Does Your Business Require Additional Licenses or Permits?
So, you have your business plans formulated, finances lined up, and customers practically banging your door down — but wait! Did you double check that you obtained all of the licenses you need to run you business? I know what you are saying — I’m not a hairdresser and I’m not operating heavy equipment, so what licenses could I possibly need? Whether you are a stylist (hairdresser is so 1990), construction worker, or freelance consultant, there are some basics every business owner needs to know about the permits and licenses required by law.
How do I know what permits I need?
Common sense may have given you a clue that you need to register your company with the IRS, because with life (and business) comes taxes. Every company must be issued an Employer ID number by the Internal Revenue Service. In addition to this EID, most states require their own form of tax identification or “charter” for businesses. The good news is many states are working with the IRS to simplify the application processes and use only one ID number for both Federal and state tax purposes. Is your state one of them? The IRS and many states have also moved the application process online to cut down on paperwork and decrease the amount of redundant information requested when filling out traditional forms. Do you need an EID?
OK… So you weren’t born yesterday. Even my cats knew that much from watching me open the beloved mail from the IRS all these years. Of course you registered your company with the IRS and state tax authorities, but what about the hidden requirements?
How do I know if my business requires additional licenses and permits?
The simple answer is: It depends on the type of business you are in. There are a set of industries that are regulated by the Federal government that require particular business licenses. If your business falls into any of the following categories, you probably have some additional Federal paperwork ahead of you:
- Agriculture
- Alcohol
- Aviation
- Firearms (yes, ammunition and explosives fall into this category)
- Fish & Wildlife
- Maritime Transportation
- Mining & Drilling
- Nuclear Energy
- Radio & Television Broadcasting
- Transportation & Logistics.
Permit Me, please!
If your business does not fall into one of the categories above, you are not quite in the clear. Most states have much more specific license requirements for particular types of businesses. Business.gov has developed a quick and easy-to-use tool called “Permit Me” to develop a checklist of the licenses and permits you need based on your business type and your location. Not all business types are currently represented, so if you do not see your business type, you can go to the interactive map to locate your state-specific regulatory information that way.
After you have submitted
Do not forget to make copies of all business forms! If you have taken the savvy route and filled out your forms online, make sure to print them out and file them in a safe place. A good tip that I have used is to file licenses and permits by the date they need to be renewed. For example, keep a folder for items that need to be renewed annually, bi-annually, etc.
Expanding Your Business?
If you are thinking of expanding your business, take time to investigate what that means for your existing licenses and permits. Will they still be applicable when you expand? If the expansion involves a new building, product, or service, you may need to update your information. Not all expansions will require new permits, but you will need to update your files!
