Getting a Business License

For some business owners, getting a business license is the first step toward starting a company.

Getting a business license is an important step in the process of starting your business. A business license makes your company legal and puts you on the radar of state and local agencies that regulate your industry and collect fees and taxes. The paperwork required to get a business license is usually fairly minimal.

Cost of Getting a Business License

The cost of getting a business license tends to be relatively small in comparison with other costs that you incur when you start a company. In Seattle, Wash., the cost of an annual business permit was $90 as of 2011; and in Oakland, Calif., the initial cost of a business license was $30 as of 2011. In addition to the cost of registering your business and applying for a business license, you will also need to pay annual or quarterly business license taxes. Rates vary according to your location.

Decisions to Make Before Getting a Business License

Before applying for a business license, you should choose a name for your company as well as a primary business activity. In addition, choose a legal structure for your company such as sole proprietorship, partnership or corporation. The decision of which business structure to use will depend on whether you plan to run your business independently or as part of a team, and whether you have personal assets that you wish to protect from potential business liability issues.

Process of Getting a Business License

The process of getting a business license involves visiting your city or state licensing office either in person or online. The application process is relatively simple; it involves providing basic information such as your name, address, business structure and primary business activity. Some locations may require you to provide bank account information, and to register as an employer if you plan to hire employees and if your city or state requires you to withhold taxes from employee paychecks. You will receive a receipt for your payment immediately, and you will receive an official copy of your business license in the mail in a few weeks.

Who Must Get a Business License?

In general, anyone doing business in a particular city must get a business license authorizing him to operate his company there, whether or not the business's home base is in that city or in another location. For example, if you own a business that is based in Seattle and you vend at a farmers' market in the neighboring town of Mercer Island as well as in Seattle markets, you must buy a Seattle business license as well as a Mercer Island license.

References

• Oakland Business Assistance Center: Get an Oakland Business License
• City of Ripon: Business License - Frequently Asked Questions
• Oregon: Licenses, Permits and Registrations