Below, we discuss what licenses and permits are needed to start a business.
What is a business license?
When you start a business, there are a lot of tasks to take care of. Obtaining proper licensing is one of those tasks. While there’s an array of permits and licenses that apply only to specific industries, most businesses in the U.S. also require some sort of license. Licenses may be issued at the federal, state, or local level.
If you offer a professional service, they might be one of many licenses and permits you need to obtain. Some states and municipalities require you to have a general business license simply to operate. In many locations across the U.S., you’ll need additional licenses and permits for specific business activities.
Unfortunately, there isn’t a way to check which licenses and permits you need without doing some research. You should set aside time to research the requirements for your industry, as well as your location.
General Business Licenses
Some (not all) states and local governments require you to get a general business license before you can conduct any business at all within their borders, regardless of your industry or entity type (corporation, limited liability company, sole proprietorship, partnership, etc.) These licenses don’t cover specific services that your business might provide, such as healthcare, food service, or professional trades.
Business Licenses vs. Business Registration
There’s a common misconception that if you’ve registered your business, you’re licensed to transact any and all business. It’s important to note that this is not the case. When you register your business, you typically file Articles of Organization (for a limited liability company, or LLC) or Articles of Incorporation (for a corporation) with your Secretary of State (or whatever agency in your state handles business formations). This allows you to legally incorporate your business or form an LLC. However, it doesn’t have anything to do with obtaining the licenses and permits you may need to operate a business within your industry.
Licensing at the Federal Level
Some industries require federal licensing to conduct business activities. The particular requirements to obtain federal licenses and permits vary depending on the industry and the issuing agency. If you operate in any of the following industries, check with the issuing agency to determine what licenses or permits you might need.
Many agricultural businesses import and transport products over state lines. That can include animals, plants, and a variety of other biological goods. If your company is involved in any of these activities, you likely need to apply for licensing from the U.S. Department of Agriculture.
Alcohol is a highly regulated industry. Whether you sell, import, manufacture, or are a wholesaler of alcohol, you’ll require a range of permits. When it comes to federal licensing, you’ll want to check with the Alcohol and Tobacco Tax and Trade Bureau to determine which licenses and permits you require.
If you’re in the business of transporting people or products via aircraft, you’ll need to obtain proper licensing from the Federal Aviation Administration. This regulation also applies to businesses that provide aircraft maintenance services.
If you harvest fish for sale, barter, or trade, your business is legally considered a commercial fishery. You’ll need to obtain a commercial fishing license from the National Oceanic and Atmospheric Administration Fisheries Service.
Firearms, Ammunition, and Explosives
Firearms, ammunition, and explosives are another industry that’s highly regulated by the federal government. If your business buys, sells, or imports any of these products, you need to contact the Bureau of Alcohol, Tobacco, Firearms, and Explosives to obtain proper licensing.
Fish and Wildlife
Wildlife activities, such as hunting and importing or exporting wildlife derivative products, are subject to federal regulations. As such, businesses that engage in these activities need to apply for a license from the U.S. Fish and Wildlife Service.
Any business that transports people or cargo across water might need to apply for a license from the Federal Maritime Commission. This agency regulates sea freight services to and from the United States.
Mining and Drilling
Any company that conducts drilling for mineral resources on federal land needs a license from the Bureau of Safety and Environmental Enforcement, which regulates the offshore energy industry.
If you engage in the distribution or disposal of nuclear materials, you need to obtain licensing from the U.S. Nuclear Regulatory Commission. This agency is responsible for regulating the use of radioactive materials to protect public safety and the environment.
Radio and Television Broadcasting
The Federal Communications Commission requires that all organizations broadcasting information via radio, television, wire, satellite, or cable obtain a license to do so.
Licensing at the State Level
On top of obtaining federal licenses, you might also need to obtain licenses from your state, depending on the activities you’re conducting. While the rules are different in each state, you might need a license to conduct the following business activities:
- Dry cleaning
- Food service
- Retail sales
- Hospitality (hotels, motels, etc.)
- Vending machines
Some state websites offer a search engine that helps you determine what types of licenses and permits your company will need. However, these lists don’t always include details about federal or local licenses. Therefore, it’s important to make sure you cross-reference any recommendations with information obtained from the Small Business Administration, your county, and your municipality.
As mentioned earlier, some states also require you to have a general business license to operate legally. States that require a general business license at the state level include:
- Washington, D.C.
- North Dakota
- South Carolina
- South Dakota
- West Virginia
It’s important to keep in mind that while your business may be licensed by the state, you might still need additional licenses from your county or municipality. Make sure to conduct thorough research to determine what combination of licenses you might need in your specific location.
Licensing at the Local Level
Many counties and municipalities require you to obtain a local business license. Depending on your location and its specific laws, this license might be needed even if your company is licensed at the state or federal level. You might need a general business license from your regional office, as well as permits that are specific to your business activities.
To determine exactly what you require at the local level, try searching the following websites:
- Your county and city offices
- The county clerk’s office
- Your state tax office
Professional licenses are issued by agencies that govern providers of professional services. If you or any of your employees offer regulated services, chances are good that your business or its employees need to obtain professional licensing.
These licenses are typically regulated at the state level. As such, if you or your employees practice in multiple states, you’ll likely need to obtain multiple professional licenses. While this list is not exhaustive, professions that require licenses include the following:
Accounting firms can obtain information about professional licensing from the National Association of State Boards of Accountancy.
If you, or any of your employees, are a practicing architect, you can’t provide professional services without adequate licensing. Information can be obtained from the National Council of Architectural Registration Boards.
Cosmetology and Hairstyling
Cosmetologists and hairstylists must undergo apprenticeships before obtaining licensing to provide services to clients. Information about licensing can be found online at the National Interstate Council of State Boards of Cosmetology’s website.
Dental Care and Medical Services
Dentistry, dental hygiene, nursing, and medical services are all regulated by separate licensing boards. Dentists and dental hygienists need to be licensed by the American Dental Association and the American Dental Hygienists Association, respectively. Nurses and doctors are required to be licensed by their state medical boards.
Engineers, as well as land surveyors, are required to obtain licensing from their state board. Information can be obtained from the National Council of Examiners for Engineering and Land Surveying.
All attorneys are required to pass state-specific examinations and must obtain a license to practice in the state they work in. Licenses are issued by each state’s bar association. More information about this can be found on the American Bar Association’s website.
Whether you provide pharmaceuticals directly to consumers or take part in the sale, manufacturing, or development of medications, you’ll need to obtain licensing from your state board. State boards are overseen by the National Association of Boards of Pharmacy.
As mentioned earlier, the above list is not exhaustive. If you provide any professional services whatsoever, be sure to investigate licensing requirements by contacting the agency that regulates your profession.
Other Types of Business Licenses and Permits
In addition to general and professional licenses and permits, your business might also require a variety of other permits, such as:
- Zoning permits
- Health permits
- Environmental permits
- Building permits
Which of these permits you need will depend on where you run your business, as well as the products or services you provide. It’s best to check with your city or county office to determine which of these permits might be needed.
Special Permits for Home-Based Businesses
If your business office is located in your home, you could be subject to an array of license and permit requirements. Depending on the regulations in your city and county, that might include:
- Home occupation permit
- Zoning permit
- Fire permit
- Sign permit
- Special use permit
Maintaining Your Licensing
Most licenses and permits require regular renewals. Depending on which licenses your business has, that might mean that you’re subject to periodic renewal fees. You may also need to re-submit applications after a certain period of time has lapsed or provide annual reports to your governing agency. Be sure to take note of the requirements of each license and permit you possess.
When you’re ready to obtain the correct licenses and permits for your business, try our business license report. Our partners use the data you provide, including your business location, industry, and activities, to identify potential licensing requirements. These partners search federal, state, and local regulations to help ensure that you’ve got all the information you need to get started.
Licenses and Permits FAQ
- Do all businesses need a license?
Although many businesses require some licenses or permits to operate legally, there are circumstances in which a license isn’t required. This will depend largely on factors like your industry and location. Some states and local goverments do require a general business license to conduct any business at all within their borders.
- Can you sell things without a license?
In many cases, your business will require a variety of permits and licenses in order to sell products. The exact licenses you need depend on what you’re selling, so it’s best to conduct thorough research prior to engaging in any business transactions.
- Is it legal to run a business from home?
Running a business out of your home is sometimes legal provided you apply for the proper licenses and permits. Requirements vary by location, and further information can typically be obtained by your city or county’s licensing office.
- What kind of license do I need for an online business?
Licensing requirements for online businesses are often the same as those for physical businesses. However, some permits required by physical businesses, such as zoning and building permits, don’t always apply to online businesses.
- Do I need a license to sell on Amazon or Shopify?
Some states may require you to hold a seller’s permit if you want to earn money selling products online using Amazon, Shopify, Etsy, or other platforms. It’s best to research the specific requirements in your state by visiting the website for your state’s tax or revenue department.