You have finally formed your company in Delaware and have all the necessary documents from the state! However, depending on the nature of your business, your company might need at least some form of business license, which in return, grants it legal permission to operate in compliance with federal, state, and local guidelines. Therefore, business licenses are needed to operate legally and stay compatible with the city/state/federal authority regulations. This is an additional step for registering your business to the state, and usually, it is obligatory for certain businesses.
Obtaining a business license can take considerable time and resources; it is crucial to know which ones apply to your business and how to get them before the incorporation.
In general, a business license is a permit given by governmental institutions to ensure a business can operate within certain jurisdictions. This type of permit aims to protect the health and safety of the public. It also holds a business responsible for its activities. The licenses a company needs depend on the company's nature of business and other factors such as the products sold, the location of the business, etc. For instance, sales tax licenses are required to sell taxable products; or some products such as guns or alcohol require federal licenses. Moreover, there are different codes for each business type. So you need to be aware of codes and requirements depending on the nature of your business. Therefore, you may need to do prior research.
But, do not panic. Not all have to apply for and acquire a business license from the State of Delaware. Depending on the circumstances, you might not need a business license at all. For instance, if your company operates from a physical place by the nature of your business, you need a business license. But, if you have an online store and do not run through a physical location, you may not need a business license. If you are a non-us resident and operate your business abroad, you might not need a business license. (Even though you may still need to acquire a license depending on other factors, such as the products you sell)
How To Get Business License?
First of all, the process for getting a business license depends on which license you are applying for and the state you are operating in. Therefore, you must have professional help in this process. To get a business license, you can open an account on Delaware One Stop and apply online. ( https://onestop.delaware.gov )
There are two scenarios to get a business license. First, you can file for a license on your own, or you can contact a third-party filing service to help you prepare your business license applications.
- 1. Step - Determine what business licensing you need: Get to know what types of licenses you are required to apply for your business at the federal, state, and local levels. Then, you can contact the relevant agencies located where you plan to operate.
- 2. Step: Make sure you already have a Federal Tax ID Number before applying for licenses.
- 3. Step - Collect the required documents for your application: The documents you need depend on the license type, the nature of your business, and documents listed in relevant regulations. For instance: Copies of company records (e.g., articles of incorporation), proof of ownership, proof of tax status
- 4. Step – Applying: Once you collect the documents you need, it is time to fill out and submit the application. Each application is different, so be sure to follow the instructions. The filing process again may differ from agency to agency. It can be either by mail, in person, or online.
- 5. Step – Renewal: Once you get your business license, you can legally conduct your business. However, the overall process is not over yet. Some licenses must be renewed annually or every two years. Related authorities usually notify companies about each renewal; however, it is primarily the company's responsibility to renew the licenses.
Consequences Of Not Having A Business License
- You may face penalties and additional fees.
- Moreover, the authorities may close your business temporarily or permanently, which will affect your brand negatively.
If you require assistance, we can help you find out what licenses your business needs along with information & forms you are required to provide by sending a unique corporate license pack for you.
