Do you own an LLC? Do you know what business license do you need for your LLC? Every company needs a general business license to operate in its location. In addition to this, you may need a federal business license and state licenses and permits depending on the nature and location of your business.
TYPES OF BUSINESS LICENSE FOR LLC
Figuring out what business license you need for your LLC can be a tricky process. It is not a straightforward procedure. But don’t worry, we’ll walk you through the steps you need to take. What type of business license do you need for your LLC?
Getting the right business license for your LLC is critical. If you are operating a business without a required license or permit you run the risk of non-compliance. Then you will find yourself on the wrong side of governing authorities. This is not a position you want to get into.
So, what types of business license are there? To make things simple, business licenses can be broken down into two broad categories – General Business Licenses and Industry Business Licenses.
A general business license is a license that is required by all businesses to operate in a given area. These licenses are issued at a local level – either by a city or county authority. A small number of states in the US issue general licenses at a state level.
Industry specific business licenses are issued to allow a business to operate in a specific sector. They are used to track and control businesses operating within that trade. For example, if you own a cafe and sell food you will need a food safety license. This license is specific to the food sector.
There are two types of industry specific licenses – Federal License and State License or Permit, see below.
LLC BUSINESS LICENSE GUIDE
• DIFFERENT TYPES OF BUSINESS LICENSES LLC
• HOW DO YOU KNOW WHAT LICENSES YOU NEED?
• DOES YOUR LLC NEED A BUSINESS LICENSE?
• WHAT HAPPENS IF YOU DON’T HAVE A LICENSE?
• HOW TO OBTAIN A BUSINESS LICENSE
DIFFERENT TYPES OF BUSINESS LICENSES LLC
First up you need to know that business licenses are a requirement regardless of the business structure of a company. So, they don’t just apply to LLC companies. Business licenses are also a requirement for sole proprietorships, general partnerships, corporations, and all other business structures.
The concept of a general business license is straightforward. All businesses need this license to conduct business in a location. However, what about industry specific licenses? What licenses fall into this category. Let’s take a look.
FEDERAL LICENSES
If your business operates in a sector regulated by a federal authority you will have to apply for a federal business license. The industries regulated by federal authorities in the US are:
- Agriculture
- Alcoholic Beverages
- Aviation
- Firearms, Ammunition, & Explosives
- Fish & Wildlife
- Commercial Fisheries
- Maritime Transportation
- Mining & Drilling
- Nuclear Energy
- Radio & Television Broadcasting
- Transportation & Logistics
STATE LICENSES & PERMITS
The state licenses and permits your LLC requires will depend on the nature of your business and your location. The requirements for state business licenses vary from one state to the next. So, you will need to contact your local authority to determine what licenses and permits you require.
State authorities regulate a broader range of activities compared to the federal list above. For example, common business activities such as retail, restaurants, and farming require state licenses in most locations.
The best way to find out what license applies to your company you should begin by visiting your state authority website. You will need to do some research based on your location and the nature of your business.
HOW DO YOU KNOW WHAT DIFFERENT TYPES OF BUSINESS LICENSES YOU NEED?
What business licenses does your LLC need? This is a tricky one. And there is no simple one size fits all answer. The requirements for business licenses vary from state to state. So, you will have to do some research.
If your business falls into one of the sectors regulated at a federal level – then you will have to contact the federal authorities to determine if you need a license and how to apply. When it comes to state licenses the process is a little more complicated and will require some digging.
We recommend you contact your state authority to determine exactly what license and permit your business needs. It’s critical you follow the correct procedures and hold the required business licenses to avoid falling victim to any penalties.
DOES MY LLC NEED A BUSINESS LICENSE?
Almost certainly yes. You can assume you will need a general business license to operate as a business in your physical location. This will be issued by your local city, county, or state authority. So, you need to contact them for details on what you need and how to apply.
Then you have your industry specific licenses. If you operate a business in a sector regulated by the federal government – as listed above – you need to contact them to determine if you need a license and how to apply.
Then you have your state license and permits. The only way you can be sure you have the correct licenses at state level is to contact your state authority. You will need to reach out to the license and permit issuing department to discuss your license and permit requirements.
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WHAT HAPPENS IF I DON’T HAVE A LICENSE?
What will happen if you are missing a license or permit? Well, the most common penalty for failure to hold a required business license is an official notice and a fine. Fines range in size depending on the license type and nature of the business.
More extreme penalties include forced closure and even dissolution. Dissolution refers to the liquidation of a company whereby its affairs are tidied up and assets distributed. If you want to protect your company, make sure you hold all licenses required to operate in your area and industry.
HOW TO OBTAIN A BUSINESS LICENSE
How do you apply for a business license? Now we know about the business license for LLC requirements we need to figure out how to apply for a business license.
APPLYING FOR A FEDERAL BUSINESS LICENSE
To apply for a federal business license you need to contact the federal authority that oversees the industry you operate in. See below for a list of federal authorities and the sectors they govern.
Once you have identified your federal authority, reach out to them to determine how to apply for a federal business license. See below for a list of federal authorities and the industries they regulate.
APPLYING FOR A STATE BUSINESS LICENSE OR PERMIT
The procedure involved in applying for a state business license or permit will vary depending on the state your business is located in. To find out how to apply you need to contact your local state authority and discuss the application process with them.
WHAT TYPES OF BUSINESS LICENSES ARE THERE FAQ
WHAT IS THE MOST COMMON BUSINESS LICENSE?
The most common type of business license is a general business license. Every business needs one of these to operate in a specific location. General business licenses are issued by local and state authorities.
DO I NEED A BUSINESS LICENSE IF I HAVE AN LLC?
Yes, if you have an LLC you need a business license. All businesses need a general business license to operate in a specific location. Depending on the nature and location of your business you may also need to hold a federal and or state business license or permit.
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About the Author
Erik Chambers: Senior Editor
Erik is a 30-year industry veteran with a wealth of experience in cross-functional areas ranging from business consulting to business education. He has worked in the private sector where he has advised start-up enterprises on early formation, capital acquisition, and tax issues.
While he specializes in business formation he has also held roles in several academic institutions where he teaches organizational decision-making, business strategy, and operations management. Erik is a graduate of the McCombs School of Business at the University of Texas at Austin.
i think all businesses need a general license to operate in a state. that means LLC will need one too. you should contact your local authority to find out.
All businesses need a business license to run a business. At the least you are going to need a General Business License to be compliant.
Do you need a federal business license for a delivery company LLC?
What kind of business license does an LLC printing company need? We are based in rhode island and make printed t shirts and personalised gifts.
Thanks
🙂