What Is the Difference Between a Business License & a Business Permit?

Some businesses require permits for environmental reasons.

Business licenses, legal documents granting the right to operate a business in the United States, are required by law. Business permits, legal documents showing compliance with the law to operate certain types of businesses, are not always required.

Considerations

Business licenses are required in order to own a business in the United States. However, permits are used to regulate certain activities taking place in the business. For instance, if the business uses chemicals that might cause environmental problems, a permit is required showing the business owner has complied with state regulations, primarily through a certification process, on how to properly dispose of chemicals.

Types

Health permits are required for food service businesses.

Agencies issuing permits are as diverse as the businesses themselves and vary from state to state. If the business deals with food or beverage, a health department permit is required. For pest control businesses, permits are required showing certification proving the owner's ability to properly use, store and dispose of pesticides.

Regulatory Information

The Small Business Administration contains all licensing and permitting information needed for owning a small business in the United States. In addition, it includes links to state regulatory agencies for small business ownership and many other helpful links (see Resources).

References

• Entrepreneur: Encyclopedia: Business Licenses
• Entrepreneur: Encyclopedia: Business Permits

Resources

• Small Business Administration: Getting Licenses and Permits