Licenses are widely used by the government for monitoring businesses. A business license gives a unique opportunity to run your business within a certain location, even if you are an eCommerce business. It also shows that you have approval on the government level to operate in the state or country. Some states require more licensing than others. Let’s go through the Prestige Auditors blog and try to understand all the nuances of your business licensing.
Here are the Main Examples of Business Licensing:
Federal Business License – In most cases, this type of license is needed if you are dealing with products supervised by the government, such as tobacco or alcohol.
State Business License – You need this type of license when you are gearing with specific industries; however, it can also include a nonspecific license for all business operators. Each State’s requirements vary from the other; keep in mind that you also need a tax license, depending on state requirements.
Local Business License – Includes such aspects as zoning permits, occupancy permits, and others. In most cases, you need this type of license for home-based online businesses. It can also be used for setting up an eCommerce business.
How to Apply for an E-commerce Business License?
As you know, a business license is required from all companies, no matter you are going to run a brick-and-mortar store or are planning on starting an eCommerce store. The main role of a business license is to provide the government with an opportunity to keep track of both enterprises and their tax revenue. By operating your business without a license, you risk getting hit with heavy fines. The difference between an eCommerce business license and a brick-and-mortar business license is really not that monumental.
When do You Need a Business License?
Before reaching a specific revenue threshold, you may not apply for a business license. To determine your local laws, you can visit the SBA webpage. There are a lot of benefits to registering your business. First of all, this process allows you to claim a tax deduction, according to the Small Business Association (SBA). Also, your business obtains a greater appearance of legitimacy with a license, which can be vital for obtaining a solid partnership.
Where can You Get a Business License?
As we have mentioned above, the requirements for acquiring business licenses in each of the states are different. You can find detailed information on the requirements of your state by visiting the SBA. You can also apply for your business license online.
Here is what you need for applying for a business license:
- Determining legal structure, whether you are a Sole Proprietor or Limited Liability Corporation (LLC)
- A detailed description of your business activities
- A sale tax license
- Inspections and other permits
Your Home Business Zoning
Before issuing a business license, the state agency always conducts a zoning review of your business location. So, try to make sure that you can operate your business out of your home. Sometimes those who are running e-commerce businesses face some issues with zoning since most of the areas have relaxed zoning laws for home businesses.
Obtaining a proper business license for your e-commerce store is crucial for successfully launching your business. It does not only ensure your legal operation but also preserves you from issues such as facing fines and helps make your e-commerce store a legitimate business entity.
If you’ve decided on starting an eCommerce company, feel free to contact Prestige Auditors. Our professional team can help you in the process of obtaining all the necessary documentation which is crucial for your e-commerce business, and we offer a wide variety of eCommerce business solutions to boot!