Why Obtain a Business Licensing

Jun 1
06:58

2013

Kody Carling

Kody Carling

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One of the most exciting experiences of life can be starting a business. It can also be a headache if you do not follow the proper way of obtaining a business license. This article will walk you through everything you need to know about the law and starting a new business.

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Are you thinking of starting a new business?  Starting up a business can be extremely exciting!  However,Why Obtain a Business Licensing Articles it is easy to get caught up in all of that excitement and start forgetting about important things.  Many excited, new business owners tend to ignore the need for licenses and permits.  However, licenses and permits are very important, in fact, they are mandatory, so before you can legally begin to operate your business, you need to have all of your licenses and permits in place.  Not to mention the need to register with the taxing authorities is you will have employees or will be selling taxable goods or services.

You might be wondering why you even need a license in the first place.  The three main purposes of obtaining a license are: first, to identify your business and make sure you are accountable for your actions, second, to protect the public health and safety, and third, to keep track of your finances for tax purposes.  These are three very important components to a successful business and should be taken seriously by all business owners.    

In order to obtain your business license, permits, and tax registrations you need to look to the government.  They are issued and administered by all levels of government, federal, state, and local, which includes county and municipal governments.  In a lot of cases you may need to obtain licenses on each government level.  There are various agencies and departments involved in the licensing process.  In fact, there are over 40,000 separate licensing jurisdictions in the United States alone.  Each of them has their own licensing requirements. 

Many common licenses, permits, and tax registrations that you may need for your business include:  a business license, zoning permit, building permit, home occupation permit, sales tax license, health department permit, fire and police department permit, and sellers permit.  At this point you may be wondering which licenses you need for your business.  This is a very common question asked by almost every new entrepreneur.  Contacting your local city hall is a good start, but that won’t always help you determine your exact licensing requirements on the county and state level.  It is important to contact both your county and state as well, to make sure you are getting exactly what you need.   

If you are not compliant with all the licenses, permits, and tax registrations that your business needs, there are many consequences you will have to face including:  you cannot open your new location, you will be unprotected legally, your business will be jeopardized, your location may be padlocked, and you may be hit with costly penalties and interest, or even personal liens in some cases.  So as you can tell, doing your research, calling your government agencies, and obtaining your business licensing  is crucial to the success of your new business.   

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