Operating an unlicensed business can be considered fraudulent activity, so some jurisdictions may decide to arrest responsible parties. In addition, if you are in a field such as medicine or law, practicing without a license is illegal and can result in arrest. A company caught operating without a license could be forced to cease operations. In some cases, once licenses are obtained, the company is free to reopen.
But in some cases, a company may have to wait for a mandatory probationary period, or worse, a city may refuse to grant a license to the company. There is a penalty for operating without a business license and therefore it is important that you first obtain the proper license before doing business. Specifically, a business license is granted from your local, county, or state government in which you plan to do business. This license gives you permission to start doing business in the state.
Licenses are issued by government agencies. They are a type of legal contract that allows holders to perform actions that would otherwise be prohibited for those who don't have them, such as driving a car or running a business. Driving a car without a license is illegal and it is prohibited to run a business and provide professional services to individuals. These actions are regulated by the issuing government, usually at the state level.
The appropriate agencies are responsible for issuing these licenses. Failure to obtain or renew a business license can be a costly mistake, resulting in substantial penalties, including a fine for operating an unlicensed business, lawsuits and, in extreme cases, even arrests. Because the consequences of running a business without a license can be far-reaching and long-lasting, it is essential that you understand the risks of non-compliance. Business licenses are necessary to protect your company from lawsuits.
There are several ways this can happen. In small claims court, a disgruntled customer can file a lawsuit against you, alleging the lack of a business license as fraudulent activity. In addition, if you are sued without the proper license, the court may not issue a judgment against your company, regardless of the other merits of the case. You could be forced to pay costly damages and legal fees, in addition to any other fines or penalties.
Many people don't realize that business closures are the potential result of not renewing or obtaining a business license. But, unfortunately, it's a very real consequence that a company could face. Virtually every small business will need some type of license or permit to operate legally. Unfortunately, knowing what type of license you need to operate in your state and your specific industry isn't that simple.
Depending on the type of small business you run, you may need to obtain local, county, state, or federal licenses for small businesses. To help you classify what licenses are required to start a business, let's look at the possibilities for each level of government, local, state and federal, so that you can better determine what types of business licenses and permits can apply to you. With a few exceptions, these are the main types of business licenses and permits you will need to obtain with your local or municipal government to start your business. We should keep in mind that you may not need all of these licenses at the end of the day, however, all of these types are worth checking out, just in case.
Unfortunately, to legally maintain your home business, you will need these types of business licenses to start and run your operations. In addition, you should remember that online businesses are also not exempt from these regulations. If you're wondering Do I need a business license to run an online business? the answer is, once again, yes, you'll also need to purchase the right licenses to get started. In addition, some necessary licenses are issued locally.
The requirements vary depending on the city or town in question. For example, Philadelphia and Harrisburg require that everyone conducting business in the city obtain an annual business privilege license. In contrast, Pittsburgh and State College do not have this requirement. You can find more information by consulting the website of the city in which your business will operate.
Some businesses may be exempt from local licensing requirements under state or federal law. Almost every business requires a general business license to operate, whether from an office or from home. Create your own personalized business registration checklist by answering a few questions about your company. Some cities require you to have this type of small business license from the fire department before opening your doors.
However, in addition to these exciting to-dos, there are also more tedious tasks that need to be done before opening day: determining your company's budget, obtaining a business identification number, and of course, all the other necessary paperwork. Nearly all small businesses need a license or permit from state officials, but requirements and fees vary by type of business, location, and applicable government regulations. If you've figured out what licenses are necessary for your company and are now wondering when you need a business license, the answer will most likely be as soon as possible. If your city or county doesn't have a specific business licensing department, you can get information on how to get a basic business license from your local tax office.
Nearly every business will need one or more licenses to legally start and operate their businesses, whether at the local, state, or federal level. If you have already obtained your local business license, then you know the general gist of what a state operating license for small businesses is. Dealing with the licenses you need is probably not your favorite part of business ownership, but once you've taken care of this essential step, you can move on to other, more exciting aspects of launching and growing a successful small business. We strongly recommend that you obtain an FEIN, whether mandatory or not for your particular business structure, so that you can properly identify your company to all state government agencies.
Ultimately, many home-based businesses have to go through the same process to obtain the licenses needed to start any type of business. Most states have offices specifically designed to issue state business licenses, but you can also check the SBA State Business License Office Locator to find out where you can get yours. . .
