When you're starting a small business, pay attention to your town, city, and county regulations. You may be required to get a business license or tax registration certificate, register a fictitious business name, or comply with zoning ordinances, building codes, or environmental regulations. You can begin by asking city and county officials about license and permit requirements for your business.
For more on federal and state business licenses, see Federal Start-Up Requirements for Small Businesses and State Start-Up Requirements for Small Businesses. For information and links to federal and state small business resources, see Nolo's Small Business Resources page.
Ask Your Bureaucrat
If your city does not have a central office that provides business start-up information (and only a few large ones do), there are bound to be many other offices with lots of helpful information for you:
- the city clerk and the county clerk
- the building and safety department
- the health department
- the planning or zoning department
- the tax office
- the fire department
- the police department, and
- the public works department.
The assessor or treasurer can tell you about local taxes on property, fixtures, equipment, inventory, and income or gross receipts. The health department can advise you about permits and regulations if your business involves food preparation. It also needs to test your water if you work in an area where water comes from wells or goes into septic systems.
The police, fire, or building and safety departments can help you with issues of crowd control and safe exit from your premises. The fire department will also be concerned about combustible materials used or stored on your business premises.
Other sources of information. Other unofficial but often extremely helpful sources of information include: the local chamber of commerce, trade associations, contractors who remodel commercial space, other people with businesses like yours, and lawyers who advise small businesses.
Business Licenses a.k.a. Tax Registration Certificates
In most locations, every business needs a basic business license, sometimes called a tax registration certificate. You usually get the business license from your city or county. However, you may need other permits and licenses as well. No single business license ensures compliance with the numerous licenses, permits, and regulatory requirements that apply to small businesses.
Fictitious Business Names
You may have to register a fictitious business name (the name you do business under, if it does not include your name as the owner) with the county clerk in the county where your business is located. Picking a fictitious business name that no one else is using may involve some research. For more on fictitious business name registration, see Registering Your Business Name.
Before you sign a lease, you absolutely need to know that the space you plan to rent is properly zoned for your usage. If it's not, you'd better make the lease contingent on your getting the property rezoned or on your getting a variance or conditional use permit from the planning department.
In some communities, you must have a zoning compliance permit before you start your business in a given location. Zoning laws may also regulate:
- off-street parking
- water and air quality
- waste disposal, and
- the size, construction, and placement of signs.
If you are looking at property in a historic district, you may even need approval to change the color of paint or to modify the building's exterior.
Keep in mind that you may trigger a zoning compliance investigation when you apply for a construction permit for remodeling or when you file tax information with the municipality.
For more on coping with zoning ordinances, see Dealing With Zoning Problems.
For anything but the most minor renovation, you're likely to need at least one permit from the department that enforces building ordinances and codes. (This is usually called the building and safety department, but sometimes another department, or more than one department, enforces the state building code and the local ordinances.) You may need separate permits for electrical, plumbing, heating, and ventilating work.
Building codes are amended frequently, and each revision seems to put more requirements on the building owner. Municipalities often exempt existing businesses from having to bring their premises "up to code" at each revision. This is sometimes called "grandfathering," which is slang for not applying new rules retroactively.
You may look at space in an older building and figure that you'll have no problems doing business there because the current or most recent tenant didn't. But if the prior occupant was "grandfathered in," the new owner may required to make extensive improvements.
Don't get caught in this trap! An experienced contractor can help you determine the building and safety requirements that apply to a particular space, and the probable costs of compliance.
Increasingly, environmental concerns are being addressed by regional (multi-county) agencies rather than by (or sometimes in addition to) the state or local government. This is particularly true in the following areas:
- air pollution
- waste water discharge or storage, and
- hazardous materials storage or disposal.
Your business may need a permit or license from the regional authority that governs water quality, allocation, or treatment.
Peri H. Pakroo's The Small Business Start-Up Kit: A Step-by-Step Legal Guide (Nolo) provides all the information you need to start your own business, including which permits and licenses you need and how to get them.