7 types of business licenses & permits for startups

Starting a business feels like an adventure—until you realize you’ve entered the bureaucratic jungle of licenses and permits. Let’s cut through the red tape and get down to business. 

Here are the key types of business licenses and permits you’ll need to ensure your startup is legal and running smoothly.

1. General business license

This is your basic permission slip to operate. Almost every city or county will require you to have a general business license. 

It’s like a hall pass from your local government to say, “Yes, you can do business here.” Some places may call it a business tax certificate, but it all boils down to the same thing: you need this to get started. 

Without it, your business is operating in the shadows—and that’s no way to thrive.

2. Professional license

Thinking about offering specialized services? You might need a professional license. 

Whether you’re opening a hair salon, offering legal advice, or running a daycare, many professions are regulated at the state or federal level. The government wants to make sure you know what you’re doing before you start offering services that could affect someone’s health, finances, or legal standing. 

Be prepared to prove your expertise.

3. Sales tax permit

If you’re selling products—or even some services—chances are, you’ll need a sales tax permit. This allows you to collect sales tax on behalf of the state. 

It’s not just for brick-and-mortar stores, either. E-commerce businesses often need this permit, depending on where you’re shipping your goods. 

States don’t like being left out when it comes to collecting taxes, so don’t skip this step unless you want to deal with a surprise visit from the tax man.

4. Health and safety permits

If your business involves handling food, hosting customers, or even dealing with flammable materials, you’re going to need a health and safety permit. This typically involves an inspection of your business premises to ensure you’re not a walking hazard. 

Running a restaurant? Expect the health department to come knocking. Selling candles you made at home? You might still need a fire safety check. 

It’s not glamorous, but it keeps everyone safe.

5. Zoning permit

Zoning laws decide what kind of business can operate in different areas. 

If you’re opening a home-based business or moving into a new commercial space, check with the city’s zoning department first. If you start selling products in an area that’s not zoned for it, you could face fines or be forced to shut down. 

Even home-based businesses can be subject to zoning rules, especially if you’re expecting a lot of foot traffic.

6. Sign permit

Ready to put your business name up in lights? Not so fast—you’ll probably need a sign permit. 

Cities have all kinds of rules about signage, from how big your sign can be to where you can place it. In some cases, even the color or lighting could be regulated. 

Getting this wrong could mean fines or being told to take it down. So, before you go all out on a neon masterpiece, make sure you’re legally allowed to do so.

7. Federal licenses (for specific industries)

Not every business will need one of these, but if you’re in a federally regulated industry like broadcasting, alcohol, firearms, or investment advising, you’ll need to check with Uncle Sam. 

The Alcohol and Tobacco Tax and Trade Bureau, the Federal Communications Commission, and other agencies issue federal licenses for businesses that cross into their territories. 

These are non-negotiable—get caught operating without them, and you’re looking at hefty penalties.

So, what’s next?

Licensing might not be the fun part of building a startup, but it’s essential to keep your business running smoothly—and legally. Always check with local, state, and federal agencies to make sure you’ve got all your paperwork in order before the grand opening. With the right licenses in place, you can focus on what really matters: growing your business.