What are the types of business licenses?

Starting a business isn’t as easy as simply selling products or services. In many cases, you need a license to start a company. Here are the most common types of business licenses you might need.

What is a business license?

A business license is a legal document that allows you to operate a business in a specific region. It signifies that you’re officially registered with your state or local government and follow all required regulations. Not only does it help the government ensure proper business practices, but it also gives buyers confidence that your company is legitimate.

Common types of business licenses and permits.

There are dozens of types of business licenses — in fact, most businesses are often required to have at least one from their local government. Some of the more common business licenses and permits include:

• General business — This is just a standard license to do business, and almost every state requires one.
• Federal — Some businesses need federal permission to operate. Companies that deal with transportation, TV and radio, logistics, and liquor sales (to name a few) need federal licensing.
• State — Some industries like insurance, medicine, real estate, and other professional services require state licensing to practice. You might see these state licenses displayed on business windows.
• Sales tax — If you sell products, you’re required to collect sales tax on each purchase. A sales tax license allows you to collect sales tax from customers and give it to the government.
• Professional — Certain fields require additional professional business licensing before they can operate. This typically applies to service-based industries like accounting, lawn care, legal counsel, and home improvement, to name a few.

Before starting a business, be sure to research which licenses you’ll need to operate in your area legally. Most agencies send licenses as e-docs, secure digital documents signed with electronic signature software like Adobe Sign. Once you receive your license, you can legally start your business.

Learn what more you can do with Acrobat Pro DC with e-sign to make it easy to sign and send licenses and legal documents.