A Founder's Guide to Essential U.S. Business Licenses & Permits

Navigating the world of business licenses can feel like a maze. For founders, understanding which permits are required is a critical step to operating legally and avoiding future penalties. This guide breaks down the most common licenses and permits you'll likely need to launch and grow your startup in the United States.

Disclaimer: This is general information for founders, not legal or tax advice. Rules can change and vary significantly by location and industry. Always confirm requirements with your city, state, and relevant federal agencies before operating.

What Most Startups Will Need 📍​

Regardless of your industry, most businesses need a baseline of local and state permits tied to their physical location and sales activities.

• City or County Business License: Often called a business tax registration certificate, this is a foundational requirement in many jurisdictions. If your company has a physical presence (like an office or employees) or generates revenue within a specific city or county, you'll likely need to register. Prominent examples include the San Francisco Business Registration Certificate, the Los Angeles Business Tax Registration Certificate, and the Seattle Business License Tax Certificate.

• State Sales Tax Permit: If you sell taxable goods or services, you must obtain a sales tax permit from every state where you have a "nexus" (a significant business presence). This permit authorizes you to collect sales tax from customers and remit it to the state.

  • In California, this is a Seller’s Permit from the California Department of Tax and Fee Administration (CDTFA).
  • In New York, it's a Certificate of Authority, which you must apply for at least 20 days before your first taxable sale.
  • Texas requires a Sales Tax Permit from the Texas Comptroller.
  • In Florida, you register to collect sales tax and are then issued an Annual Resale Certificate for making tax-exempt purchases for resale.

• Home-Occupation Permit: If you're running your business from home, check your local zoning regulations. Some cities require a specific permit to ensure your business activities don't disrupt the residential character of the neighborhood, like the home-occupation standards in Seattle.

• Certificate of Occupancy (CO): This is essential for any physical storefront, office, or commercial facility. A CO certifies that the building is safe to occupy and complies with all building codes. It's typically required when you build out a new space or change the designated use of an existing one (e.g., from retail to a restaurant).

• Specialized Physical Permits: Depending on your operations, you may need additional permits for:

  • Signage: Installing exterior signs almost always requires a sign permit from your city's planning or building department.
  • Health: Businesses involved in food, beverages, or other activities impacting public health need a health permit from the county health department.
  • Fire: Operations using hazardous materials, open flames, or hosting large assemblies often need permits or certificates from the local fire department, such as those issued by the LAFD or FDNY.
  • Weights & Measures: If your business uses commercial scales, gas pumps, or other metering devices, you must have them registered and certified by your county or city's weights and measures division.

Industry-Specific Federal and State Licenses ⚖️​

If your startup operates in a regulated industry, you'll need specialized licenses from federal and state agencies in addition to the general permits above.

• Alcohol: To produce, sell, or distribute alcoholic beverages, you need a basic permit from the federal Alcohol and Tobacco Tax and Trade Bureau (TTB) plus a state-level license from an agency like the California Department of Alcoholic Beverage Control (ABC).

• Fintech & Payments: A business that transmits money may need to register as a Money Services Business (MSB) with the federal Financial Crimes Enforcement Network (FinCEN). Crucially, you will also likely need state-by-state Money Transmitter Licenses (MTLs), a complex and lengthy process often managed through the Nationwide Multistate Licensing System (NMLS).

• Investment Advisers & Broker-Dealers: Financial advisers must register with the SEC or state securities authorities via Form ADV. Broker-dealers must become members of the Financial Industry Regulatory Authority (FINRA).

• Exports & Defense: If you export certain goods or technology, you may need a license from the Bureau of Industry and Security (BIS). If you deal in defense-related articles or services listed on the U.S. Munitions List, you must register with the Directorate of Defense Trade Controls (DDTC) under ITAR regulations.

• Radio & Communications: Using radio frequencies for broadcasting, IoT devices, or business operations may require a license from the Federal Communications Commission (FCC).

State Snapshots: How Licensing Varies​

Licensing requirements are not uniform across the U.S. Here’s a look at five key states to illustrate the differences.

• Delaware: Requires a state business license for any entity conducting business within its borders, which can be obtained through the Delaware One Stop portal. Local city and county permits may also be required.
• Texas: Has no statewide general business license. However, you are still required to get a Sales Tax Permit if you sell taxable items, along with any other necessary industry-specific state licenses and local city/county permits.
• California: Does not have a single statewide business license, but the Seller's Permit from the CDTFA is mandatory for taxable sales. Most business licensing is handled at the city and county level.
• New York: Also lacks a general statewide license, but the Certificate of Authority is a must for collecting sales tax. New York City, in particular, has a dense web of industry-specific licenses and permits issued by agencies like the DCWP, DOB, and DOH.
• Florida: Businesses register to collect state sales tax and then use the Annual Resale Certificate. Licensing is primarily handled at the local level through county "business tax receipts."

Quick Decision Checklist for Founders 🚀​

Follow these five steps to determine which licenses you need.

1. Pin Your Footprint: Identify every location where you have an office, employees, or significant sales activity. You will likely need to register your business in each of those cities and counties.
2. Assess Taxable Sales: Determine if you will be selling goods or services that are subject to sales tax in any state. If so, get that state’s sales tax permit before you make your first sale. Remember New York requires a 20-day lead time.
3. Check Home Office Rules: If you're working from home, visit your city's website to confirm local zoning laws and whether a home-occupation permit is required.
4. Plan for Physical Space: If you're leasing or buying a commercial space, budget time and money for a Certificate of Occupancy (CO) and any necessary building, sign, fire, or health permits.
5. Identify Regulated Verticals: Review the industry-specific list above. If your business touches alcohol, finance, exports, or communications, start researching the relevant federal and state agency requirements immediately.

Notes & Common Misconceptions​

• Registrations are not licenses. An EIN (tax ID), a DBA ("doing business as"), a foreign qualification (registering your DE C-Corp to operate in CA), and Beneficial Ownership Information (BOI) filings are all important compliance steps, but they are not operating licenses.
• Incorporating in Delaware doesn't exempt you from licensing elsewhere. You must get licenses where you actually operate. You may even need a Delaware state business license if you are actively conducting business there.
• Texas founders, you're not off the hook. Even without a statewide general license, you are still responsible for obtaining a Sales Tax Permit and all required local permits.

Handy Links​

• SBA: Licenses & permits overview
• San Francisco: Business Registration
• Los Angeles: Business Tax Registration Certificate (BTRC)
• Seattle: Business License Tax Certificate
• California: CDTFA Seller’s Permit
• New York: Register for Certificate of Authority
• Texas: Start a Business Guide (Governor’s Office)
• Florida: Annual Resale Certificate Information
• Delaware: Business License / One-Stop Portal