With the many tasks involved in starting a small business it can be easy to forget the important legal requirements of setting your business up. Governments require licenses for two reasons: to raise money and to protect the public. Almost all state and local governments require that businesses that choose to operate in their area get licenses and permits in order to operate. In many cases, depending on the type of business that you operate, you will also be required to obtain federal government licenses or permits. One example is that you are required to apply for a Federal Employer Identification Number and pay payroll taxes. The exception is sole proprietors, who only have to apply for a Federal Employer Identification Number if they have employees.
You can find out which license and permits are requires for your business by calling the state and local government offices in your area and asking them to send you information and necessary forms. Home based businesses are not exempt from local legislation. Consult your local zoning ordinances because some jurisdictions prohibit home-operated businesses. Call your city hall and ask for zoning information.
There are two types of business licenses: general and special. A business license basically grants you the right to operate a business in your locality. The special license is issued to businesses that provide products or services that require regulation. For example, special licenses are issued to doctors, lawyers, hair dressers, massage therapists and others who have met a certain level of training or education. Contact your city’s business licensing department to find out the requirements in your area for getting a business license. When you file your application for a business license the city’s zoning board will check to make sure that you are zoned for operating a business in your location. You cannot operate a business in an area that is not zoned for that type of business, unless you get what is called a variance or conditional use permit. In order to get a variance you must present your case in front of the city’s planning commission and show that your business will not disrupt the character of the neighborhood in which you plan to operate.
Ordinances are the tools of the state and local government, used to regular the safety, structure, and appearance of the communities in which they operate. Zoning ordinances are a good example, and a common type of ordinance. Once your local government has determined that you have complied with all city ordinances, you can be issued a permit that will enable you to operate your business.
Fire department permits: If you use any kind of flammable materials in the production of your goods, and your business is open to the public, you will have to get a permit to operate from the fire department.
Air and Water Pollution Control permits: if you burn materials or discharge waste water into the sewer or waterways, you must obtain one of these permits. Environmental Protection Regulations may also demand that you get a permit for construction or before beginning operation.
Some cities and localities have sign permits that restrict the size, location, and lighting, as well as the type of sign that you can use outside your business.
Sometimes the county will require the same kind of permits that the city requires.
If you plan to sell food, as a restaurant or as a wholesaler to other retailers, you will be required to get a health department permit. This usually costs about $25 and varies depending on the size of the business and the amount and types of equipment that you have.
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