Do I Need a Business License for My Company?

Do I need a business licenseA business license refers to the authorization that a business needs to operate legally in that state. If you are about to launch a start-up, you have no doubt asked yourself, “Do I need a business license?”

No matter what type of business you own—whether it’s in a physical storefront or based online—and regardless if it’s a small or large company, you are going to need to obtain and maintain a business license (possibly more than one).

Understanding business licenses can be difficult. This article seeks to answer some of the most common questions business owners have about why you need a business license, how to get a business license, and more.

What is a business license?

  • A business license is a mandatory approval or permit issued by a government agency that authorizes a business to operate within a specific jurisdiction. This license is often an additional requirement beyond the registration of a business at the state level. Whether a business is required to have a specific license depends on such factors as the nature of the business, the types of products it sells and the local government regulations in location of the business.

What is the point of a business license?

  • Business licenses hold businesses accountable for their actions and behavior as well as protect the health and safety of the public.
  • Professional licenses indicate the level of expertise a particular professional possesses.
  • Sales tax licenses are required for the sale of taxable goods.
  • The government uses licenses to track revenue for tax purposes.

Who needs a business license?

  • Almost every company with an income stream will be required to have some type of business license, permit or registration in order to operate legally, in full compliance with government regulations.
  • Some licenses are required of all businesses operating within a jurisdiction. These include:
    • Basic Business Licenses
    • Payroll Tax Registration (if there are employees)
    • Sales Tax Registration (if it sells tangible goods or performs taxable service)
  • Many licenses are industry specific. Commonly licensed industries include:
    • Healthcare: Pharmacy, Wholesale Drug Distributors, DME, etc.
    • Debt – Collection Agency, Debt Buyers, Debt Settlement, etc.
    • Insurance
    • Construction – roofing, electric, plumbing, home improvement, etc.
    • Charities
    • Tobacco – wholesale and retail
    • Telemarketing
    • Retail sales
    • Security – Guards, Agencies, Alarm Companies, etc.
    • Energy Broker
    • Engineering

Where can I get a business license?

  • Business licenses are issued by all levels of government and, depending on what type of goods you plan to sell, you may need to obtain a business license on federal, state and/or local levels.
  • Certain businesses are required to obtain a federal business license, such as the sale of alcohol or firearms.
  • State business licenses differ from state to state, so be sure to find out what your state requirements may be.

How do I get a business license?

  • First, determine where your business will be operating—which state, county and city.
  • You can find your state and city regulations on the SBA website.
  • Make sure you have your company’s Federal Tax ID Number (EIN).
  • Every type of business has a specific business code, so know your code when you apply for a business license.
  • Check to see if, in addition to a business license, you may need a permit, as certain types of businesses need both.
  • Be sure to pay the filing fee, which can range from $50 to $400 or more.
  • You may need to get fingerprinted, depending on the type of business and the state.

Where do I need a business license?

Most businesses, regardless of their size or structure, need a business license to operate legally, so you'll likely need to get one before you begin operations. Furthermore, if you adjust your offerings at your business, you may need to obtain a new business license. Certain professions or services may require special licenses or permits.

What happens if I do not obtain a business license?

  • Your business could be liable for significant damages and/or penalties.
  • Neither you nor your company will be protected by local, state or federal ordinances.
  • You will likely have to pay a fine.
  • Your business may be temporarily or permanently shut down.
  • Your company’s reputation may be tarnished.
  • You could be held personally liable.

What happens after I have my business license?

  • Many business licenses, including most Delaware business licenses, require annual or biannual renewal.
  • Businesses should rely on their own internal compliance personnel in order to stay on top of business license renewals. Although most licensing jurisdictions do send renewal notices, companies should not rely on these reminders.

Keep in mind that it is not just new businesses that have to think about acquiring a business license. Existing businesses must be mindful as well. Many situations could cause your company to fall out of compliance. The following are circumstances in which the requirements of your existing business license could change, and your company could need to update its business license:

  • Your company began transacting business in another city, county or state
  • Your company hired a new employee
  • Your company began selling a new product or service
  • You opened an additional business location
  • You closed a business location

Business license compliance is an important aspect of owning a company, but it doesn’t have to be stressful or tedious. However, some governmental agencies are easier to deal with and more efficient than others.


Next: Business License or LLC First?


*Disclaimer*: Harvard Business Services, Inc. is neither a law firm nor an accounting firm and, even in cases where the author is an attorney, or a tax professional, nothing in this article constitutes legal or tax advice. This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances. Any action taken or not taken based on this article is at your own risk. If an article cites or provides a link to third-party sources or websites, Harvard Business Services, Inc. is not responsible for and makes no representations regarding such sources content or accuracy. Opinions expressed in this article do not necessarily reflect those of Harvard Business Services, Inc.

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There are 14 comments left for Do I Need a Business License for My Company?

Stanley Thomas said: Wednesday, June 2, 2021

Hi I was wondering if you have a business partner do both of you have to apply for a federal tax ID state tax ID and business License or is 1 enough

HBS Staff replied: Wednesday, June 2, 2021

Hi Stanley,

Thank you for reading our blog and for your question. The IRS requires only one persons name to be the Responsible Party on the application for obtaining the EIN for the company. As far as the State Business license this is not something we assist with and is obtained in the County and State in which you are physically doing business.

Gal Gadot said: Saturday, February 13, 2021

Brilliant article, much obliged for assembling this! This is clearly one incredible post. A debt of gratitude is in order for the profitable data and experiences you have so given here.

HBS Staff replied: Monday, February 15, 2021

Hello Gal,

Thank you for reading our article. We're so glad to found this was helpful to you. We wish you much success.

Joseph D Boyce said: Friday, October 30, 2020

I have a LLC for delaware, I recently obtained a firearm instructor certificate I would like to teach a class once a month. I would rent a room at a hotel for this class. Do I need a permit for this once a month endeavor and if i do how and where to i apply an pay????

HBS Staff replied: Monday, November 2, 2020

If you need any assistance obtaining the business licenses or permits for your situation, many of our clients have worked with or email Office phone 800-292-0909 x 304.

Angel Espinoza said: Thursday, March 26, 2020

Hello, Good evening I would like to know if you can help me get information if I may need a license or a permit to operate as a Language Service Provider company, like an Interpretation and translation company for Example, Language Line Solutions, Cyracom, LSA and such and to be able to offer my services to clinics, Hospitals, schools, and government departments like Human Resources, 911, etc. Thank you.

HBS Staff replied: Monday, March 30, 2020

We don't have information regarding specific types of businesses and what permits or licenses they require. You can contact out partner,, and they may be able to assist. You can also try contacting your state's offices or a legal professional for assistance.

Aran said: Sunday, January 5, 2020

I incorporated a single member LLC in Delaware. I have a foreign LLC in Georgia where my business is physically located. I have a business license from the local county in Georgia. Would i need to get a business license in Delaware as well?

HBS Staff replied: Monday, January 6, 2020

Typically, you only need a state business license in the state(s) in which you are doing business. We can't advise on specific situations, but you can check with the Delaware Division of Corporations directly or consult our partner LicenseLogix ( for assistance.

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