Business licenses are permits issued by government agencies that allow individuals or companies to conduct business within the government's geographical jurisdiction. It is the authorization to start a business issued by the local government. A single jurisdiction often requires multiple licenses that are issued by multiple government departments and agencies. Business licenses vary between countries, states, and local municipalities. There are often many licenses, registrations and certifications required to conduct a business in a single location.
Business registration is required by most jurisdictions. A business license can be a business registration, but many jurisdictions require further licenses beyond registration.
The business activity and physical location (address) determines most license requirements. Other determining factors may include the number of employees and the form of business ownership, such as sole proprietor or corporation. Incorporation is not the same legal process as being licensed to do business. Government agencies can fine or close a business operating without the required business licenses.
Licensing and business registration requirements
In the United States, the Small Business Administration has a list of links to State websites for State licensing requirements. Each State has its own business registration and licensing requirements. Business.usa.gov is an official business link to the U.S. Government. Business.gov, managed by the U.S. Small Business Administration.
Example: Washington, D.C.
- The Department of Consumer and Regulatory Affairs (DCRA) is the District of Columbia's regulatory agency. DCRA ensures the health, safety, and economic welfare of District residents through licensing, inspection, compliance, and enforcement programs. In addition, Department of Health (DOH) issues certain professional licenses, District Department of Transportation (DDOT) regulates public space, and Office of Zoning (DCOZ) controls land use.
Most individuals and companies doing business in the District of Columbia must obtain a Basic Business License from the Department of Consumer and Regulatory Affairs. Separately, organizations (including non-profits and cooperatives, but not including sole-proprietorships and general partnerships) must register their business. Many types of businesses require additional certification or permits beyond the Basic Business License and registration. D.C. requires a "Clean Hands Self-Certification" from most applicants, which is an affidavit stating that the applicant does not owe more than $100 to the District. Tour Guides must submit a Physician's Certificate. Fees for businesses licenses vary. The fee for a Special Event license such as a marathon is $209. The license for a movie theater costs $1,079 per year, for a grocery store $289 per year, for a beauty shop $78 per year. (2003 schedule of fees, current as of March 2007) A Project Management Firm does not require a Basic Business License, nor does a Handyman. Residential House Painters must submit a Home Improvement Contract signed by the homeowner.
Physicians and other health care professionals require licenses from the Professional Licensing Administration in the Department of Health.
Pennsylvania allows online registration of small business start-ups, but does not provide licensing guidance.
- The Pennsylvania Open for Business Online Business Registration Interview (OBRI) is a step-by-step wizard that guides users through the process of registering an enterprise with the Departments of Labor & Industry, Revenue, and State.
- The OBRI is a business registration tool and is not intended to be a replacement for professional consultation with qualified practitioners. The laws and regulations governing business start-up, practice, and expansion are varied and compliance with such standards depends upon the particular circumstances of a business. If legal advice or other expert assistance is required, the services of a competent professional should be sought.
Certain actions are required by all businesses in Pennsylvania in order for them to continue in business in Pennsylvania. This includes New Hire Reporting (including reporting oneself as a new hire when starting a business).
- BizPaL, Canadian service for SME permits and licenses
- Sullivan, arthur; Steven M. Sheffrin (2003). Economics: Principles in action. Upper Saddle River, New Jersey 07458: Pearson Prentice Hall. p. 186. ISBN 0-13-063085-3.
- SBA: Where to Obtain Business Licenses Accessed 1 April 2007.
- Washington, D.C. Department of Consumer and Regulatory Affairs - Licenses and Permits Accessed 1 April 2007.
- Washington, D.C. Department of Consumer and Regulatory Affairs - Basic Business License Information
- Washington, D.C. Health Professional Licensing Administration: Professional Licensing Boards
- Pennsylvania Online Business Registration Interview Accessed 1 April 2007.
- Pennsylvania - Forms for all Businesses Accessed 1 April 2007.
- How to Obtain a Business License - a wikiHow article on getting a business license.