First off, let’s take a deep breath, friend. If you are looking to open a brick-and-mortar business and you are unsure where to start, then you are in the right place. Legal documents can be overwhelming and frustrating. That’s why we are laying it all out for you. So, grab your favorite beverage and a cozy blanket, and let’s dive in. Whoosah, you got this!
Real quick, while we tried to put together a comprehensive list, state, county, and local license requirements differ depending on where your business will be operating. While this list is a great place to start, be sure to also check your state, local, and country requirements.
Basic Business Operation License
Depending on your state or industry, you may be required to obtain a business license to open and operate your brick-and-mortar business. Here you can find a list of business license requirements by state.
LLC stands for limited liability company. An LLC is the most popular business structure chosen by small business owners. Forming an LLC is the simplest way of structuring your business to protect your personal assets in the event your business is… dun, dun, dun..sued. There are three types of LLC structures including Corporations, General Partnerships, and Sole Proprietorships. To figure out which one is right for you, take a read here. How you form your LLC can affect your taxes, so also check with your accountant to confirm the best option for you.
There are companies such as Legal Zoom and Zen Business that will simplify the process for you and file your LLC and EIN, which we are about to discuss next, on your behalf. If you are looking to save some moolah and don’t mind the paperwork, check out the step-by-step process for each state here.
Federal Employer Identification Number (EIN)
An Employer Identification Number, also known as an EIN, is essentially a Social Security number for your business. Fancy, huh? This unique nine-digit number allows the Internal Revenue Service to identify businesses for tax reporting. You will need to have a legal business name and date of formation when applying, that is why it is important to form your LLC prior to obtaining an EIN. If you are applying for an EIN yourself, you can apply here.
Fictitious Business Name Permit and Doing Business As
The reasons for doing business under a different name, while it may sound odd, are many. This is accomplished by filing a fictitious business name (FBN) or a “doing business as” (DBA) form at the city or county level. Often, an assumed name is referred to as a FBN or DBA and the terms are interchangeable. Every state, city, and county will have different filing requirements so it’s best to visit the city or county site to see what those requirements are.
Sales Tax License
Almost any business that sells goods or taxable services will need a sales tax license. You can easily search your state’s sales tax permit application online. By not doing so, you may face sanctions or other types of pesky penalties. Jump on getting that permit so Uncle Sam can get his cut.
Health Department Permit
If you want to sell or prepare food, you will also need to obtain relevant health department permits. These permit approvals can be very specific to where you are located and often have many tedious requirements. Therefore, I recomend looking into your local health permit requirements EARLY so that you don’t have any surprises when it comes to obtaining permit approval.
Fire Department Permits
Fire department permits are issued by the local fire department to allow certain activities. In general, fire permits give permission to: use a building and conduct certain activities that will cause conditions that may present a hazard to people or property. Local fire departments have their own set of rules on issuing fire permits, so regulations vary from locality to locality. Contact your City Hall to apply. Pro Tip: Make sure your fire extinguishers on site are less than a year old prior to your inspection. You’re welcome!
State-Issued Professional or Occupational License
Before you open your doors to the public, you will need an Occupational License. Typically, this license involves inspections to ensure your business is safe for the public. Give your local inspections department a call prior to your inspection to obtain a checklist of standards/requirements. This can save you time and a headache. Trust us, we know from experience.
There you have it. Not so bad after all, eh?! Okay… it is a lengthy list that does take some time, but hopefully this article provides some assistance on how to navigate legal documents needed to open a brick-and-mortar business. The most important thing to remember when it comes to legal documents is not to put them off. Obtaining these documents and permits takes time and the last thing you need to be waiting on to open your doors is one of the items above. Get started today, my friend. We believe in you.
At Brick N’ Mortar, we are obsessed with helping startups and small businesses that want to open a physical storefront. Our mission is to teach small business owners how to build and sustain profitable, long-lasting brick-and-mortar businesses.
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