In order to operate a small/home based business one must be sure to acquire the necessary licensing required by law to legally operate the business venture.
Local Level
Many cities require the business owner to acquire a specific license to conduct business in the locality. Such business licenses are issued by the city the business is located within. Usually the licence is applied for through the local city hall. The license must be specifically for where the business is operated and physically located. And if the business is also located in other cities a license must be applied for in that locality. The business owner should talk with local representatives at the local government offices to find out other license regulations affecting the the business.
Local Zoning
If an Internet based business is run out of the home, zoning issues might not become problematic. A zoning issue will occur if said business owner receives many customers or home deliveries which interfere with the surrounding neighborhood.
If the business is located in a commercial building the business owner should obtain a Certificate of Occupancy. The local county is responsible for issuing the owner this certificate. This license will enable the local government to enforce zoning laws. And to also make sure building codes are enforced.
State Level
On the state level the business should be registered with the State Tax commission. This is vital if the business will sell to the public or hire employees.
Note: A retail license is necessary if the business sells a product to the public. Service type companies are not required to have a retail license.
Other professions require specific state licensing. For example, If the business will sell alcoholic beverages a special permit is required.
Federal Level
On the federal level the business is required to have a federal identification number (federal tax number) to do business. Download Form SS-4 from the IRS Small business Web Site.
Note: If the business is a sole proprietorship without employees the business owner may use their own Social Security Number for any tax purposes. Visit the IRS for up to date information on federal business requirements and how they relate to a sole proprietorship.
In addition, the business owner should check sources within their industry to determine if other licensing is required for their business. For example, special licensing is required for those business owners involved in selling liquor, selling food, cutting hair, styling hair, opening a daycare, health services, or legal services.
For names of specific government agencies in your community check the pages of the local telephone book.
