Getting a Business License or Permit

The terms "license" and "permit" seem to mean the same thing on the surface. Each allows you or your business to do something and, in fact, the line between them is a bit blurred. 

Licenses and Permits By Definition 

If you look up the definition of "permit," you'll find that it's a document that authorizes you to do something. The word "license" is mentioned as a synonym. If you look up the definition of a "license," you'll see it defined as a "permit." 

You can get a license to buy a gun, but you need a concealed carry permit. You can get a license to sell liquor or a ​health permit to open a restaurant. You can get a fishing license, but you must have a permit to hunt and kill deer.

Both imply some kind of greater public purpose, usually safety. But despite all this confusion, there are a few ways to distinguish a license from a permit. 

Licensing Implies Competence

A license is granted as permission to do something or use something. In some cases, licensing is granted after some kind of test to make sure that the person receiving the license is capable of doing the activity. A business license does not usually require an examination of any kind, although individuals in many professions are licensed after testing, such as doctors and psychologists.  

Licenses can be granted by a government agency, such as a license to do business in a particular location. Activities which usually require a license include driving or engaging in certain occupations, and these often require passing an exam. 

Licenses can also be sold by individuals or companies. The owner of a trademark or copyright might give someone a license to use that intellectual property in exchange for compensation and possibly royalties.

Permits Imply Inspection

A permit is a type of license that's granted by a government agency. Permits regulate safety and are typically granted following an inspection for building occupancy and health in the case of restaurants and other food service places. Fire safety inspections are common. 

Where Do You Get Business Licenses and Permits?

The first step in getting a business license or permit is to know which your business requires. The Small Business Administration (SBA) has a service called "Permit Me" which allows users to search by zip code and business type to find applicable business licenses and permits for their area.

Federal Licenses and Permits

Businesses operations that are regulated by federal agencies must obtain permits or licenses. A business selling firearms must have a federal firearms sale permit. The SBA also has a list of federal agencies requiring licenses or permits and you can contact each agency through its website. The list includes links for more information on how to obtain these permits or licenses.

State Licenses and Permits

Some state licenses or permits are required for all businesses. A state tax permit is typically required for any entity selling products or services that is subject to state sales tax. The "Permit Me" page has a list of links to state regulatory agencies as well. You can find more information there about general state licenses and permits.

Other state licenses are for professionals such as veterinarians, dentists, cosmetologists, barbers, doctors, and more. Contact your state's professional society for information about licensing if you're in a regulated profession. 

Local Licenses and Permits

Just about every locality in the U.S. has specific licensing and permit requirements. Most cities have zoning permits, health permits, and construction or building permits.