The last thing that you need when you are starting a new business is to find out that you didn’t take care of the required permits and licenses to formalize your business legally. These are important because you can face serious consequences if you don’t have everything in order.
Of course, the permits and licenses you need vary based on the type of business that you are opening. It is best to work with someone who is familiar with your industry to ensure that you don’t miss anything important.
Importance of these documents
Licenses and permits ensure that you are paying necessary taxes, operating the business in a legal manner and keeping the public safe. For example, you need to have a certificate of occupancy for a building to ensure that you know how many people can safely occupy the building. Without this document, you can’t legally have anyone inside the structure.
You may also require a property use permit for a location that allows you to run a business out of it. This varies according to the location and type of business.
You might need a state use and tax permit to legally run your business. The sales tax permit is necessary so that you can collect taxes on the tangible items your business sells.
Special permits and licenses might be necessary
Some businesses require special permits and licenses. If your business is going to sell food, you will need to have the appropriate permits from the health department. If you want to sell alcohol, you need to have a liquor license. In both of these cases, you can face considerable fines and other penalties if you sell food or alcohol without a proper permit.
People who are opening businesses like doctors’ offices, law offices, plumbing companies, cosmetology studios, mechanic shops and electrician businesses will need to have the appropriate license for their profession. These state licenses must be present for the company and the employees. For example, a beauty salon would need to be licensed, and the cosmetologists and hair stylists could also need to be licensed.
Employer identification number
If you are going to employ people, you must obtain an employer identification number from the Internal Revenue Service. This allows you to hire employees and report the money you withhold from their checks to the IRS.