Steps to Starting A Business, Step Three: The Business License (3 of 5)

Written by Tammy Durden

Business License

(Part 2 of 2 of the Business License Stage)

I am finishing up discussing the Business License, as part of the Steps to Starting A Business.  This is part 2 of 2 in the Business License discussion.  Part 1 of the business license discussed the definition, process and research.  The next step in filing the business license is to indicate what type of structure the business is.  This is where Steps to Starting a Business picks up today.

Company Structure

After you have entered the business name and it clears the registry, more than likely you will get another link that says something about forming an LLC (or choosing another business type). Click on the link that applies to the structure that matches the company you are forming.  Choosing the structure of the business was discussed in the Step One of Starting A Business.

“Of all the choices you make when starting a business,  one of the most important is the type of legal structure you select for your company.”

Quote by: Ameen Khwaja|Entrepreneur Magazine

Types of Business Structures

As a review, however, these are some of the possible business structures:

  • Sole Proprietorship
  • Limited Liability Company
  • Cooperative
  • Corporation
  • Partnership
  • S Corporation

When I began writing this series, I had formulated a guess as to which type of business structure I thought was most commonly chosen.

Can you guess which type of company structure is the most common in the United States?

I thought LLC (Limited Liability Corporation) was probably the most common type of business formed. My reasoning was that most business owners today do not want to risk their personal information or belongings by having it attached to their business.  What was your guess?


You can imagine my surprise, however, when I discovered that Sole Proprietor is the most common business structure chosen or filed, according to Entrepreneur online magazine.  Was Your Guess Right?

Another great resource to help in choosing the structure of the business is the U.S. Government page on Small Business that defines each type.  Keep in mind if you decide to be ‘DBA’ (Doing Business As ________ your company name ), you will not need to file incorporation papers (always be sure to check with your Country, State, City, County, etc… to be certain).


Filling out the forms & Payment

After finding the type of business structure, be sure to follow the corresponding link to complete the online paperwork.  The alternative, of course, is to print the forms out and fill them in, to finish up the process of obtaining a business license.  You may always consult or have a lawyer or CPA complete them for an additional fee as well.

The Cost of the business license, most of the time, is nominal, even under $100 or less. Keeping in mind that every State is different and may charge more or less.  A colleague recently expressed that their State charged nearly $500! That seems a bit extreme to me!  Be sure to do the research prior to starting the business.  It is important to look up all of this on the State (or Country ) Small Business page site prior to actually filing the paperwork, so that you are prepared for all costs involved.

Other Odds and Ends

You may also need to submit the ‘Articles of Incorporation’ with your initial paperwork.  If this is needed, you can either hire a lawyer to file these or find documents online (through an online legal site that offers various legal documents). I think, however, it is wise to obtain a lawyer during this beginning phase of the business.  It will help the business start off on the right foot and not have to backtrack later. It is also a good idea because then everything is spelled out properly. [Another Hint: If you hire a lawyer, you should also have them review any contracts you plan to use.]


Now, wait for the license to arrive in the mail and proudly display it in your new business, on one of your company’s walls.  I know I do and although I work virtually (mostly), it reminds me, even sitting in our office (even if just me), that we have ‘done it’!

I have been a business owner for over 9 years now, but it is still an amazingly wonderful thing to realize your dream of owning a business.  Do not let this seem minimal.  Do you realize how many people would give anything to be their ‘own boss’ and own their own business?  Remember to look at it every once in a while, especially on those hard days we all have, to remind yourself – you are doing it!

One other note:  You will receive a UBI (Unified Business Identifier) when you file a Business License Application for your State.

“The Departments of Revenue, Business Licensing Service, Employment Security, Labor and Industries, and the Corporations Division of the Secretary of State are among the state agencies participating in the UBI program.”*

Make sure, before that first client or customer, that you have all of your licenses and paperwork in order. Remember to check with your County and State, as some Counties require you to file with them as well.

How Are You Doing?

How you are doing so far?  I know this is a very simple view of starting a business. One small step at a time, but sometimes this is a good way to do it, so it does not seem overwhelming.

I appreciate those who have given comments, whether here or on our social platforms. Please continue to give us feedback and insight into how you began your business.  What was the very first thing you did? What was the final thing you did before opening the ‘proverbial’ doors?  Would love your feedback.


Tammy S Durden

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