When you’re embroiled in the excitement of starting a new business, it’s easy to ignore the need for licenses and permits. Sure, getting licenses and permits is about as fun as visiting the dentist, however failing to do so – and doing it right from the start – is one of the most common mistakes new entrepreneurs make.
Following are some of the most common licenses and permits homebased small-business owners may need and where to go for more information.
Business License
Contact your city’s business license department to find out about getting a business license, which fundamentally grants you the right (after you pay a fee, of course) to operate a business in that city. When you file your license application, the city planning or zoning department will check to make sure your area is zoned for the purpose you want to use it for and that there are enough parking spaces to meet the codes.
Because you’re planning to start a business in your home, you should investigate zoning ordinances especially carefully. Residential neighbourhoods tend to have strict zoning regulations preventing business use of the home. Even so, it’s possible to get a variance or conditional-use permit; and in many areas, attitudes toward homebased businesses are becoming more supportive, making it easier to obtain a variance.
Certificate Of Authority
There are two reasons you need a certificate of resale. First, any homebased business selling taxable goods and services must pay sales taxes on what it sells. The definition of a taxable service varies from state to state. Depending on individual state rulings, both the parts and labour portions of your bill may be taxable.
It’s important to know the rules in the states and localities where you operate your business because if you’re a retailer, you must collect state sales tax on each sale you make.
Before you open your doors, be sure to register to collect sales tax by applying for each separate place of business you have in the state. A license or permit is important because in some states it’s a criminal offense to undertake sales without one.
You may need one, if not several, business licenses for your start-up, depending on your industry’s operational requirements. Get advice from government industry’s governing your type of business