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What Is A Business License, Which One You Need?

What Is A Business License, Which One You Need

Businesses require a legally-certified document to run commercial operations in the US. The document is simply known as a business License or permit. SG INC CPA  helps entrepreneurs obtain a small business license to accelerate their business back-office so that they have more time to enjoy their passions in life. It’s essential for entrepreneurs and new startups to have licensed permission for business operations, even if a saloon or small contractor. Let’s take an insight into what a business license is and why you need one for your commercial activities.

What is the Difference B/W Business License & Permit?

Business license and permit are two common documents that grant permission to business owners to establish their business firm legally. They are similar in legality, however, they are different in validity. We, here at SG INC CPA, help you with local small business licenses in California as well as business License renewal to let your business work uninterrupted.  For your clarity, we elaborate on the difference between a business license and a permit.

Business Permit

A business permit is like a passport to enter a pool of registered skilled workers with NOC to work. Most often, independent professionals and other contractors must require a business permit to keep their small businesses going. You need a permit for your small business or commercial operations if:

  • You are earning money and not an employee.
  • You are an independent contractor or freelancer.
  • You work in an MLM as a sales rep. 
  • You work from home and make money
  • Are you setting up a partnership or corporation? 

If any of these gets answered yes, then you are a business and need to be set up as such. You must require a business permit to provide your commercial services or products to the audience.

Business License 

Business Licenses validate small and conglomerate firms as legal services or products-providing entities. Our business advisors assist entrepreneurs in establishing a business firm in the US. We have extensive knowledge and professional background to work as a business license expert in Dallas, TX, and Milpitas, CA. However, we are also accessible from all over the States through our virtual CFO and licensing experts.

What License Does Your Business Need?

Every type of business needs a certain kind of license or permit to operate legally within the US. One of your first steps should be to obtain a business license to set up a business. However, you need to find out what kind of business license you need. Moreover, it is also important to know where you get it. So it can be a little head-spinning. 

It relies on the type of business you own. Where is it located alongside, and what federal, state, and city/county regulations apply? Following we cover some common business licenses in the US.

Federally-Controlled License 

Let’s first talk federal. A small number of businesses in the US undergo federal regulations. Likewise, they also require licenses at the federal level. If your business or company lies under one of these types of businesses, you must require a biz license issued by the federal authorities. Otherwise, it likely doesn’t apply to your case. But just in case, you can always go to the Small Business Administration’s website,, and look up federal business licenses because they have a list of the types of licenses that fall under that umbrella. 

What Biz Licenses Are Federally Issued?

Some businesses or commercial operations require biz licenses from federal tax and regulatory authorities. These are the companies, alcohol resellers, and such firms. These are things that are federally regulated, and for most of you, it won’t apply. But if you want to double-check, you can always go to Most of you will start in your State, and every State has different rules and regulations. So you’re going to want to start at your Secretary of State’s website and go into their business section to see what they have about business licenses and permits. It will give you some instructions because most state websites have great sections related to businesses. So you can use to look this information up for: 

  • Health Permit
  • Zoning Permit
  • Sales Tax Permit
  • Alcohol License
  • Import Export
  • Insurance Broker License
  • Security Services License
  • Private Investigator License

State-Controlled Business License 

Some types of business licenses require a state-issued license or permit. It can vary depending on factors such as the nature of the business as well as its location alongside the specific regulations of the State.

  • General Business License
  • Professional or Occupational License
  • Sign Permit
  • Food Truck Permit
  • Mobile Vendor License
  • Bed and Breakfast License
  • Tour Operator License
  • Wedding Planning License

How to Get Started with a Business License?

What you might find, though, at the state level is that they delegate your business license down to the city/State level. So, that might not be your last stop. So, you definitely want to go to your city or county webpage and look up their business information. In most cases, is the website where you’re going to apply for your small business license or permit.

How Much Does It Cost for a Business License?

How Much Does It Cost for a Business License

Now, because this is regulated based on city and State, everyone is going to be different. Usually, the fees are minimal. They don’t cost that much, but the fines can be great—much more than the actual fee to file a business license. It can cost some $100 to thousands to get a business license. However, these are mere processing fees. There are some additional taxes and CPA consultancy charges you might have to pay as well.

Also, make sure that you understand the display requirements for your business license because you might have to display it publicly wherever you’re operating your business. 

How Long Does It Take To Process a Biz License?

They are very time-sensitive, and if you are operating a business, you only have so many days to file that license. You might be delinquent or in this penalty phase.  However, it can cost you money that you don’t want to spend.  One thing to note is business licenses are typically issued based on location. So, if you are working for multiple locations, you might need more than one business license for your business.

What Ways Does a Company License Help You?

The business license helps the owner in multiple aspects to track his:

  • Business licenses
  • Sale DBAs (Databases Analytics) 
  • Tax IDs
  • EIN

How to Process Your Business License?

You can do the legwork yourself, or you can ask our CPAs to help.  There are even third parties that outsource this for you. Our license experts will look at what business licenses you need for your business and file them for you. Now note that the fee will be on top of any type of filing fee, as you have some options there. 


In the conclusive part of our discussion on business licenses, SG INC CPA recommends you not overlook the business license issuance or business license renewal. You mustn’t start operating your business without the right and required licenses and permits. It is not worth the hassle in place of fines and penalties that you can incur. Plus, even if you might be under the possibility of having your business shut down, you must make sure you take this step seriously and get those licenses and IDs in place right from the beginning. 

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