Up-and-coming entrepreneurs usually have a lot on their plate before successfully launching their venture. Perhaps the most pressing and urgent task in starting a business is applying for a business license. After all, staying compliant with government business laws is the first step to getting your business off the ground.
No matter the nature and size of your business, you need to apply for a business license to run your company in your city or state. However, every place and region comes with its respective processes and application requirements. Fortunately, you can take advantage of business specialists like Swyft Filings and other service providers who can assist you in opening your business with confidence. You can secure all the paperwork with ease.
Here are what you need to expect when getting a business license:
- Decide The Legal Structure Of Your Business
A business license is a permit given by the assigned government agency that authorizes you to operate your business in its geographical jurisdiction. However, before filing for this crucial document, it’s imperative to decide on your business legal structure first since it will determine and impact what additional documents or requirements are necessary to support your business license application.
Before you apply for a business license, you should have a business structure and a business name in place. Having these two things finalized means you don’t need to modify changes for your business license later. Since you probably have decided on a business name already, it’s time to get familiar with the different business structures that your business will fall under:
- Sole Ownership
If you don’t have any other partners in your venture, you can register your business under sole ownership. This means you accept full responsibility for your business, including tax filing and others. Business income is reported on tax returns as self-employment income, and sole proprietors are fully responsible for business debts and obligations. Simply put, the business and its owner are not separate, unlike other business structures. Special forms exist for sole ownership businesses when registering for a business license.
- Partnership
Like sole ownership, partnerships also treat the owners as personally obligated for legal liabilities and assets. These are legal arrangements between a business operated by two or more partners who have settled into an agreement regarding business flows and operations. You have to include all partners’ names when filling out the business license form.
- Corporation
A corporation is another business structure that is operated by delegated job roles. Shareholders form it, and stocks are usually sold depending on the market. Unlike sole proprietorships and partnerships, corporation owners don’t have to mix their personal assets and liabilities with their business. Corporations can continue attracting outside investors since they tend to have a more fixed operating structure.
- Limited Liability Company
This type of business structure also protects individuals from using their assets in being used as legal claims for the business. Liabilities are treated in similar ways as a corporation. However, the perk of applying for an LLC is that the paperwork and requirements are much easier and faster than a corporation.
- Research The Business License Requirements You Need To Collate
Once you have chosen the business structure, you need to inquire from your city or state about the business license requirements. Check your industry type, the nature of your business, and its local, national, and state laws. Companies require different types of licenses based on their type.
Some of the agencies that you can approach and inquire from are the Department of Revenue, the Department of Small Business Administration, and so on. Aside from emailing and calling them directly, you can check their website or send them direct messages on social accounts. Before tackling this step, it’s also wise to consult with a business specialist or your business lawyer so you’ll know the appropriate questions to ask.
- Prepare All Necessary Documents
If you are applying for a license, make sure you read each application carefully to identify the documents you need to submit. It’s imperative to double-check all the requirements and ensure that they’re the right checklist applicable to your business type. There are different types of licenses, different types of work you’ll be performing, and other regulations enforced by the government agency you’re working for.
However, the most common requirements and paperwork that are usually acquired are:
- Lists of ownerships
- Business complete description, location of premises, and facilities included
- Tax permits
- Business license registration fees
- Business insurance (if applicable)
- Financial statements
- Other requirements
In addition to designating a registered agent, every state requires businesses to designate another person to accept notices and other documents on their behalf. This is where hiring a business specialist can come in handy, as well as a business attorney. They can represent all your applications and follow up on their approval on your behalf.
- Submit Your Application
When all the requirements have been gathered and ready for filing, it’s time for you to submit your application to your respective government agency. Since every business license application comes with its own process and timeline, you should be patient with the results. In some states or countries, it’s possible to file for your license online. However, some of the paperwork or documents might still be needed to be submitted on-site. It’s best to inquire early about these. Depending on your application, more requirements for your specific business type could be required.
- Determine Its Validity
Your business license will be issued once your application is finally approved. After a thorough check and inspection done by authorities in your city or state, they will eventually release your business license. However, you shouldn’t stop there. Licenses come with validity, so it’s crucial to know when they need to be renewed. Note the dates as well as the requirements needed for it.
A business license application may take time, and you could be required to prove more aspects through additional paperwork. The key is to provide each detail timely so you won’t have to delay the process of launching your business. Also, upon filing, when you miss out on just one document, this could be enough reason to get rejected, so it’s best to secure everything before submission.
A business license can be valid for five years or so, but this will vary from state to state and city to city. It’s best to ask early regarding the renewal process and requirements so you can continue running your business seamlessly.
Conclusion
Starting a small business means you must take care of the legalities before you get it off the ground. Applying for a business license doesn’t have to be overwhelming if you become familiar with its steps. Hopefully, this article has given you some insights to get it without delays and hurdles. If you are dealing with complicated licensing requirements and applications, seek legal counsel from an experienced attorney or a trustworthy business specialist.
