Guide · 1 min read
Business licences: finding what actually applies to you
Forming a company gives you an entity, not permission to operate. Those are different things, and licensed trades get fined for confusing them.
The short answer
US business licence requirements are set at federal, state, county and city level and depend on the activity rather than the entity type. Forming an LLC does not license you to do anything. Most online businesses need few or no licences; regulated trades need them regardless of structure.
Four levels, checked in order
- Federal — only for specific regulated activities: alcohol, firearms, aviation, broadcasting, transport, investment advice and similar.
- State — professional licensing and many trade activities. Also where sales tax registration sits.
- County — varies widely; often relevant to physical premises.
- City — general business licences and zoning, particularly for anything customer-facing or operating from premises.
The common cases
| Business | Typically needs |
|---|---|
| Software or digital products sold online | Often nothing beyond registration and sales tax where applicable |
| Consulting in an unregulated field | Often nothing; a city business licence if you have premises |
| Reselling physical goods | Sales tax permit where you have nexus |
| Regulated professions | State professional licence, regardless of entity |
| Food, alcohol, firearms, transport | Federal and state licensing |
For the recurring filings that apply to every entity regardless of licensing, see compliance.
Frequently asked questions
- Do I need a business licence for an online business?
- Often none federally, but it depends on what you sell and where you operate from. Selling regulated goods, giving regulated advice, or operating from a physical location can all trigger requirements. Selling digital products to customers worldwide from abroad typically triggers few.
- Does forming an LLC license my business?
- No. Formation creates a legal entity. Licensing is permission to conduct a specific activity in a specific place. A licensed trade operating through an unlicensed LLC is still operating unlicensed.
- How do I find what applies?
- Work down the levels: federal agencies for regulated activities, then the state where you operate, then county and city. The SBA maintains a starting point, but the authoritative answer is always the issuing agency.
Sources
Last reviewed . Verify against the primary source before acting.
Founders 8 tracks obligations and deadlines for your reference. It does not provide legal or tax advice — filings are prepared and reviewed by qualified partners.
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