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What Licenses and Permits Could Your Business Need
And This is How YOU Can Take Advantage
Starting your own business and becoming your own boss can be very thrilling. You get to decide your working hours and you get to work at your convenience. More, you are on the path to a stream of unlimited income. Does it get better than that? However, the early starting years of a business are not very easy. They are the period you have to get registration done with governments and unions, get licenses to operate, and obtain permits for some other things. This can be stressful as they can be much and demanding. However, to avoid potential legal issues which can even lead to total shutting down of the business, you have to be compliant with all rules and regulations given by the government.
How to get through the registration and the obtaining of permits and licenses with less hassle will be discussed below.
Knowing which one you need, however, can be a little tricky.
When you are starting up, you must know your jurisdiction. Your jurisdiction is where your business is situated. Here, there are laws and regulations which provide for the ones you are entitled to register and pay for. Every state has its different laws as regards the operation of business. However, the type of business you operate matters. For some businesses, you don’t need permit, while for others, it is necessary. However, you are in luck as you are in the 21stcentury where every state in the Federation has a website where the licenses and permit are listed according to the type of business. If you still feel uncertain, you can get a lawyer to walk you through the process.
Why do businesses need licenses and permit?
The answer is in a word “tax”. Government has got to get revenue from businesses to keep running affairs of the state. When a business registers to get a permit or a license, it is entered into a tax database where it can be taxed every month. Business may find loopholes in the law not to pay taxes but once they edge towards tax evasion, they should expect governmental sanctions.
Also, businesses need licenses and permit to operate so that contrabands or regulated items would be in check. For instance, if businesses don’t need permits and licenses to operate, the sale of hard drugs may go exponentially on the increase as there is no regulatory mechanism.
You should visit SBA.gov
This website offers links to licenses and permits pages of every state in the United States. This is why I mentioned earlier that you are very lucky. You don’t have to go through dusty pages of state enactments to know which law is there for you. This website gives you direct access to where you need to get the requisite information about the licenses and the permits you are to pay for.
It is important to note that licenses are renewed as prescribed by law. It could be monthly, quarterly, or annually. Whichever way, compliance with the law is very important.
An important link is https://www.sba.gov/content/what-state-licenses-and-permits-does-your-business-need
What about Tax permits?
Known generally as a sellers’ permit is the permit issued by the state government that enables you to operate a wholesale or retail business and collect sales tax on behalf of the government. You have to register for it through the state’s website or at a government office. You will need to provide essential information about your business, including bank details and estimated sales. If it is the case that you bought the business from a previous owner, you will have to provide the previous owner’s name and seller permit’s number. This is essentially to ensure that you don’t inherit debt owed by the previous owner. It has been advised that you request a tax clearance from the government before you buy a business.
It could be the case that the IRS doesn’t license your business. It is required, however, that certain business register to receive a federal tax identification number you will need to register to state and local government agencies for permits.
Do You Run a Home-Based Business? You Need a Home Occupation Permit
It is said that it is the IRS that will determine if what you are doing is a business or a hobby. However, if you are a business with a motive at making profit but home-based, you will need a home occupation permit. If a permit is not required in your city, the zoning authority can tell you if the type of business is allowed in your neighborhood. This will decide if you have to file for a variance or conditional-use permit.
Managing and Maintaining Your License or Permit
You have to keep track of all renewal dates. Government is keeping track and will come for you if you fail to renew your license. To avoid legal issues that can be detrimental to your business, know the dates for renewal and save up for it. It is bad business PR to be issued a public warning over default.
You have to maintain a copy of all licensing applications and forms. This is to protect you from any mistakes or oversight that can occur in the future. Always request a copy for your safekeeping.
So that you can be free from hassling and unnecessary embarrassment, you need to clearly and correctly display your licenses and permits. It must reflect accurately that you are in compliance to the last month.
If you expand your business, you may need additional business licenses. This is just logical. You can always expand but let it be with full compliance. Get registered. It is the sustainable way.
In conclusion, the United States Government does not joke with taxes. Thus, you must be seen to be in full compliance. Be sure to get the right permits and licenses and renew them as expected by the law. Ensure that you get a tax clearance before you buy a business so that you won’t inherit debts.
The Association of Gift Boutique Retailers of America is here for all of your gift boutique industry needs. Hopefully you have found value within this article on What Licenses and Permits Could Your Business Need. We are interested in what you would like to learn more about, please let us know in the comments below.