Local Business Licenses: Requirements, Permits, and Compliance

If you are considering starting a business, one of the most important (and potentially confusing) steps you will take is complying with local licensing and permit requirements for starting and running your business. Local licensing and permit requirements vary widely depending on your city or county, and the type of business you will be operating. You’ll be dealing with everything from tax registration to occupational licenses and unemployment insurance.

The following are examples of some of these requirements, with the type of business activity to which they might apply identified in parentheses. For more information, visit FindLaw’s Business License and Permits section.

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Types of Permits

• Business permits (basic permit to operate a business within city / county limits);

• Zoning and land use permits (business signage, home-based businesses, customer parking);

• Building permits (construction of a new building, renovation of an existing building, installation of a new electrical system);

• Seller’s permits (selling or leasing goods from a fixed location such as a shop or cafe, i.e. not via the Internet);

• Health permits (restaurants and other food preparation / sales businesses);

• Fire marshal / department permits and certificates (customer occupancy limits, emergency exit access).

In addition to local licensing and permit requirements, your business will also need to comply with all applicable state and federal licensing and permit requirements.

Compliance with Local Business Laws and Regulations: Getting Started

Depending on the city where you do business, you may be able to get all the licensing and permit information you need in one place, such as a city or county clerk’s office. In smaller cities and towns, you may need to contact individual agencies or offices separately.

Following is a list of local (city, county, town) officials, offices, and organizations you may wish to contact to discuss your licensing and permit responsibilities in connection with starting a new business:

• Planning / Development / Zoning Department;

• Building / Building Inspection;

• Assessor / Controller / Tax Collector;

• Fire Marshal / Department;

• Department of Public Health;

• Chamber of Commerce;

• Small Business Commission;

• Local Trade Associations.

Make sure to include your legal business name (the name when you registered your business entity with the Secretary of State). If you are a sole proprietorship, you register your name or if you have a DBA (doing business as) name, you include that as well.

General Business Licenses

Most business licenses are done on the local level with city governments. However, a few states require general business licenses: Alabama, Alaska, Delaware, Hawaii, Nevada, and Washington. These licenses are applied for with the state agencies.

Specialized Licenses and Permits

If you are operating in a certain industry such as tobacco or firearms, there may be additional permits or federal license requirements.

Home-Based Businesses

Think your home-based bicycle repair business is exempt from local licensing or permit requirements? Think again. Before you decide to fix another flat tire, be sure you understand how to operate your business legally. Each geographical location may have different requirements. The SBA website can provide you with a good starting point to understanding the laws in your area.

In addition to complying with the local laws, always check with your homeowners’ association (HOA) to see if it has any specific requirements to running a business out of your residence. Typically the rules and regulations about home-based businesses can be found in the rules and regulations, known as covenants, conditions, and restrictions (CC&Rs).

Does your Business Need Help with Local Licenses, Permits, or Regulation Compliance?

Local licenses, permits, and regulation compliance can seem like a maze. A skilled business law attorney can help you in many ways, from dealing with town officials to helping you understand your responsibilities. Contact a local attorney today to learn about your options.