What Kind of Licenses Do I Need to Open a Business?


You must obtain several licenses before opening a new business. The exact licenses depend upon the type of business and if it is regulated by a certain agency or level of government. The physical location of the business makes a difference as to the specific kind of license you will need, as does if you plan to hire employees.

Operating Licenses

If your business is physically located inside the city limits, you will need to apply for a business permit from both the city government and county government. If it is located outside the city limits, you'll only need a county license. Most jurisdictions only charge about $25 for these licenses but are quite picky that you don't overlook the necessity of obtaining one. It makes a difference on how much of the sales tax collected by the state will be funneled back into the local community.

Tax Licenses

You need two types of tax licenses to open a business, one from the state you live in and one from the federal government. From the state, you receive a tax identification number to use when you file your quarterly tax reports. Unlike income tax, sales tax is expected to be paid to the state on a quarterly basis. The other tax license you need is called an Employer Identification Number and only applies if you plan to hire workers. Otherwise, only highly regulated businesses like investment advisers or interstate trucking companies need apply for an actual federal business license.


Professionals like doctors and lawyers or tradesmen like electricians or plumbers must complete a separate licensing process in addition to the business and tax licenses listed so far. Each state government maintains a professional licensing board that ensures all professionals and tradesmen operating within the state are properly credentialed, which is to say are in good standing with their private oversight body. For example, an attorney must prove to the state he is in good standing with the Missouri Bar Association and has passed the appropriate exam to practice law in the state.

Health Inspection

A new business planning to serve any sort of raw or prepared food must pass an inspection by the county health department. This would apply to restaurants, food wagons, and meat or seafood markets. The operating assumption is that food servers needs to maintain an even higher standard of cleanliness. If you suspect your business falls into this category, contact your local health department to find out which additional standards you must meet and to schedule an inspection.

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