Do You Need a Home Business License?

Do You Need a Home Business License?     

Many people who start a business from home labor under the misconception that they don’t need a license. However, failing to comply with government regulations can cause your business to become shut down after it has become successful.

You need to invest time and a small amount of money in the necessary permit, depending on your business type. Getting your home business license validates your business and facilitates the process of getting the required documents to apply for a business loan or merchant account.

Basic Licenses

The basic license you need to operate a business from home is a general business license. This type of license can vary by city, county or municipality. With the basic license in place, you may conduct local business activities. Moreover, your local tax office can provide information on this too. The license may be designated as a reseller’s certificate or a business tax certificate.

You might need to check if your business complies with zoning laws. Some neighborhoods place limits on home business operations. If your business does not fulfill neighborhood requirements or local zoning ordinances, you might be able to get an exception.

Health and Safety

You might also need a permit from the fire department, depending on your type of business. It is highly likely you will need one if your clients or customers come to do business in your home. If you are selling goods or services online, it is not usually required, unless you are selling flammable or otherwise hazardous products.


You might wish to put up advertising or signage to alert people to the fact that your business exists. All signs must comply with local ordinances. Almost every city or district has certain rules governing the type, size, and location of commercial signs. There are usually restrictions on sign lighting. Apart from local laws, many condos, complexes, or homeowners associations place restrictions on business signage. If you rent your home, you need to ask your landlord for permission to put signs up. If not, check your property documents and ask your homeowners association if there is one.

Professional License

Legal services, daycare centers, beauty parlors, and other types of home-based businesses require state or federal professional certification or licensing. Get in touch with the local business authority or check their website to see what kind of businesses need a professional license issued.

Sales Tax License

In some areas, general business licenses incorporate sales tax licenses. In others, you need to get a separate sales tax license issued. Ask your local business office if you need a sales tax license and where to obtain it. In addition, you might need to apply from a local or state authority. Keep in mind that in some jurisdictions, it is a criminal violation to run a business without a sales tax license.

Wrap Up

Running your business from home can give you flexibility, autonomy, and income levels beyond your wildest dreams. All you need to make it happen is the desire and the proper documentation. To truly enjoy the benefits of a home business, you need to ensure it complies with relevant regulations. However, it is usually affordable and easy to obtain a business license. Look for information about registering your home business by visiting your district or city’s website or make a call. You can also check the Small Business Administration (SBA) website, where you can find a wealth of resources on this topic, categorized by state. You could register online as well.

You also need to establish what structure your business will have and choose a name for it before applying for a business license. Typically, the steps to get a license involve filling out a form with your business data, paying a small fee, and showing up to pick up the documents. You’re in business as soon as you have your license. You will pay taxes and a fee based on your revenue each year you’re in business.


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