I get calls from people wanting to know about business licensing more than almost any other compliance issue.
Whether your business is set up as a sole proprietor, corporation, LLC, or partnership, you need proper business licensing.
Without the proper business licensing, you can get fined, and you can sully your reputation.
Business License Basics
If your business is an online business, a small business, a big business, a home-based business, or a business with a brick and mortar location, you need a business license.
Applying for and maintaining the proper business licensing doesn’t have to be a scary task. It’s really about knowing what kind to get and where to go to get it.
Typically, the main business licenses you need to consider are state-level licenses and local licenses.
State Level Business License
State-level business licenses are not required by all states or for all industries. You can check your individual state’s website to see if you need to apply. If you’re doing business in multiple states, check the website of each state where you’re conducting business. Some states (like Nevada) have the state-level business license associated with the Secretary of State, and some (like California) have the process going through the Department of Taxation.
Usually, if you need a state-level license, you need to have it at least in the state where your location or office is located.
Once you’ve determined whether or not you need a state-level license, you need to check out the local business license requirements.
Local Business Licenses
Most of the local business licenses will be required either through the city where you conduct business or through the county where you’re conducting business. Many of the counties and cities have websites with information on obtaining a business license. Be sure to check the jurisdiction of your business address to verify which city or county your business fits.
When you apply for and obtain a business license, the purpose is not to make sure that no one else is conducting business under the same name. It’s also not intended to make any kind of statement about the validity of the business or the people running the business. Potential customers can check you out, though, by verifying whether or not you have the proper business license, so without one, you run the risk of looking like a “fly-by-night” business.
Information You Need for Your Licenses
The most common information you need to apply for a business license is your legal business name, your business EIN (Employer ID Number assigned to you by the Internal Revenue Service), and your business contact information (including business address, phone number, and contact name). In some locales you may also need to have your state taxpayer identification number.
If your business is operating from a formal business entity, you may need to have a copy of your filed Articles and Charter, as well as a copy of your current officer-list.
What does it cost?
The fees for having a business license vary from locale to locale. Here in Las Vegas, a business can be in the City of Las Vegas, the City of Henderson, or Clark County (the un-incorporated areas of town). Each of these locales has a different fee schedule for maintaining a business license. Each of them bases the periodic fees on the type of business and the amount of gross income. Some locales have a flat fee for the business license.
Try to think of your business license fees as a regular cost of doing business, just like buying inventory or paying your phone bill. You might not see a lot of direct benefit from having your business license, but you will certainly notice if you get a huge bill for not having one!
If it’s your first time getting a business license, don’t let it scare you. Just like any other piece of paperwork you have to do in running your business, it might be a bit weird the first time, but once you’ve completed it, the next time will be easier.
And as always, if you need additional help, please do not hesitate to contact us!