What permits do founders need?
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Thumbs up for your start-up with the right license to go!
A business license permits an individual or company to conduct business within a particular jurisdiction. They are essential to legally operate a business and operating a business without a license can result in a fine and sometimes jail time.
Small Business Administration is your main contact
In the U.S., the Small Business Administration offers information about what licenses and permits are required based on the state your business is located in and to which industry your business belongs, since regulations vary by industry, state and locality. Other determining factors about which licenses are permits are required to run your business are the number of employees and the business structure, e.g., sole proprietorship, LLC, corporation.
Range of Licenses
Licenses will range from a basic operating license to very specific permits. The following depicts a few of the possible licenses or permits you will be required to obtain:
- tax license: If you plan to sell a product or service you must acquire a sales tax license.
- state license: Generally, if the state regulates a particular service or product, e.g. alcohol or health care services, you will need a state license.
- zoning permits: Having a physical presence for your company, a home office or separate location, will require zoning permits or a permit to use the land for that particular purpose.
- health department license: If you plan to sell food, you will need a health department permit.
- fire department license: If you expect to have a large number of customers at one time in your business, such as a bar, you will be required to get a fire department license.
Check out your local regulations
To be sure that you know which licenses and permits you need to get, we suggest going to your town's city hall to find out which ones to get and how to apply. Your local government will also inform you whether you'll be required to obtain state licensing as well. Generally, if the state regulates a particular service or product, e.g. alcohol or health care services, you will need a state license as listed above.