Getting a New Business License or Permit for a New Business
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It's the law
Most city, state, and county laws require business owners to operate their establishments with certain licenses and permits. Many businesses often require more than one license and permit to legally operate, a process that can be expensive, time-consuming, and frustrating to deal with. Although it may seem like a tedious process, it is important a business owner abide by the law and obtain the necessary certification to operate their business. Going forth with operations without the security of legal documentation is considered illegal, and it puts the business owner at risk for permanent closure, heavy penalties and interest, personal liens, IRS troubles, lawsuits, etc., if they are found in non-compliance.

For new and established businesses
Business licenses are not limited to new business owners. Companies already established need to file renewal applications after a certain period of time. This ensures the business is a genuine company operating under local, state, and federal guidelines. Companies that change their contact information, corporate structure, move to a new location, put up a business sign, or expand their business to an additional location must also apply for new licenses and permits. In some states, a business license can be transferred to a company’s new location if they write a request or appear in person.

Different licenses and permits
Some of the common certifications that new business owners need to obtain include a business license (local, state, or federal), a fire department permit, an air and water pollution control permit, a sign permit, a county permit, a sales tax license, and a health department permit. Through the consultation of an experienced attorney, a new business owner can easily determine which of the licenses and permits apply to their business. The attorney can even complete the entire application process for them. In addition, local, state, and federal offices can provide the business owner with an abundance of resources, including the application materials and fees needed to apply for licensure. Due to all the charges that may accumulate from the entire licensure process, it is crucial business owners include licensure and permit expenses as part of their startup costs.

The importance of DBA (Doing Business As… or Fictitious business name)
Many states require business owners to register their DBA (or fictitious name) for their business before they obtain any licensure, especially if their company is a sole proprietor or general partnership. A DBA stands for Doing Business As and is a designated name of the company other than that of the owners. With a DBA, a company’s name of choice will be completely protected by law, provided that other businesses within the same state of operations have not chosen that company name. In addition, companies with DBA’s can open and maintain bank accounts as well as process financial transactions under their company’s name.

Your DBA and the local paper
The DBA process differs from state to state. Some business owners could just easily register their DBA or fictitious name at their county office and pay a fee. Other states, including California, require business owners to contact their local newspapers to help assist with the DBA process. By making a news paper announcement with their fictitious name (chosen company name), they are merely informing the public of the business owner’s intent to operate their business under the chosen name. In addition, this public announcement protects the public from fraud since the business owner registers his/her name with the county offices. Local newspapers can publish this statement and file a company’s DBA request. There is a required fee that must be paid to the newspaper, and the posting may need to be placed for a certain amount of time to take effect.

Once a company’s DBA is registered, business owners can then apply for various licenses and permits.

Local licensure (basic business operation license)
A local business license is one of several different licenses that allows the business owner to legally conduct business operations. This license basically acknowledges that a particular business is operating within city and county zoning compliances. If a business does not comply within city limits, then a county business license can be issued. Local licensure can also apply to many home-based businesses and establishments considering building/property renovations and upgrades.

To obtain a local business license, the business owner must go to their City Hall, courthouse, or county government offices to obtain information and proper application materials. The business owner will also be asked to submit a fee with the application.

State licensure (special state-issued license or occupational/professional license)
Some businesses and professions need a state license for operation since the products and services they offer are heavily regulated by state law. For example, physicians, realtors, lawyers, etc. are all professions that require specialized training and certification. They all need a state license to conduct business in order to make sure they comply with state-specific standards and regulations.

State licenses are crucial for any new business. Before issuing any new business licenses, some states may require the owner to get licensing for their staff: auto mechanics, plumbers, electricians, building contractors, collection agents, insurance agents, real estate brokers, and repossessors. In addition, businesses that sell liquor, firearms, and lottery tickets also need state approval and licensure.

Since each state has different applications and regulations, the business owner must go to their local government office to find out about any requirements and application materials. As with any license, a fee is requested to process the application and obtain licensure.

Sales tax license
In addition to state licensure, most retail businesses require a sales tax license (seller’s permit), which grants permission to charge customers a state sales tax when they purchase products. This collected amount differs with each state and will be collected by the state. This license also applies to businesses selling products exempt from sales tax. All businesses that fall within this category are encouraged to contact the State Franchise Tax Board, the Board of Equalization, or the Franchise Tax Board for further information and requirements.

Federal licensure
Other businesses are regulated by government law and require a federal business license to operate. Businesses that encompass television and radio broadcasting, metal processing, drug manufacturing, and meat preparation must all fall within federal guidelines. In addition, interstate shipping companies and investment firms require clearance from federal licenses.

To obtain a federal business license, certain government agencies should be contacted. For example, business owners of a meat packing or drug manufacturing company should contact the U.S. Food and Drug Administration (FDA). Businesses that offer investment advising should contact the Securities and Exchange Commission (SEC). Businesses that involve interstate freight should contact the U.S. Department of Transportation (DOT) for their federal requirements and license.

In addition to the different licenses needed, most companies also require permits for the daily operations of their businesses. Here are some of the most common permits:

Health department permit
Any business that deals with food (restaurants, wholesale manufacturers, vending machines, etc.), housing (apartments, condominiums, town houses, etc.), community structures (public swimming pools, shelters, camps, etc.), water and septic systems (small water systems, liquid waste haulers, etc.), and medical waste products (hospitals, clinics, tattoo parlors, etc.) all need a health permit to operate. In addition, any establishment, within these fields, intent on rebuilding should also have an updated health permit to conduct business.

Fire department permit
A fire department permit is one of the most important licenses new business owners need to obtain. To acquire this permit, a company must pass inspection for any potential hazards that may pose a threat to employees, customers, and neighboring buildings. This permit also approves the storing, use, maintenance, and handling of materials within company premises and the requirement to install necessary protective equipment to prevent fire hazards. Depending on the location and city of the business, many owners will not be entitled to apply for other business licenses or to set up their operations until a fire permit is approved. Some cities may not even require permits, but will periodically inspect these businesses to see if they meet fire safety regulations.

Air and water pollution control permit
Another crucial permit for every new business is the air and water pollution control permit. This permit ensures the company in operation is not discharging polluted water or air. New businesses applying for this permit need to contact their state environmental agencies for more information.

Business sign permit
Depending on the city location of the business, a sign permit may be required. This permit works in accordance with zoning regulations and may restrict the size, location, and type of sign that is posted on the building’s exterior. Sign permits also need to be obtained for any temporary real estate and construction signs or permanent identification signs for schools, churches, apartment buildings, etc. Individuals who seek a business sign permit are encouraged to contact their county’s Planning and Zoning Department for further details.

Every new business owner should take the time out to conduct research on the different licenses their company needs for daily business operations. If they move forward with their business operations and decide not to obtain the required licensures and permits for their establishments, their company is at a high risk for permanent shut down. In addition, if one or more of their licenses are not approved, their business is still considered in non-compliance with county, local, state, and federal law, and this is a criminal misdemeanor. Not only are they at risk for possible jail time but they are also subjected to hefty fines, liens, lawsuits, etc. Before setting up a new business, owners need to invest time and money in making sure their business establishment complies with all local, state, and federal ordinances.

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