A business license is mandatory for all types of businesses. If one doesn’t have this permit, the government agencies have full rights to shut down his business—he will no longer be able to operate it.
What is a Business License?
It is a type of permit issued by the government of a country that allows the owners to run their businesses in the particular city or state of a country that provides it.
It is also known as an Occupational Tax Certificate. This permit indicates that a company has the government’s approval to operate.
Types of Business Permits
It’s not of only one kind, and not every business requires this license. It depends on the location of your business and its genre.
You’d have to first determine if your business is regulated under a federal agency.
If your business falls under one of the following industries, you need to have this license.
- Commercial Fisheries
- Fire Arms, Ammunition, & Explosives
- Fish & Wild Life
- Mining & Drilling
- Maritime Transportation
- Nuclear Energy
- Broadcasting of Radio & Television
How to Get a Business License
In a nutshell, just follow these four steps.
- Research for the terms and regulations in your area (state or city) in order to determine which type of business licenses you need for your business.
- Gather all the necessary documents and apply for the license.
- Receive it.
- If it expires, renew it as needed.
How Much Does It Cost?
It depends on the industry of your business and its state of operating because each governing entity sets its rates.
However, the license is affordable for all sizes of businesses—small or large. You can expect to be paying a few hundred dollars, but no more than that.
Documents You Need When Applying for Business License
The documents you need for the permit depend on the license type. However, most license asks for the following:
- A description of your business and its physical premises.
- Planned activities of your business.
- The lists of ownership and management.
- Sales tax permit.
- Copies of corporate records.
For specific industries like construction and architecture, you may also need proof of insurance, the educational qualifications of the owners, and key staff.
Why Is It Needed?
The very first reason for having a business permit is you can operate it legally. It gives your local government notice of what you are doing and ensures that you don’t do any harm to the public. This permit is also a source of revenue for your country, helping to fund libraries, schools, and other resources.