A small business license is a legal document that allows your company to do certain things. These include doing business in the state, hiring employees, and deducting expenses for tax purposes.
Depending on what type of license you need, it can be difficult or time-consuming to get the proper paperwork filed with the state government. Fortunately, this post has everything you need to know about getting your small business licensed, so you don’t have to worry about fines or other penalties down the road.
What is a small business license?
A small business license is a document that allows the holder to operate within their city, state, or country. This type of license varies depending on where you live and what kind of company you run.
Every business needs some documentation to function legally. This can be anything from an LLC (limited liability corporation) certificate if it’s registered as such, up through tax permits for places like retail stores. Getting your small business license is key because without it you don’t have any verification that your company exists at all.
There are several types of licenses available for different activities conducted by companies throughout their lifetime. Some common ones are A sales tax permit, which may be needed if any product sold online will be shipped into another state; An unemployment tax license if you have employees; A business registration certificate. This document is used to apply for state and local licenses that your company may need throughout its lifetime.
What happens if I don’t get the proper licensing?
When it comes to not getting a small business license, there can be some serious consequences down the road for those who fail to follow the law. Many states make noncompliance with their rules regarding licenses as misdemeanors or felonies depending on what type of violation has occurred. The size of fines varies from industry to industry but can range anywhere from $500 up to thousands. For example: If you’re running an online retail store in New Jersey without a sales tax permit, you could face a fine of up to $50,000.
Some states will shut down your company if you’re caught working without the proper licensing documents. This is true in places like California, where their Franchise Tax Board can literally close down a business for not having what they need to operate properly. Any tax debt owed by the owner of an unlicensed company could lead to them being sued or held criminally liable, so it’s important to take note of every requirement needed before starting any new venture.
What are the steps I should follow?
First and foremost, determine which license(s) your business needs. There may be more than one type depending on how many employees you have, what kind of products/services you offer etc.
Next, set a schedule for getting the proper paperwork filed with your state government. The order in which you do so may depend on what type of license it is, but the most important thing to remember is that each one needs to be done before any activity occurs.
Finally, don’t forget about keeping copies of everything relevant just in case there are issues down the road. This includes all documentation related to licenses and tax receipts and other information needed by law enforcement or business partners/clients if required.
With these three steps, following how to get a business license will become much easier than expected. In fact, once you’ve completed this process for your company’s first license, applying for future ones becomes extremely simple because all the groundwork has already been laid.
How much does a business license cost?
The cost of a license varies from industry to industry and state by state. For an LLC registration certificate, your company will need at least $100-200 to file the proper paperwork. This includes things like paying for the filing process itself and any legal assistance or other fees that may be needed on top of it.
Another common type is sales tax permits required if you’re running an online retail business where products are being shipped into another location (such as across state lines). Depending on how many states you ship into, this could cost hundreds or thousands of dollars per year depending on what kind of volume you do. You can usually get around needing one with digital, but even then, there might still be some states that will make you pay for one anyway.
Licenses like this that are tied to your business’s sales and revenue tend to be the most expensive ones out there. Fortunately, once you’ve paid them off, it’s simply a matter of renewing every year or so, depending on what state laws require of your company. This makes it much easier to factor in large sums at once when trying to get everything set up initially.
