A business license is not the same as forming an LLC (limited liability company) or other legal business entity. An LLC is a legally recognized business entity, while a business license gives you permission to participate in a specific type of business in a given jurisdiction. They serve separate purposes and a business license cannot be replaced by an LLC. Both are necessary if you want to legally operate an LLC in a given city, county, or state.
The sales tax authority certificate is renewable at the discretion of the Department of Taxation and Finance. Vendors are randomly selected by the state for renewal and a notification letter with instructions is then mailed to them. The IRS issues an Employer Identification Number (EIN) to identify and track businesses, but does not grant them a license to operate. How to Create a Nonprofit Organization in New York.
Understand State Licenses and Permits Visit the New York State Business Assistant to determine the requirements for your business and request the correct license or permit. Apply for a sales tax authority certificate from the New York State Department of Taxation and Finance. Some types of business entities require a DBA or doing business as a name, but you won't need it when you create an LLC in New York. In fact, if you decide that you would like to operate under a name other than your business name, you will need to file a Certificate of Assumed Name with the New York Department of State.
Not all types of businesses require a business license. Most businesses that sell goods and others that sell some services require a certificate of authority, which is a sales tax certificate used to collect and pay applicable sales taxes. Some companies that provide professional services must obtain a professional license. The New York Office of Professions offers a list of licensed professionals (such as doctors, lawyers and CPAs).
Licensed professions (such as barbers and home inspectors) are on the New York government site. Because a standard business license is not required in New York, business owners will need to dig a little deeper to find out if their business requires a business license. Know that most businesses that sell products will need a sales tax certificate and, if you are a professional, you may need a license to operate. A limited liability company (LLC) is a business entity, not a license.
Provides the legal framework that allows a company to operate in the state. Depending on the type of business, a company may also need to obtain a business license, such as a sales tax certificate or professional license. Learn more about creating an LLC in New York. Kimberlee Leonard has taken her professional experience as an insurance agency owner and financial advisor and has translated it into a financial writing career that helps business owners and professionals succeed.
If you have a business license but don't have an LLC or other legal business entity, you can still operate your business as a sole owner. The New York State Business Express Assistant can help you identify licensing regulations for your business. It's always a good idea to check the website of the city and county where your business is located for possible additional licensing requirements. While you don't need to file your LLC operating agreement with New York State, and because the State Department admits that the law doesn't indicate the consequences of not adopting an operating agreement, you'll still want to create one to form the backbone of your business.
The New York Business Express website provides more information on various state licenses and how to obtain them. Before you open your business, there is a wealth of information and resources for you to determine the best way forward. It is recommended that you obtain the required business licenses and permits before engaging in any business activity to ensure that you fully comply with local regulations. You'll use your LLC's EIN when filing your business taxes; sometimes, an EIN is also necessary when opening a business bank account or applying for business loans.
In addition, New York requires companies in certain professions to also purchase specific licenses. If you have an LLC and you don't have a business license, you put your company at risk of incurring a penalty (financial or legal) if it is found to violate local regulations. A seller's permit, which may or may not be needed where you operate, gives the company permission to participate in the sales aspect of the business. The New York State Licensing Center lists the various licenses issued by the state, including many related to business.
If your business belongs to a highly regulated industry, such as food service or child care, you will likely need a special permit to operate. Professional business licenses that are issued through the Department of State have several renewal policies. Prior to joining the Forbes Advisor team, Cassie was Director of Content Operations and Director of Copywriting at Fit Small Business. .