How to Get a Business License: Applications, Fees, and Approval

To get a business license, you identify every federal, state, and local license that applies to your specific business, obtain a federal Employer Identification Number and register your business name, then submit an application and fee to each issuing agency. Most small businesses need at least one license before opening, and many need several from different levels of government.¹ The exact mix depends on your industry, your business structure, and where you plan to operate. None of the steps are complicated on their own; the work is making sure you don’t miss one.

Step 1: Identify Every License That Applies to Your Business

There is no single national registry of business licenses, so you have to check requirements at three levels separately: federal, state, and local. The SBA recommends starting with your state’s secretary of state website, then checking county and city requirements based on your business location.¹

At the local level, most cities and counties require a general business license, sometimes called a business tax receipt, from the municipal clerk’s office or the county licensing department where your business operates. These local agencies focus mainly on zoning compliance, confirming that your type of business is allowed at that specific address. States regulate a broader range of activities, particularly professions and industries that affect public health or safety. Restaurants, construction trades, real estate, healthcare, childcare, and alcohol sales all commonly require state-level permits or professional licenses. Activities commonly regulated at the state and local level also include auctions, dry cleaning, farming, plumbing, retail, and vending machines.¹

Federal Licenses

Most small businesses do not need a federal license. You need one only if your business falls under a federally regulated activity, in which case you apply through the specific agency that oversees it.¹ Common categories include:

Manufacturing, wholesaling, importing, or retailing alcoholic beverages, which requires permits from the Alcohol and Tobacco Tax and Trade Bureau plus your state’s alcohol beverage control board.²
Manufacturing, selling, or importing firearms and ammunition, licensed through the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Manufacturing, importing, or exporting tobacco products, which requires registration with the TTB.²
Commercial drone operation, which requires a Remote Pilot Certificate from the FAA after passing an aeronautical knowledge exam, renewed every 24 months.³
Radio and television broadcasting, which requires FCC licenses filed electronically with public notice in a local newspaper.⁴
Importing or transporting animals, animal products, or plants across state lines, under the U.S. Department of Agriculture.
Commercial fishing, which needs permits from the NOAA Fisheries Service.
Mining or drilling for natural gas, oil, or minerals on federal lands, authorized by the Bureau of Safety and Environmental Enforcement.

If nothing you do appears on that list, you probably do not need a federal permit. You almost certainly still need state and local ones.

Step 2: Get Your EIN and Register Your Business Name

Before you apply for licenses, you need a federal Employer Identification Number from the IRS. This nine-digit number works like a Social Security number for your business and is what you’ll use on tax returns, license applications, and bank accounts. The IRS requires an EIN for corporations, partnerships, nonprofits, trusts, and estates, and recommends one for sole proprietors who are employers or engaged in a trade or business.⁵

Apply online through the IRS. It is free, approval is immediate, and you complete the application in a single session that cannot be saved and times out after 15 minutes of inactivity. You will need your business entity type and the Social Security number or ITIN of the responsible party. If you are forming an LLC or corporation, register the entity with your state before applying for the EIN, or the IRS may delay processing. Ignore third-party websites that charge fees for EIN applications; the IRS never charges for one.⁶

If you plan to operate under a name different from your legal name or your entity’s formal registered name, you will typically need to file a DBA, also called a fictitious name, trade name, or assumed name. Most states require this, though the filing office varies by state, county, or city.⁷ Get this done before submitting license applications so your registered name matches official records.

Step 3: Gather the Documents Applications Ask For

The specific paperwork varies by jurisdiction and license type, but most applications ask for the same core information. Assemble everything before you start the online form, because incomplete submissions get rejected rather than held open for corrections.

Your EIN, plus Social Security numbers for all principal officers or owners.
The exact physical business address, which the licensing agency uses to verify zoning through the local planning department.
Your ownership structure: sole proprietorship, partnership, LLC, or corporation.
A detailed description of business activities. Many applications ask for a NAICS code, which agencies use to categorize your business for statistical and regulatory purposes.
Formation documents. LLCs need articles of organization; corporations need articles of incorporation or bylaws.
Proof of your right to occupy the address, usually a signed lease or a certified property deed.
Proof of insurance or a surety bond if your industry requires it. Bond amounts vary significantly by trade and jurisdiction.

Two extra documents catch many new business owners off guard. If you sell taxable goods or services, most states require a sales tax permit (sometimes called a seller’s permit) from the state department of revenue before you can legally collect sales tax. This is separate from your business license. Many cities and counties also require a certificate of occupancy before issuing a business license, confirming that your building meets safety codes, fire regulations, and zoning requirements for your use. Building, zoning, and health departments all review the space, and a fire inspection may be required. If you are moving into a new space or changing its use, factor this into your timeline.

Step 4: File the Application and Pay the Fee

Most jurisdictions now accept applications through an online portal where you create an account, upload documents as PDFs, and pay electronically. Some smaller municipalities still require paper submissions by mail; in that case, send everything by certified mail with a money order or certified check. Review the application carefully before submitting. Small errors like a mismatched address or a transposed digit in your EIN commonly cause a full rejection rather than a request to correct.

Filing fees are non-refundable and range widely. General business licenses typically run from $50 to a few hundred dollars, while specialized professional permits for high-risk industries can cost significantly more. The amount depends on your business type, industry risk level, and the population of the jurisdiction. The SBA advises checking with each issuing agency directly, since fees vary too much for any ballpark to be reliable.¹ Many jurisdictions offer expedited processing for an added fee, commonly $75 to several hundred dollars, if you need faster turnaround.

Step 5: What Happens Between Filing and Approval

Processing times vary, but standard applications commonly take two to six weeks for review and any required background checks. During that window, a reviewer may contact you for clarification on your documents or business details. Some industries require a physical site inspection by a fire marshal or health inspector before approval. Respond to any request quickly. Most agencies set a deadline, and letting it pass can cause your application to expire, forcing you to reapply and repay the filing fee.

Once approved, you receive your business license certificate by mail or as a digital download. Many local ordinances require you to display the license in a visible location at your place of business. This is not a suggestion; failure to post the license can result in daily fines until you correct the violation.

Getting a License for a Home-Based Business

Running a business from home does not exempt you from licensing. You still need a general business license in most jurisdictions, and many cities require a separate home occupation permit that verifies your business activity is compatible with residential zoning. Home occupation rules commonly restrict signage visible from the street, customer foot traffic, noise, and the number of employees working from the residence.

If your business activity is not allowed under your area’s residential zoning code, you may need to apply for a conditional use permit or a zoning variance. Both involve additional fees and processing time, and neither is guaranteed. Home-based operations are not simpler to license than storefronts. They are governed by a different set of rules.

Keeping Your License Active

Getting the license is not the end. Most business licenses expire and must be renewed, commonly on an annual basis, though some jurisdictions use biennial or other schedules. The SBA warns owners to track renewal dates closely, because renewing on time is far easier than reapplying after a lapse.¹

Missing a renewal typically triggers late fees, and a prolonged lapse can result in suspension or revocation. Reinstatement after revocation often means reapplying from scratch, including repaying full application fees and possibly new inspections. Some jurisdictions impose escalating penalties; a modest late fee in the first month can grow to thousands of dollars if ignored for a year.

Renewals are simpler than initial applications, but they are not rubber stamps. You will confirm that your address, ownership, and business activities have not changed. If anything has changed, you need to notify the licensing agency, usually within a set timeframe. Depending on the license type, you may also need to show updated proof of insurance, workers’ compensation coverage, or a current fire inspection.

What Operating Without a License Actually Costs

The penalties for skipping licensing go well beyond a warning letter, and this is where new business owners tend to underestimate the risk.

Fines are the starting point. Some jurisdictions impose flat fines per violation; others calculate penalties as a percentage of gross revenue earned while unlicensed. They range from a few hundred dollars to tens of thousands for repeat violations.
Criminal charges are possible in some industries and jurisdictions. Operating without a required license can be classified as a misdemeanor, more commonly in regulated fields like contracting, healthcare, and home inspection where unlicensed work poses direct safety risks.
Contracts entered into by an unlicensed business are unenforceable in many states. A customer who received your services may have no legal obligation to pay you, and you may have no standing to sue for payment.
Local authorities can order an unlicensed business to shut down. In enforcement actions, businesses have been given as little as 60 days to either get licensed or cease operations.
Many industries, especially construction and government contracting, require proof of current licensing before you can bid on projects. No license means no access to that revenue.

The financial exposure from operating unlicensed almost always dwarfs the cost and effort of getting properly licensed at the outset. Even where enforcement seems unlikely, the risk to your contracts alone makes it a poor bet.

1
U.S. Small Business Administration. Apply for Licenses and Permits
2
TTB. Applying for a Permit and/or Registration
3
Federal Aviation Administration. Become a Certificated Remote Pilot
4
Federal Communications Commission. How to Apply for a Radio or Television Broadcast Station
5
eCFR. 26 CFR 301.6109-1 – Identifying Numbers
6
Internal Revenue Service. Get an Employer Identification Number
7
U.S. Small Business Administration. Choose Your Business Name