How to Get a Business License, Step by Step
There is no one business license. What you need depends on what you do and where. Here is how to find out, and how to get it.
How do you get a business license? There is no single answer. What you need depends on what your business does and where it works. Most small businesses need a mix of licenses and permits from federal and state agencies, plus some from the county or city. This guide walks you through finding yours.
What a business license is
A business license is permission from a government to run your business. It differs from a registration, like forming an LLC with the state. The SBA's guide says license and permit requirements and fees depend on your business activity and the issuing agency.
Step 1: Identify your activity and location
Start by writing down what your business does and where it does it. A home bakery has different rules than a bakery with a storefront. The same shop in two cities can face different rules too. What you do and where you do it shape every rule that comes next.
Step 2: Check federal requirements
Does a federal agency watch your work? If so, you need a federal license or permit. The SBA's guide says most small businesses need a combination of licenses and permits from both federal and state agencies.
Step 3: Check state requirements
States watch over more kinds of work than the federal government does. Your Secretary of State's website lists which permits and licenses you need. Some states also want other filings, like Colorado's Periodic Report.
Step 4: Check county and city requirements
Your county and city add their own rules. Check both, since each can require its own. Fees vary by what you do and who issues the license.
Step 5: Apply, pay, and track dates
Apply with the agency that issues each license. What you pay depends on your work and who issues the license. Some licenses and permits expire after a set time. Write down each end date the day you get approved.
How a license fits with your EIN and bank account
Get your federal EIN first. You can open a business bank account once you have it. Banks often ask for your formation papers, ownership agreements, and business license. Get the license first, then go to the bank. Kentucky, for example, lists its LLC fees on one page if you are still forming.
Common questions
Can I run a business without a license? Not if your activity or location requires one. Get licensed before you open.
How long does it take? It varies by agency.
Who issues business licenses? Federal agencies, states, counties, and cities. Each one issues its own. Each handles its own.
Next steps
List your activities and locations. Check federal, state, county, and city rules in that order. Apply, pay, and write down every end date before you open.