How to find out whether your business needs a license?

Depending on the nature of your business you may need a federal or state license or both.

Certain businesses require federal licenses or permits. Usually those are the ones which activities are governed by federal laws and regulations (e.g. firearms, securities, agriculture, video and television broadcasting, transportation and logistics, etc.). Unfortunately, there is no all-inclusive list of business and relevant licensing requirements since new ideas and ventures emerge all the time. Each federal agency has its own regulations. These agencies are not interrelated. That’s why there is no one resource that covers all sectors. The attorneys, who practice business law, know what agencies govern certain commercial activities and regulatory requirements of each. Do not try to browse the Internet yourself. Forums cannot substitute a consultation with the experienced business lawyer. The lawyer does not only provide you all necessary information but will be able to assist with all necessary filings down the road.

Some states have requirements for specific businesses while other states do not for the same kinds of businesses. Your business lawyer has to check the legal requirements of each state in which you intend to conduct your business in order to properly advise you. Most states post this information on the Department of State website.

To make matters even more complicated, some municipalities require local licenses or permits. Even inside a municipality some regulations may depend on the particular location. For example, if a business is located in Los Angeles, CA or New York, NY or other big city, you’d better check by zip code in addition to the city name.

There are some online tools, which help entrepreneurs to get the basic information what licenses and permits they may need according to the location, industry and business type. These tools can serve as an initial source of information, only the beginning of the research process. You cannot rely on it completely and start building your business without obtaining proper legal advice from a licensed business attorney. In case of a mistake or omission, even if it was not intentional, the fines and penalties for noncompliance with regulations are devastating.

So you want to start selling ice cream in New York? Or you have IT business without physical location but target NY residents in your marketing campaigns? Or you operate countrywide, do not target any particular group, but your activities may be regulated by federal laws? Let me say that not all activities that are regulated by either federal or state laws require a license. Which ones do require it? Do your research and have a consultation with an experienced business attorney before you start investing your time and money.

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