Do I Need a City Business License to Start an Online Retail Shop?


All businesses, including those on the Internet, must have a local business license to operate legally, according to the Small Business Administration. The licenses needed for a retail shop depend heavily on the services or goods the online retail store sells. A business needs to have an "assumed name certificate" or a "doing business as" license. Local and federal governments determine what licenses are needed based on the nature of the online shop.

Local License houses an online clearinghouse linking to government agencies designed to assist with finding the correct licensing and permits needed on the local, state, and federal levels. Basically, opening an online retail store requires the same licenses as a brick and mortar shop. The clearinghouse can also provide information on other registration requirements for the company depending on the types of goods or services the retail establishment sells.

Alcohol & Tobacco

If you plan to sell any alcohol or tobacco products online, the law requires the business to register and maintain special records with, and pay special taxes to, the Alcohol Tobacco Tax and Trade Bureau, or TTB. An online retailer selling cigarettes or alcohol has to apply for an operations permit from the TTB. Companies cannot legally operate without written approval from the bureau.


The Federal Trade Commission is the federal agency that regulates e-commerce activities. The rules and regulations for conducting business online apply to anyone selling goods and services online and to other enterprises that perform transactions with consumers by collecting customer information. An online version of the FTC rules, regulations and guides can be found on the Bureau of Consumer Protection Business Center's website.

Maintaining Licensing

Keep track of all expiration dates for licenses and permits and renew them on time. Create a color-coded filing system. Choose a different color for each month. File licenses in the monthly folder the license is to be renewed. Create a "To Do" or "Urgent" red folder. Locate the red folder in front of the monthly folders. Thirty to 60 days before the license expires, file the renewal reminder in the "Urgent" folder. Toss or shred the old license when you receive the new one. Ensure no additional licensing is required before expanding your online retail shop.

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