Getting a Business License or Permit

What is a license or permit and how to get one

Getting a Business License or Permit
Getting a Business License or Permit. DNY59/Getty Images

What is the Difference Between a License and a Permit? 

You've heard the terms "license" and "permit" and maybe you have wondered what these terms mean, and about the difference between a license and a permit.

If you look up the definition of a "permit," you'll find that it is a document giving "authorization" to do something, and the word "license" is mentioned as a synonym. 

If you look up the definition of a "license," you'll see it defined as a "permit." \

Examples of the confusion: 

  • You can get a license to buy a gun, but a concealed carry permit
  • You can get a license to sell liquor or a health permit to have a restaurant. 
  • You can get a fishing license, but you must have a permit to kill a deer 

Confusing, I agree. There are some ways to distinguish a license from a permit. Both imply some kind of greater public purpose, usually safety. 

Licensing Implies Competence


license is granted as permission to do something or use something. In some cases, licensing is granted after some kind of test, to make sure that the person receiving the license is capable of doing the activity. A business license does not usually require an examination of any kind. Licenses can be granted by a government agency, such as a license to do business in a particular location.

Activities which usually require a license are driving or occupational licenses (these licenses require an exam), marriage, business, or fishing license (these licenses do not require an exam).

Individuals in many professions are licensed. These licenses are granted only after a test of some kind, as with doctors and psychologists, for example. 

Licenses may also be sold by individuals or companies; for example, the owner of a trademark or copyright may give someone else a license to use that intellectual property in exchange for compensation and possibly royalties.


Too bad a marriage license doesn't require a test or some kind of competence. 

Permits Imply Inspection

permit is another type of license which is granted by a government agency. Permits regulate safety and are typically granted following an inspection.

Permits are granted for building occupancy, for health (restaurants and other food service places) and fire, and for other types of activities, like operating a business which serves liquor.

Where do I get business licenses and permits?

The first step in getting business licenses and permits is to know what licenses and permits your business needs.

General information on permits and licenses

The Small Business Administration (SBA) has a service called "Permit Me," which allows users to search on zip code and business type to find applicable business licenses and permits for their area.

Federal licenses and permits

Businesses operations that are regulated by federal agencies must obtain permits or licenses. For example, a business selling firearms must have a federal firearms sale permit.

The Small Business Administration (SBA) has a list of federal agencies requiring licenses or permits. To obtain a permit or license, contact the agency through its website. The list includes links to the agencies for more information on how to obtain these permits or licenses.

State licenses and permits

Some state licenses or permits are for all businesses. A state tax permit, for example, is required for all businesses selling products or services and subject to state sales tax. The "Permit Me" page has a list of links to state regulatory agencies, where you can find more information about general state licenses and permits.

Other state licenses are for professionals, like veterinarians, dentists, cosmetologists, barbers, doctors, and more. If you are in a regulated profession, contact your state's professional society for information about licensing.

Local licenses and permits

Every locality in the U.S. has specific licensing and permit requirements. Most cities have zoning permits, health permits, and construction or building permits. Read more about local permits

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