your county clerk’s office. Generally, you will need to run a newspaper ad running your proposed DBA name. Before filing for a DBA, it is a good idea to do a search for your business name on the Secretary of State’s website.
Federal tax identification number.
Most businesses will have to apply for a federal EIN, or employer identification number, also known as a tax identification number. Sole Proprietors may use their social security number instead.
Sales tax permit.
If you plan on selling goods, you are required to obtain a seller’s permit from the State Board of Equalization. This permit will allow you to collect and pay sales tax on your goods.
Home occupation permit.
If you operate your business from your home, you may be required to obtain a home occupation permit from your city or county.
Health permits.
Certain business may require health permits before operations. The most common types of businesses that require health permits are restaurants, catering companies, tattoo parlors, salons, and flea markets.
Fire department permits.
If your business involves the use of flammable materials, you likely require a fire department permit before beginning operations. Obtaining the permit will require an inspection by your local fire department.
Special federal licenses and permits.
Your business may also require additional licenses or permits if your business involves activities regulated by the federal government, such as alcohol, firearms or wildlife-related activities.
*This list of license and permit examples may or may not apply to your business. Consult your local and state governments, and small business associations to determine the licenses and permits required for your type of business and its location.