Launching a new business is worth celebrating, but before you open up shop and pop the champagne, make sure you have all the necessary licenses.
“Being proactive can save you a lot of headaches and money in the long run,” says Angelique Edmonds, managing partner at the Edmonds Law Firm in Atlanta.
“If you don't have the right professional license for the work you do, you could receive a cease and desist letter from the city. And if you don't understand the local ordinances that apply to you, you could lose your liquor license. It all depends on where you're located and the nature of your business.”
Here's what you need to know about getting a business license in Georgia.
What is a business license?
A business license is a government-issued document that allows a company to operate in a particular jurisdiction. Federal, state, and local governments can require a company to obtain a general business license or a license related to a specific activity or occupation, such as practicing law or operating a childcare center.
Some businesses may also be required to obtain a permit, often a specific license intended to protect public safety, which is issued after an inspection.
Types of Business Licenses in Georgia
Georgia business owners may need to obtain licenses and pay registration fees from federal, state and local governments to operate a business legally. Here's an overview of the types of licenses required:
Federal License
The federal government requires companies that operate in certain federally regulated industries to obtain a license from the relevant federal agency. Agriculture, mining, alcoholic beverage sales, and transportation are all examples of federally regulated industries. The U.S. Small Business Administration publishes additional information on regulated industries and links to the corresponding agencies.
State License
Georgia does not have blanket business licensing requirements, so requirements vary depending on your location and business activities. You may need to obtain a professional license, a business license, and/or a sales permit from the state. Here are the details for each:
- Sales and Use Tax Registration Certificate. Businesses that sell tangible personal property or taxable services in Georgia must apply for a Sales and Use Tax Registration Certificate with the Georgia Department of Taxation.
Local License
Some local governments in Georgia require you to obtain a general business license at the city, county, or municipal level. Certain business activities (such as selling alcoholic beverages) also require a local permit. You can contact the Georgia Association of Municipalities and the U.S. Chamber of Commerce to get contact information for your local government and inquire about licensing requirements.
How to Apply for a Business License in Georgia
- Register your business
- Obtain an Employer Identification Number
- Apply for a Federal License
- Apply for a state license
- Apply for a local license
Obtaining the necessary licenses can help new businesses avoid fines and disruptions. Attorney Angelique Edmonds suggests business owners take the time to understand the requirements and get legal help in advance.
“I advise my clients to set aside at least a small amount of their start-up costs for legal fees to make sure they're on the right track,” she says. “It will cost you a few hundred dollars, but you'll get advice that will help you prioritize your budget and avoid potential costs and penalties later.”
The following five steps will help you identify your requirements and apply for the licenses you need.
1. Register your business
Some business entities are legally required to register with the Georgia Secretary of State (SOS). If you operate a corporation, partnership (LP), or limited liability company (LLC), visit the Georgia SOS Corporations Division to begin the registration process.
You can register online through the Georgia Service Portal or by mailing in the $10 registration fee. Registered businesses are also required to register annually.
If you operate as a partnership or sole proprietorship, you don't need to register your business with the state. Instead, you can file for a doing business as (DBA) to open a business bank account and receive payments in your business name instead of your personal name.
2. Get an Employer Identification Number
If you operate an entity other than a sole proprietorship or LLC, or if your business has employees, you are required by law to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). You can apply online for free on the IRS website, and your application is usually processed within minutes.
If you run a sole proprietorship or LLC and don't plan on hiring employees, you don't need to get an EIN. You may choose to get an EIN anyway to keep your business and personal finances separate. If you don't get an EIN, use your personal Social Security number as your business's federal tax ID number.
3. Apply for a Federal License
If you operate in a federally regulated industry, you may need to obtain a license from the federal government. For a complete list of regulated industries and links to relevant federal agencies, visit the U.S. Small Business Administration website. For specific licensing requirements and application procedures, refer to the agency's website.
4. Apply for a state license
If you work in a regulated profession or operate a regulated business, you may need to obtain a state license from the relevant professional licensing board. Consult with the Georgia Secretary of State's Licensing Division to verify requirements and apply for any necessary licenses. You can also refer to the Georgia First Stop Business Guide for a complete list of regulated professions.
If you sell taxable goods or services in Georgia, you must apply for a sales and use tax registration certificate with the Georgia Department of Taxation. Businesses with employees may also need to register to pay withholding and unemployment insurance taxes.
You can register for all required tax numbers, permits and licenses through the Georgia Tax Center, a secure online registration portal, which you can also use to make regular payments of required taxes.
5. Apply for a local license
You may need a general business license or a permit to do a specific type of work from your city or county. Some businesses also require local permits, such as an occupancy permit or building permit. Contact your local government officials to find out the requirements and access application procedures. See the directories of the Georgia Association of Cities and Towns and the U.S. Chamber of Commerce for contact information.
Georgia Business License FAQs
Do I need a business license in Georgia?
While Georgia does not require a general business license, you may be required to obtain a federal, state, or local license to operate legally. Specific requirements vary depending on your exact location and business activities.
How much is a business license in GA?
Licensing costs vary depending on the location and type of business, and Georgia's First Stop Business Guide provides an overview of the state's licensing requirements and contact information for the relevant licensing agencies.
