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Starting a Business

Small Business Startup Paperwork, Licenses & Permits

There is certainly no shortage of paperwork to fill out when you’re starting a new business. Here’s a rundown of what you’ll need to follow the rule of law and stay out of trouble with Uncle Sam or your local authorities.


Local Licenses, Permits and Registrations

Most states require you to obtain a license, permit or registration for tax or public health and safety purposes. You can find this type of information on your state, county and city websites.  


Professional Licenses

There are dozens of businesses that require a professional license, from doctors, hairdressers and body piercers to appraisers, firearm dealers and limo drivers. Your state department of licensing is a good starting point.


Employer Identification Numbers

Every business needs a corporate equivalent of a Social Security Number issued by the IRS for tax purposes. Your attorney, accountant or business filing service company will make sure this is included in your Articles of Incorporation when you form your legal business entity. You can also check with your state treasury or department of revenue if you’re trying to figure this all out yourself. You should also note that you don’t need an EIN if you’re a sole proprietorship or partnership because you will simply use your SSN on all tax forms.  


State Tax Licenses

State tax licenses are required for any business selling goods or services, although the rules vary from state to state. The government mandates that you have a license so they can ensure you’re collecting sales tax on all items except prescription drugs and certain foods. Your state department of revenue will be able to help you here.


State Labor Department Registrations 

Businesses with employees must register with the state department of labor or another agency that administers worker’s compensation and unemployment insurance. You may buy these insurances through a state agency or your insurance carrier, but rules vary by state so you’ll need to check with your state department of labor.


Other Permits You May Need

In addition to your operating license and tax permits, you will likely need…

  • Zoning and land use permits (especially on any new construction)
  • Health department permits (if you’re serving food)
  • Fire department permits (if your business attracts large crowds)
  • Special state-issued licenses (for the sale of gas, liquor, lottery tickets or firearms)


Who Can Help

You can get started by looking on the Small Business Administration website under the “Search For Business Licenses & Permits” section or by contacting your attorney who specializes in local rules and regulations for businesses.



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