Why Have a Business License?
A business license is necessary if you wish to legally run a business in the United States or work as an independent contractor in government-regulated fields. How many separate licenses and certifications your business is required to carry ultimately depends on your type of business, what products are sold and what services are offered.
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State and Local Requirements
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Nearly all local and state governments in the United States require a county or city license to legally operate a business. This is a general business license that is usually obtained by paying a small fee and registering the name of the business along with your employer identification number with a local or state business office. This license often requires annual renewal, so check the local and state rules where your business is located to ensure you maintain proper licensure. Without this general business license, you may be conducting business operations illegally.
Profession-Specific License
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Certain professions may require specific business licenses in order to legally conduct business within a state. According to the My Own Business Inc. website, professions such as accounting, bill collecting, real estate, construction and even barbering require a state business license to operate legally. State licensure usually requires registering your business with the state department of business or professional regulation and providing evidence that your employees are properly licensed or certified in the profession. A profession specific business license may also be required to secure state government contracts in fields including construction.
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Selling Specific Products
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A business license maybe necessary if your company wishes to sell restricted products, such as alcohol, tobacco products, explosives or gasoline. This business license is different from the general license required to simply operate a business within a county or state because it enables the business to sell products that are state-regulated. Without this special license, you may not legally purchase these items or make them available for sell in your establishment. Doing so could be a significant violation of the law.
Federal License Requirements
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To sell products regulated by the federal government, including firearms and pharmaceuticals, a federal business license is necessary. A federal license to do business is granted by the specific government department having jurisdiction over the product for sale. For example, a license to sell firearms is issued by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Selling any products regulated by the federal government without the proper license is a violation of federal law.
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