Licenses, Permits and Home-based Businesses |
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Before starting your home-based business, it's important to do your homework and research which licenses and permits are legally required to operate your company. Licenses and permits are interchangeable terms used to describe the documents that grant the holder the legal right to do something. One of the most common licenses is the driver's license, which gives an individual the legal right to drive a motor vehicle.
In many areas, licenses and permits may be issued by town, county and state officials. An experienced small business attorney can help you negotiate the maze of requirements and advise you which licenses and permits are required to operate your home business.
Common Licenses and Permits
Most areas will require all businesses–regardless of size or industry–to hold a general business permit. This permit, which is usually issued by the city or county, is required to legally operate your business within the city or county.
If you are selling taxable goods or services in an area that assesses a sales tax, you'll also need a sales permit (often also called a certificate of retail, certificate of authority or seller's permit).
Certain professions and occupations are also licensed. Each state will have a different list of professions for which a license is required, but it may include accountants, architects, barbers, engineers, morticians and physical therapists. These licenses are often in the name of the individual, not the business. For example, in a beauty salon with four stylists, each stylist would have a license. There may also be state laws or local ordinances regarding the display of licenses at your place of business.
In addition, special permits may be required depending on the nature of the business. For example, food sales of all types usually require a food-service permit or food-preparation license. Child care, such as a daycare center or nursery school, often requires a license. And a retail store selling alcohol or tobacco will need a special permit.
If your home-based business needs a sign to be placed on your property, check with your local zoning office or town representative to find out whether a sign permit is necessary. And if you're doing construction on your office, you'll probably also require a building permit.
Inspections
An inspection may be required before authorities will issue some of these licenses and permits. For example, if your business is involved in food handling (such as selling, processing, preparing and/or storing) you may need an inspection by the local or state health department. If your business handles hazardous materials, or if you have outside employees or clients at your home, you'll probably need a fire department inspection and permit.
Questions for Your Attorney
An experienced small business attorney, who is familiar with your industry as well as your town, county and state governments' regulations, can help you navigate the confusing maze of business licenses and permits.
Among the questions to consider asking your attorney:
- Do you have previous experience working with small business owners on licensing and permitting issues?
- What licenses and permits are required for all businesses? Are there different requirements for home-based businesses?
- What licenses and permits are required for my industry or profession?
- How much do you charge for your services?
Related Resources on Lawyers.comsm
- Letter to Government Official
- Access all Business Legal Forms
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- Home-based Businesses
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- Business Enterprises FAQ
- Find a Business Attorney in your area
- Visit our Business Law Forums for more help