Business license requirements for small businesses

Obtaining all required business licenses is a critical step in starting your business. Most businesses will require several licenses or permits, typically issued by a state agency. Some businesses may also require a federally issued license.

These licenses and the associated fees depend on the nature of your business, its location, and regulations in your jurisdiction.

In this article, we explain the different business licenses and permits a small business may need and best practices for staying compliant with rules and regulations.

Understanding business licenses

Determining what type of license you will need to legally operate can be challenging, especially since these can be issued by multiple authorities — federal, state, and local government.

Let’s look at the typical licenses being issued:

Local government licenses

Common licenses issued by local government, such as your city or county, include:

• Business operating license or general business license
• Zoning and land use permits
• Health license and permits
• Building permits
• Environmental licenses and permits
• Signage license or permit

State government licenses

State-issued business licenses and permits are typically required for essential business functions, such as a sales license, or for tax reasons. These include:

• State business operating license
• Seller’s or sales license or permit
• Tax registrations and permits
• Occupational license
• Unemployment insurance license (required if you have employees)
• If you sell certain products, such as alcohol, firearms, and gasoline, you will require a product-specific license

Federal government licenses

If your business is regulated by a federal agency, you’ll need to obtain a federal license or permit. Some examples include:

• Drug manufacturing (issued by the Food and Drug Administration)
• Alcohol, tobacco, or firearms (issued by the Bureau of Alcohol, Tobacco, Firearms, and Explosives)
• Investment advising (issued by the Securities and Exchange Commission)
• Mining and drilling (issued by the Federal Maritime Commission)
• Transportation and logistics (issued by the U.S. Department of Transportation)
• Radio and broadcasting (issued by the Federal Communications Commission)

How long does it take to get a business license?

The time it takes to obtain a business license can vary depending on the type of business and the jurisdiction in which you operate. Some agencies issue licenses within a week; others can take several weeks or months.

CT Corporation can help you identify, obtain, and maintain the appropriate business licenses, permits, and tax registrations that your business needs. Aided by our proprietary technology, CT Corporation helps alleviate the burden of business license management.