Small Business Series: Obtaining Licenses and Permits

In Part 2 of our Small Business series, we discussed the different legal structures for businesses.  In Part 3, we describe the major permits and licenses business may need to obtain. When it comes to opening your business, regardless of its structure type, it is vital to have the proper permits. Operating without licenses means you’re at risk for being closed down by the city or facing steep financial penalties.

Whether you’re in retail, service, or real estate—any of countless types of small businesses that are out there—you are required to obtain a handful of varying permits to be legally allowed to actually operate your business.

Permit Types for Every Business:

General Business License – As you might assume, a general business license is required by most cities for a business to be allowed to legally operate. To get one, all you need to do is visit your city’s website and apply.

“Doing Business As” –  You will need to register the name of your business. This is known as a “Doing Business As”, or DBA, license. DBAs can be acquired through the county clerk’s office. This allows you to register your company’s name with civil authorities. 

Note on business names: Don't forget to check online for the name you intend to use for your business to make sure its not already registered with another entity. The US Patent and Trademark Office website allows you to check whether the name is registered and a general Google search can be useful to make sure there is not a  business with a similar name in your target market.

Federal Tax ID Number – Most businesses will need to apply for an Employee Identification Number, also known as federal EIN or Federal Tax ID Number; Sole Proprietors can use their social security number.

Sales Tax Permit – If your business will sell goods, you will need a Sales Tax Permit from the State Board of Equalization in order to collect and pay sales tax.

Other Permit Types:

Home Occupation Permit – This special permit type is for businesses that operate from within a residence.

Fire Department Permit – Any business operations that may involve flammable materials also require a permit from your local fire department. To acquire one, request an inspection through a local fire department or the county fire marshal. These permits are granted upon successful completion of a safety inspection.

Health Permit – This permit is required for businesses that sell products or services that could potentially (and unintentionally) make a patron sick if not treated properly. Examples include food industry services such as restaurants, grocery stores, and catering companies. Other businesses not related to food service that also require a health permit are salons and barber shops, tattoo parlors, and flea markets. 

Special Federal Licenses and Permits – Additional permits are required for businesses that sell firearms and alcohol. These activities are regulated by the Federal Government.

This list of license and permit examples may or may not apply to your business. Consult your local and state governments, and small business associations to determine the licenses and permits required for your type of business and its location. 


This article is Part 3 in our Small Business series. Previously published blogs can be found below:

Part 1: Nine Steps for Starting Your Own Business
Part 2: Choosing the Legal Structure for Your Business


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