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Starting a new business and having to acquire business licenses and permits is no joke. A start-up with a unique idea may be exciting since it may be your first business adventure, but procuring licenses and permits is one of the least exciting parts of the journey. For legal operations, virtually every business needs licenses. However, knowing which one is right for your business can be a tricky question. It all depends on the rules and regulations of the local government and policies set by the federal government to ensure safe and healthy business operations.

Since we all need to abide by certain rules and regulations for operating a business legally, we need to involve state agencies and legal authorities to learn the legal obligations for a new business start-up. Small businesses usually face a lot of difficulties in setting up a business scratch since they lack awareness regarding licenses and permits. More often than note, it is better to hire the expertise of legal experts to get the job done right—the very first time!

Lack Of Awareness Can Be Troublesome

Quite too often, small businesses overlook the need for procuring licenses and permits as they may be unaware of the requirements. Entrepreneurs can face heavy penalties and can even face jail-time if they fail to pay and register their businesses with the relevant departments. This may be extremely costly to businesses because start-ups can’t afford to pay anything extra for a fine since they already have scarce resources to run the operations of their business. However, the good news is that now you can acquire the right license and permit without to pay an arm and a leg, assuming you know which permits to register for.

Why Do Businesses Need Licenses and Permits?

Licenses and permits allow businesses to fall under the government’s legal protection. Registering with various government entities, such as the chamber of commerce and ministry of trading, will help create more opportunities for business growth and expansion. These government entities promote and support businesses by exposing them to international markets. The legal relationship with the government also allows subsidies (if announced by the government for the specific sector), which is huge for a start-up’s potential growth and success. It also eases the government, allowing them to track a business’s revenues for tax purposes.

Licenses and Permits—Done Right

There are also certain types of businesses that cannot be initiated at all without acquiring licenses and permits from the specific departments that come under direct control of the federal government. By certain types, we are referring to businesses that involve international trading, alcohol, aviation, and agriculture. This is why finding an experienced legal expert to execute certain important tasks like licensing and permits for specific industries is critically important. Experts can trace and make contact with federal departments better than we ever could. It’s safe to hire them for legal affairs of a business and will allow the start-up to get the footing they need to begin.

Managing and Maintaining Licenses and Permits

According to studies, even registered businesses have to pay fines and heavy penalties because they fail to manage and maintain their licenses and permits. Acquiring a license is easy but maintaining it by keeping a track of renewal dates is difficult. In order to avoid penalties, you should maintain and produce a copy of the licensing application. Display the licenses and permits correctly so that customers can see them clearly. You may need additional business licenses if you plan to expand your business operations, either locally or internationally.

Initially, most businesses used to manage and maintain their licenses on their own. However, now, this responsibility has often been transferred to legal experts who further have professional accountants in the loop for ideal bookkeeping and accounting records to know the exact status of taxes and finances.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

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Business owners starting an online business in the retail industry have to consider many aspects before their start-up takes off. Things like capital, marketing expenses, financial expenses, branding, logistics, operations, and customer service are just a few of the critical components of a business. Entrepreneurs must also determine whether or not they need a business license before they launch their online store.

Licensing Depends on Location

Having to obtain a business license for an online store to sell your product online depends on which state you are in. Every state in the US has different rules and regulations related to an online start-up. Before investing your precious capital on your business, check with the local authorities about the permits and licenses needed for your business operations. Having licenses and permits will avoid future hassles for your business.

The licensing rules for starting an online business vary from state to state and city to city in the U.S. Let us take the example of Los Angeles, California. The law in Los Angeles requires online start-ups to file for a Doing Business As (DBA). The second requirement is that the company must have a resale permit. Businesses in Los Angeles are required to announce their DBA in newspapers at least four weeks before selling any products.

If you happen to move your business from the LA to another county in California, the address must be changed accordingly. It’s essential that the company send new details and taxes to the state as soon as all of the details are provided. The new county will get in touch and request you to file a license for your company.

Collect Information about Requirements of State or County

A business license for an online store will facilitate the start-up owners. The Small Business Administration (SBA) has created a comprehensive list that includes state license offices. The offices will guide business owners about the different licenses and permits that an online retailer would need.

The permits and licenses depend on the location of your business and operations. The following licenses are commonly required for online retailing in the U.S.

  • A license for sales tax registration
  • Zoning permits
  • Federal licensing
  • Professional licensing (if your online licensing offer specialized services like dentistry, doctors, hairstylists, vets, and equipment repairing)
  • Health inspection license
  • Home occupation license (for consultants)

Licenses and Permits needed for a Home-Based or Online Business

An Online business that are runs from a home or office that is located on a residential block must have a “home occupation permit.” The permits are shaped to prevent businesses from adding noise, disturbance, littering, dust, and odors.

Business License for Online Store

Almost all businesses in the US are required to obtain a business license for an online store. A business license is required for home-based businesses. If your company does not have regular deliveries or pickups and does not rely on maintaining a more extensive inventory daily, then it will be easier to get a license.

Larger online stores are required to submit detailed transactions. For more prominent online retailers, zoning department permits could be applicable. It could be essential if delivery and pickup trucks show up at the location more frequently.

Every state in the US requires a business license for an online store. The permits and registration documents allow the government to track the required taxes. The tax requirement is a must for any business. It’s always essential to keep your license updated when it is about to expire to avoid legal issues.

Registration with Worker’s Compensation and Unemployment Department

The permits and regulations above apply to online businesses. For example, an online business that will hire employees must register the business with the Worker’s Compensation and Unemployment Departments. Zoning permits are probably not applicable to online business, but it could be required if shipments move to and from a residential home.

The sales tax rules are somewhat complex when they are designed for an online business. The sales tax on online sales is not clear. The classification of sales tax on online transactions requires information collection and discussion with an accountant or bookkeeper.

When starting an online business, it is always important to check with your local authorities about the different permits needed to conduct your business. These licenses, in the end, will allow you to run your business without worrying about a shutdown. It’s essential to get a business license for your online store, even if your state and county jurisdiction do not require it. Having a proper permit and license for your company will make it legitimate and completely safe.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.