When you open up a business, even a small one, you must have business licensing, essentially, when it comes to operating it legally. The purpose of the license is for local governments to regulate what businesses are in the city and collect local taxes from all the businesses operating within the city limits. SG INC CPA will cover what things you need to look out for and what information you will need to fill out that application for a general business license. Let us guide you in the flow.
Get to Know with Application
The first thing you need to know is where your business is going to be. Is it a home-based business or a storefront? There are a few differences. You have to hop onto the internet and get to that application.
Explore Your Local Govt. Website
You will use the browser or directly start at google.com to find your local government website that regulates business licensing. We will use our city as an example, so we log on to www.cityofluverne.org. Here we are on the web page. What we need to do is to navigate to the business department. Luckily, its right here, and we can click on “Business Licenses” to head over. The City of Laverne only does printed applications, but what we need to do is three things:
- Fill out the application.
- Determine the fees
- See what zoning regulations there are.
Filling out the Application
First, let’s get to the application. Once we click it, we navigate to another page where we get more information. This is the basic application, and its pretty standard for most cities. What you’re going to need is a DBA, an EIN if you have one, and a driver’s license if you’re applying for the first time. You will go to click “New Application,” and then you will put your business name and your business contact information. Next, you will add your business description. You can be a home-based consulting business, so you can check the given box.
EIN: This federal ID is going to be the EIN that you would have applied for previously. If you don’t have one, you can apply for one. You can put a dummy number here to show what it looks like. The resell number is a seller’s permit. You also have an official video guide by the local government website on this and how to get one. If you think you need one, check out the video first and then proceed to apply.
Apply For a Permit Instead
You do go deeper into what instances you will need the permit, but if you’re not going to be selling a physical product that will be taxed, don’t worry about this. There is the state license number. It varies from city to city and could be a contractor license number or a driver’s license number, depending on the business. If you don’t know what this is, you could always call the city clerk for more clarification or use your local Chamber of Commerce to help you out. Then, you put your business type. Again, you need to know how your business is going to be structured to check that box.
SIC For Sole Proprietor
If you apply as a sole proprietor, you might come across an interesting question about an SIC code. “I don’t know the SIC code. How to put it here?” You can search the SIC code and your business description. You will also get a result from NACE, which handles SIC codes. You will have just to make sure the description is right. If it looks good, you can put that on your application.
Address Information and Additional Details
Next is going to be some address information. There may be a few spaces for you to choose. For example, you would choose this concerned one if you’re a storefront. If you’re a home-based business, this depends on what type of license you require. This last one is different; you only get served at a different address. You don’t need to worry about this last part, so we’ll move on.
Fill out Your Proprietorship Information
The bottom section is for sole proprietor owners, general partners, or members of an LLC. You must put all the information for members, so ensure you do that. For instance, if you apply as an individual, you must put your information as a sole proprietor. The final section is fees, so let’s get to those.
Determining Fees and Completing the Application
The application should have opened a new tab, so you will go back to that list and choose “Business Fees” this time. The fee schedule for a general business license is available. You will need to find the category that matches your business description and SIC code.
- You’ll choose “Retail” from that list if you’re a retail business. Now
- You need to estimate your tax fees. You will need to estimate what your gross sales are.
If your taxes are $10,000 or less, they’re a flat $35. Suppose they’re more, like, $15,000; you’ll need to do a little bit of math. Our rules add 40 cents per thousand, so if you have $5,000 more than $10,000, it’s $2. So, let’s get back to you regarding your application.
You will put in “Business Fees” to feed your estimate of $15,000 in gross receipts for the next year. The next two boxes don’t apply to us, so now we’ll have the tax number calculated at $37. We have to do one more thing. We need to do our home occupancy for the home-based business other than the general business license.
Home Occupancy and Final Check
Here, you will go back to the other tab and back to the business licensing home page. Now, you need to click on the “In-Home Business” link. The first thing to consider is the fee, $50. Remember that it’ll be important later. This is the permit application for an in-home business. If we open it up, it’s pretty straightforward with any type of license as:
- The first page has all the rules defined by the local governments.
- The second page is the permit application.
A lot of information is going to be the same. If you own the property, you will put your information and sign. If you don’t own the property, you need to get permission and a signature from the owner, manager, or HOA if you need to.
Review and Final Check
Once you have done with business licensing or your professional licenses, let’s head back to the application. Now, remember what that fee was for the home occupation permit? That’s right, $50. We have our:
- $37 license tax
- The $30 processing fee
- The zoning fee of $50
- The state fee of $4
- The grand total of $121.
Conclusion
Let’s check everything is in order and complete the application. You can print both of these forms to sign them later and walk them in or mail them in. Remember, each license type will have different applications and rules governing what businesses and zoning are defined.
They will also have different costs. It’s a good idea to factor these costs into your business plan before you attempt to file these applications for business licensing. SG INC CPA has covered every aspect of professional licenses as well as overall company licensing; if you still need any assistance regarding your company license application, we are here to help. If you found this blog helpful, give us a move and share it with your circle.