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How to Get a Business License

Updated on February 9, 2014
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Kate is a researcher and writer who holds a Bachelor of Science (B.S.) degree from Sonoma State University in California.

Before any one can operate any business, it is essential to have a license in order to do so within any city or county. Illegally operating a business can land you in jail and with heavy fines. Every business needs a federal, state or local license or permit in order to operate. The business license can vary anywhere from being a standard license to a specific permit.

Who Issues Out the Business License

State policies vary when a regarding business license. So understand the licensing rules where your business will be located. A business license can be obtained at a courthouse or the city hall. Usually a simple application and a small fee (usually under $75) is all you need.

Understanding the Business Type

Before you get a license, understand what type of business you’ll engage in. If you’ve a business which involves actions administered and regulated by a federal organization, a federal license may be needed.

Other licenses or permits involving a federal government are agriculture, fish and wildlife, alcohol, tobacco, firearms, explosives, chemicals and aviation.

Earning an income with a home business has become exceedingly popular in recent years.
Earning an income with a home business has become exceedingly popular in recent years.

Running a Home Business

If you’re deciding on running a business from home, investigate local zoning ordinances governing home-based businesses. Strict zoning laws may affect residential neighborhoods and may have undesirable influences on trying to set up home-base operations. Nevertheless, you can avoid that with a conditional-use permit.

Buildings like condominiums, townhomes and planned residential districts may have negative effects on home-based licenses. However, since the coming of the internet, opening businesses online have increased considerably. It is for that reason that support is increasing for home-based businesses.

Getting a DBA

A “DBA” means “doing business as” and is needed as a legal name to give your business. Most states require a DBA that allows sole proprietors and general partnerships to enforce contracts signed under the business name. Second, other business won’t know of your existence.

You must visit the local county clerk’s office and inquire about DBA fees and requirements. The county clerk will conduct a name search for the business to make sure that it is not taken.

Business ID Number

Your business must have an ID number like a person. But you must never use your own ID for your business. You can get a Federal Tax ID Number from the IRS. You can apply online, through the mail, fax or by phone.

The Employment Identification Number that you’ll receive can be used with business tasks like applying for filing tax returns and opening a business bank account.

Tax Deductions

Make sure you understand tax knowledge. Business profit is always affected by changes to the tax code. You can hire a tax professional to deal with your business taxes or do it yourself. If you decide to do it yourself, make sure you buy good tax software.

Obtaining Legal Forms

Avoiding legal business trouble is very important. In order to protect your business, understand legal documents such buying, selling and renting contracts, lending and borrowing paperwork. If you don't have your own attorney (and most start up businesses don't), then you can use an online site such as: LegalZoom.com to help you. Sites like Legal Zoom will allow you to buy legal contracts and papers for small one-time fees.

It is most-likely that your business will need insurance to protect against accidents. A free quote will tell you exactly what type of benefits you’ll receive.

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