# Business license

### What type of business license do I need?

Government agencies at the federal, state and local levels issue business licenses, while professional organizations provide certifications and associations.

A business license shows that the company is in compliance with the rules required to obtain a license. Those regulations are in place to protect both your business and customers from liability or harm.

Business licenses are essential tools for companies in almost every industry. Operating without the appropriate license can result in fines and penalties, having your business shut down or even criminal charges. It’s vital to know which licenses you need and how to secure them.

There are six of the most common types of business licenses. Understanding how they work will help you determine which ones you got for KYB submission.

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#### 1. Federal business licenses

Most businesses won’t need a federal license. However, if you make or sell products regulated by the federal government, you may need a license from the applicable federal agency before you start up.

Many of these licenses apply only to larger companies. But if you’re operating in any of the following industries, consider to provide the legal document from those appropriate agencies below:

* Agriculture: If you work with animals, animal products, plants or biotechnology, you may need a license from the [U.S. Department of Agriculture., Opens overlay](https://www.aphis.usda.gov/aphis/resources/permits)
* Broadcasting: If you broadcast via satellite, radio or TV, you need a license from the [Federal Communications Commission, Opens overlay](https://www.fcc.gov/).
* Cargo: Companies that transport people or cargo overseas need a license from the [Federal Maritime Commission, Opens overlay](https://www.fmc.gov/about-the-fmc/bureaus-offices/bureau-of-certification-and-licensing/).
* Transportation: If your business operates an oversized or overweight vehicle, it may need licenses and permits from the [U.S. Department of Transportation, Opens overlay](https://ops.fhwa.dot.gov/freight/sw/permit_report/index.htm#obt).

#### 2. State business licenses

While not all businesses need to register with the federal government, many need state licenses. States issue operating licenses to industries ranging from construction to pet care services.

#### 3. Local business licenses

In some cases, you can also provide county or city business licenses. For example, local agencies often issue permits to businesses that serve food or alcohol.

While license rules vary by city and county, some common local business licenses include:

* Operating licenses
* Building permits
* Zoning and land use permits
* Health licenses and permits
* Signage licenses

#### 4. Professional licenses

The licenses prove you have the necessary knowledge and experience for the job, include:

* Accountants
* Doctors
* Electricians
* Hair stylists
* Insurance agents
* Mechanics
* Nurses
* Plumbers
* Security guards
* Real estate agents

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#### 5. Sales tax licenses

Sales tax licenses refer to the permit required for a business to collect sales tax on products and certain services. Each state or locality has its own regulations regarding the registration and utilization of this license. For businesses engaged in selling goods, obtaining a state tax license is typically necessary.

#### 6. Home-based business licenses

Home-based business licenses, also known as home occupation permits, are permits required for businesses operating from home. For freelancers or consultants, working from home is a common practice. However, certain home-based businesses may need a home occupation permit.

This type of permit typically confirms that your business operations will not negatively impact local traffic, create excessive noise, or cause environmental issues. These permits are usually issued by county and city agencies, so it's essential to check with your local government office for specific information and to apply if required.

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