Although you may need to obtain permits and licenses that are unique to the kind of business you are in, there are several types of regulations that apply to many kinds of enterprises. Be sure to review these categories in light of your own organization.
Business License or Tax Registration Certificate
Many towns and cities require a business license or tax registration certificate for virtually all types of businesses. The purpose of these licenses is to give the local government a means of tracking business activity in its jurisdiction—information that can be used to develop economic data and track economic trends within its boundary. The fees, of course, support a safe, attractive shopping and working environment within the municipal area.
Does every business need a business license?
As an example, one large suburb near Chicago requires that all for-profit businesses that are not required to be licensed by a state or federal regulation must be licensed by the city. An exception is home-based businesses, which are not required to have a license.
If I am a landscaper and I just go into another city to take care of lawns during the day, I will not need a license, will I?
Actually, you might. The same city mentioned above requires that certain businesses which are based outside the city obtain a license if they want to carry out business within its boundaries. These are businesses like landscaping services or those that operate pickup and delivery within the town, such as garbage collection.
Zoning and Building Codes
No matter where your place of business is—from home-based to a sophisticated manufacturing facility—you will need to adhere to local zoning and building codes.
Starting with a simple form, most home-based businesses are regulated primarily with the idea of minimizing disruption in the neighborhood. That means, if your work generates activity from large numbers of people and vehicles, you may encounter restrictions that prevent you from pursuing your business from home. It is possible that you will be required to have a home business permit.
More complex and sophisticated businesses will require close attention to zoning and building ordinances. Zoning and building codes will most likely be enforced by different municipal offices.
What does zoning actually mean?
Zoning rules and regulations direct the use of land, so that is the first area to check when thinking about locating a business. Zoning ordinances break out sections of the city based on commercial, residential, industrial or agricultural uses. Characteristics like building height, noise, parking and open space are regulated through zoning. Your town may require you to obtain a zoning permit before the business can open.
What if I find a great location for my business then find out that zoning rules will not allow me to locate there? Is there any other option besides looking for a new location?
Yes, you can apply for a “variance.” A variance allows you to deviate from the zoning rules on the books in your municipality. If you think your business is suitable for the area where you want to locate, you should ask for a variance. This usually entails presenting your case before the local zoning commission.
Typically, neighbors must be notified that you are seeking a variance, so they have a chance to state their concerns before the zoning board. This is an important part of the process, and you might want to informally communicate with the neighbors beforehand.
What about the actual building that I want to use for my business?
Building ordinances regulate the space that you will actually be using for your office and other facilities. Usually a separate municipal department enforces the building codes. Beginning with a review of your construction plans, they will issue building permits, then conduct periodic inspections during the construction and provide a final sign-off that the space can be used for the purpose you intend.
You will find that building ordinances cover a wide spectrum—things like construction methods and materials, size and setback requirements, even the days and times when construction is allowed to take place. You may need to make sure that your business has access and facilities for the disabled.
Building codes are designed to maintain public health and safety, and they are updated frequently as new products and methods become available.
What does “grandfathering” mean?
When building codes are updated, they often apply only to new construction or changes in tenancy or ownership. That means if you take on a space that someone else has been using, you may be required to make updates to meet the code. It could be a costly mistake to assume that you can continue what the prior owner or tenant has been doing without checking on local ordinances.
TIP: The best ways to find out what local permits and licenses you will need:
- Some larger towns have an organization that deals with helping business startups.
- If you are in a smaller town, you might check with local trade associations or people who operate businesses similar to yours. The Chamber of Commerce could point you in the right direction.
- You can check with the police and fire departments, the health department and your city or town’s tax office. To make sure your place of business will meet local requirements, check with the planning and zoning department as well as the building inspector.