In order to obtain a federal license to start a business, a person must meet several critical criteria. While some details may vary depending on your particular situation and the type of business you are intending to operate, the general terms outlined below should give you an idea of what requirements you will be expected to meet in order to obtain your federal business license.
Surprisingly, when it comes to obtaining a federal business license, the federal license bureaucracy only touches on certain businesses that operate across state lines or that involve specific operations, leaving a great majority of businesses free of having to obtain a federal license. Examples of government agencies that require a federal license include:
- The FDA (Food and Drug Administration), imposes requirements on those in the meat processing industry and the drug industry
- The Department of Transportation. Federal Highway Administration oversees interstate delivery people
- The SEC (U.S. Securities and Exchange Commission), requires those in investment services be licensed
- The FCC (Federal Communications Commission), regulates radio and TV stations
- The Bureau of Alcohol, Tobacco and Firearms. controls the distribution and sale of tobacco products, alcohol and firearms
- The Bureau of Export Administration. issues export licenses
In order to obtain a federal business license you will need to set a business structure, federal law requires business owners to establish himself or herself as a sole proprietorship, LLC, partnership, etc..You will also need to get a business identification number; like a social security number, this Employee Identification Number (EIN) identifies your business to the IRS.
It should be noted that the IRS has extremely specific rules for tax filing (and tax payments) for all types of businesses, and it's crucial to stay on top of them and know what is coming so that you can properly plan to pay your taxes on a quarterly basis, as most businesses do. There may be other requirements involving another type of business license that you may need depending on the work you do and the area in which you live. It is your responsibility to find out exactly what is needed of you when forming a business.
If you have further questions about obtaining a federal license for your business, you may want to consult a business lawyer versed in contract and employment law, or tax law, to walk you through the steps and make sure all of your bases are covered.
Category: Personal Finance