Small business owners have a lot on their plate, especially when they’re first starting out. business planyou’ll need to set up shop and learn all you can about your prospective customers’ needs. At the same time, you’ll also be responsible for dealing with the legal aspects of starting a business, including federal, state, and local licensing obligations.
Attorney and Owner in North Carolina Creator’s Law FirmTycora Davis advises business owners to take the time to meet their state’s legal requirements and to think of the process as a risk mitigation measure. “Paying attention to your licensing obligations up front can help you avoid pesky fees that may come up later,” she says. “Making sure you have the proper licenses actually reduces the risk of operating your business.”
Here is an overview of the types of business licenses in North Carolina and how to apply for them.
What is a business license?
A business license is a government-issued document that allows a company to conduct certain activities in a particular jurisdiction. State, local, and federal governments can require a company to obtain one or more licenses to operate legally.
Businesses may also need a permit, which is a specific type of business license intended to protect public health and safety. Local government agencies typically issue permits after an inspection.
What types of business licenses do I need in North Carolina?
North Carolina businesses may require state, local and federal business licenses and permits. Licensing requirements vary depending on your exact location and business activities. Below is a summary of North Carolina business licensing requirements:
Federal Government
Whether you need a federal license depends on your industry. The federal government requires many businesses that operate in federally regulated industries (such as agriculture, transportation, and alcoholic beverages) to obtain a license. U.S. Small Business Administration It maintains a list of federally regulated industries and instructions on how to apply for any required licenses.
state
North Carolina does not have a general state business license requirement. Instead, it administers approximately 950 licenses for specific occupations and business activities. Most businesses need at least one license to do business in the state, and many businesses are subject to multiple state requirements. Here’s a summary of the state’s license types:
- Occupational license. Occupational and professional licenses certify individuals to perform a specific type of work. North Carolina Licensure 319 types of occupations This includes professionals such as architects, doctors, lawyers and hairdressers.
- Business license. North Carolina issues licenses for 498 types of businesses, including alcohol retailers, child care centers, and aquaculture businesses. It also offers 80 hybrid business/occupation licenses.
- Proof of registration. Businesses that lease or sell goods or provide taxable services in North Carolina Proof of Registration (also called a sales permit or sales and use tax number) from the North Carolina Department of Taxation. You use this number to remit sales tax to the state.
local
North Carolina counties and cities may also require businesses to obtain local licenses and permits. Depending on where your business is located, you may need to obtain a general business license or a license or permit to engage in specific business activities. You may also need to follow local zoning regulations. For example, you may need a telecommuting permit to operate a business from home, or you may need an outdoor seating permit to set up tables in front of your coffee shop or restaurant.
How to Apply for Business Licenses and Permits in North Carolina
- Start and register your business
- Obtain an Employer Identification Number
- Apply for a Federal License
- Apply for a state license
- Apply for a local license
- Maintaining your license
Maintaining necessary licenses can help you avoid fines and disruptions to your business. The first step is to understand the requirements that apply to you.
Attorney Tycora Davis recommends business owners start by checking online resources. “The North Carolina Secretary of State’s website has great resources for entrepreneurs and small business owners,” she says. She also says: North Carolina Economic Development Partnershipis a state agency that provides counseling, educational events and other resources for small business owners across the state. “You can call them and they can help you determine if you need a license,” she says.
You can also check out the federal government site. SBA.gov Stay up to date: Here’s how to identify your requirements and apply for the licenses you need.
1. Set up and register your business
The first step is to legally set up your business. Sole proprietorship If you have a limited liability company or general partnership, you do not need to register your business with the state. However, if you want to open a bank account and receive payments in your business name, Business name form (also known as “doing business as” or DBA).
If you are planning to operate Co., Ltd., Limited Liability Company (LLC)or if you’re a limited partnership, register your business with the North Carolina Secretary of State. North Carolina Economic Development Partnership Specific registration instructions and required forms can be found here. You can also apply for a DBA to use a name different from your company’s legal name. For example, a business legally registered as Raleigh Aquatic Nutrition Incorporated could apply for a DBA to operate as “Frank’s Fantastic Food for Fish.”
2. Get an Employer Identification Number
An Employer Identification Number (EIN) is a federally issued number used by the Internal Revenue Service (IRS) to identify your business. If you’re a sole proprietor or LLC owner and don’t plan to hire employees, you’re not legally required to get an EIN, but you can apply for one to separate your personal and business finances. If you don’t get an EIN, you’ll use your Social Security number as your business’ federal taxpayer ID number to file business and personal taxes.
Sole proprietors and all other entities that have employees are required to obtain an EIN. Apply online It’s free and applications are usually processed within minutes.
3. Apply for a Federal License
Please contact us U.S. Small Business Administration Visit this website to determine if you need a federal business license, identify the relevant agency, and access the online application or downloadable forms.
4. Apply for a state license
North Carolina offers a free consultation service to help business owners identify requirements and apply for applicable licenses. North Carolina Economic Development Partnership Talk to a small business advisor North Carolina Business and Occupational License Database View individual licensing requirements and application procedures.
If you sell, rent, or lease tangible personal property or provide taxable services in North Carolina, you must apply for a sales tax number (also called a sales license) from the North Carolina Department of Taxation. Online Business Registration Application Or download and send Form NC-BR (Business Registration Application for Income Tax Withholding, Sales and Use Tax, Other Taxes and Service Charges). Your Account ID number is generally issued immediately for online applications and within 20 business days for mail-in applications.
5. Apply for a local license
of North Carolina Economic Development Partnership We can help you identify local license and permit requirements and connect you with a small business advisor who can help you navigate the application process. Visit your city’s website or contact your city or county clerk for information about requirements and the application process.
6. Maintain your license
Your compliance requirements don’t end with getting a license. You’ll need to renew your licenses, comply with all applicable regulations, and apply for new licenses or permits if your business activities change. Review the state, local, and federal regulations that relate to your type of business to make sure you’re complying with all applicable laws. You can also record renewal times and procedures for each type of license, and set calendar reminders to make sure you don’t miss any renewal deadlines.
NC Business License FAQs
Do I need a business license in North Carolina?
Businesses may be required to obtain federal, state and local licenses and permits. North Carolina requires: North Carolina Economic Development Partnership We help new business owners identify their requirements and apply for the appropriate licenses.
How much does it cost to get a business license in NC?
What steps do I need to take to start a business in NC?
Here’s how to start a business in North Carolina.
1. Register your business (if necessary).
2. Obtain an Employer Identification Number (EIN).
3. Obtain applicable business licenses.
4. Apply for a Sales and Use Tax Number.
5. Maintain licensing and regulatory compliance.
What do I need to apply for a business license in North Carolina?
Required documentation varies depending on the type of license. You may need to submit a business registration form, sales and use tax number, employer identification number (EIN), and other relevant documents to meet application requirements.
