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Many people who want to own a business consider starting with a retail business. Whether you’re starting with something mobile – like a food cart at a tourist site – or a store in a fixed location, there are a number of laws you must obey and legal documents that you must obtain before you make your first sale.
As the saying goes, “Location is everything.” As you look for suitable space for your retail business, make sure that the property is zoned for retail businesses. Many towns restrict the type of businesses that can operate in certain neighborhoods. For example, a busy warehouse wouldn’t be permitted in a residential neighborhood.
You’ll also want to check to see whether there are any restrictive ordinances that could make it difficult for your business to succeed. For example, a law that prohibits large signs could make it difficult to advertise your business to people passing by. A law prohibiting street parking could make it difficult for customers to shop at your store.
Licenses, Permits & Registrations
Before opening your store, it’s important to obtain all of the necessary licenses, permits and registrations. These are documents issued by the government that give your business the right to perform a certain action. For example, your car must be registered with the state before you can legally operate it on public roads, and after registering it, you usually receive both a paper registration and a license plate to display on your motor vehicle. Without these items, it is illegal to operate the car.
Depending on the location of your store, and the types of products you sell, you may need one or more of the following licenses, permits and registrations.
- City, county and/or state business license: Gives you the right to legally operate the business in your state
- Sales tax license: Necessary if your company will be collecting sales tax on its sales
- State and federal tax registration: Provides you with an employer identification number available from the US Internal Revenue Service and from your state’s Department of Revenue, Comptroller or Department of Treasury
- Weights and measures license: If your store has commercial weighing or measuring devices, such as deli scales or gas pumps, that equipment will be inspected and licensed (usually by the state Department of Weights & Measures) to ensure that your customers are receiving the exact amounts that they are paying for
- Specialized licenses & permits: These may be necessary if you’re selling certain types of items, such as liquor, tobacco, gasoline, firearms or lottery tickets
Your attorney, the local Chamber of Commerce or a regional office of the Small Business Administration can help you determine exactly which permits, licenses and registrations are required in your area and which government agencies issue those documents.
Your business may also receive periodic inspections from various government departments to ensure that your store is complying with all applicable laws.
For example, the local fire department may conduct unscheduled inspections to make sure the store has clearly marked exits and no obvious fire hazards. If you sell food – regardless of whether it’s made onsite or repacked – the local health department will want to confirm that food is being stored and handled in a safe manner, and that there is no evidence of pest infestation. In addition, the Department of Weights & Measures may make periodic visits to ensure that your scales and pumps are accurate.