Do You Need a Business License After Forming an LLC?

Probably, yes. Forming an LLC creates the company. It doesn’t give the company permission to do business. Most businesses need at least one license or permit from a city or county, and many need more depending on what they do.

Requirements can come from federal, state, county and city authorities at the same time. Check them before you set a launch date. Getting your approved Articles of Organization is a big step, but it doesn’t mean you’re ready to open.

LLC Registration vs. Business License

LLC registration creates a legal entity under state law. A business license gives permission to operate: to carry out a specific activity, at a specific location, under specific conditions.

They come from different agencies and involve different applications. Your state approval doesn’t replace any license required for the work your LLC does.

There’s No Single License for Every LLC

No nationwide business license exists, and most states don’t issue a general one either. Utah, for example, has no statewide general business license. Instead, cities and counties license businesses operating within their boundaries, and state agencies license regulated activities.

So the license you need depends on three things: what you do, where you do it and, sometimes, the premises you use. “Consulting” or “online business” is too broad to answer the question. List the actual services, products and locations, then check each one.

City and County Licenses

Your city, or your county if you’re in an unincorporated area, is usually where you start. Most Utah cities require a business license for businesses operating within city limits, including many home-based businesses.

If you’ll have premises, confirm before signing a lease that the zoning allows your use and whether you’ll need inspections (fire, health or building). A space being listed as “commercial” doesn’t mean it’s suitable for your activity. Customer visits, signs, storage, equipment and building changes can all affect approval.

State and Professional Licenses

Many activities need a state license on top of the local one. In Utah, the Division of Professional Licensing (DOPL) licenses dozens of occupations, from contractors and electricians to cosmetologists and therapists.

Find out whether the license belongs to the person, the business or both. An owner’s personal license doesn’t always cover the LLC. Also check that the LLC structure is allowed for your profession, as some licensed professions have their own entity rules.

If your license depends on one qualified person, plan for what happens if that person leaves. The company’s authorization may not survive their departure.

Federal Licenses

Most small businesses don’t need federal licenses, but certain activities do. These include making or importing alcohol, dealing in firearms, broadcasting and some transportation and agricultural activities. If you’re in one of these sectors, the federal license is usually the longest lead time, so start early.

Home-Based and Online LLCs

Working from home or selling online doesn’t exempt you. Home-based businesses often need a home occupation license, and many cities limit customer visits, employees, signs or storage at a residence.

An online store still has to consider whether its products are regulated, and it may have sales tax obligations in other states once sales pass certain thresholds, even with no physical presence there.

An EIN and a Sales Tax License Aren’t Business Licenses

An EIN is a federal tax ID number. It doesn’t authorize any activity. Our article on whether a single-member LLC needs an EIN covers what it is used for.

Sales tax registration is also separate. In Utah, businesses selling taxable goods or services register with the Utah State Tax Commission before making taxable sales. Whether your products or services are taxable is its own question.

Keep tax registrations and operating licenses clearly labeled in your records, so you can see at a glance what’s done and what’s still outstanding.

Can You Start While a License Is Pending?

Generally not for the activity that requires the license. Applying isn’t the same as being approved. Ask the issuing office what’s still outstanding and whether any temporary permit exists.

You can use the waiting period to set up your bank account, contracts, website and suppliers. Just don’t start the regulated work until you have the approval in hand.

Renewals and Changes

Many licenses expire, often annually. Put renewal dates and any continuing education or inspection requirements on a calendar.

Changes can trigger new applications too: moving to a new location, adding an activity, changing ownership or losing a qualifying professional.

Renewing your LLC’s state registration doesn’t renew its licenses, and renewing a license doesn’t keep the LLC active. Our guide to keeping an LLC in good standing covers the company side.