Business Licenses and Permits

For one or more individuals to start a company, certain permits and licenses are required. The types of permits and licenses required is usually dependent upon where the business will be formed and what type of business it is. Before any business is started at all, the individuals who are forming it should perform research in order to determine what types of licenses they will need and what kinds of permits will be required. Here is an overview of business licenses and permits.

Where the Business Will Be Operated

This should be considered before starting the business. Most individuals who start a business in a building or specific location will need permits and licenses. Of course, the details vary depending upon what state the business is being started in – but individuals will need to check their zoning compliance laws to determine whether they need a permit. It is very important that a new business is not started or built until the necessary permits are obtained.

In cases where businesses are being built physically, zoning officials reserve the right to have the building removed if the necessary permits are not obtained. On the other hand, if an individual goes into business and works out of their home, they may also need a business license to operate.

City and State Business Licenses

Depending upon the nature of the business, the individuals may need to seek city and state business licenses. The city business license gives the business permission to operate within the jurisdiction of the city. State business licenses are required for those companies which provide products or services governed by state laws.

For instance, doctors, lawyers, real estate agents and other businesses would most likely be required to obtain state business licenses. It's important to check and see which business licenses or permits are required both by the city and state. Some businesses require federal licenses, including those that are regulated by the federal government.


Permits are required in order to ensure that the business is following specific ordinances regarding safety and appearance within the city or state. For instance, restaurants and other places dealing with food and drinks would be required to have a health permit. Individuals who purchase items at wholesale price and resell them for profit are required to have a seller's or re-seller's permit.

Any business that plans to build a physical building for their company will most likely be required to have a building permit within the state or city they are building in. Similarly, there are certain zones within cities and towns which govern where commercial, residential and industrial businesses can be. It's important to be sure your location is properly zoned for your business and you may need a zoning permit. Individuals working out of their homes may need permits for that as well.

By obtaining the proper licenses and permits, a company can be assured that they are operating within the parameters of the law and that they are considered legal and valid by city, state and (if needed)federal laws.

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