The first thing every entrepreneur should know is that if you are going to run a business, you will need one form of licensing or another. Yes, in some regions, the licensing requirements for running an eCommerce business might differ slightly from the kind of license you might need for a brick and mortar store, but you will still need one. So, if you are still asking yourself ‘Do I Need a Business License for a Web-Based Store?’ The answer is yes. It’s now just a matter of finding out what kind of rules apply to where you are located. E-Commerce Software Apps
Why you need a license
The whole point of having a business license for your eCommerce store is so that:
- The tax man can keep track of your revenue for taxation purposes
- Other business and potential clients can see that you are a legitimate business entity and thus have achieved a certain level of trustworthiness
- It enables you to claim any applicable tax deductions
- Gives you some standing ground with investors and financiers
When do I need to apply?
The situation is different in every single region. In the U.S some states only require you to have a license once you hit a certain revenue threshold while there are others that need you to have a license as soon as you set up your online platform. The best thing for you to do at this time is to find out what kind of rules and regulations apply to your region at the SBA website.
On this website, you will find pertinent information on what kind of business licenses and permits you will need. You will also find out what procedures and requirements come into play for you to acquire said licenses and permits. You will also get to know whether or not you actually need a license to operate your specific type of eCommerce store.
Another important factor is to find out where you need to go to get your licenses or permits if you are required to have them. In many cases, you will find that you can get these documents online. The application process would be simple, and you may even get it all done online.
What you might need to get a business license for your eCommerce store
As stated earlier, every State and region is different. In most cases, you will find that you are required to:
- Illustrate the legal structure of your business. Are you a limited liability company or are you a sole proprietor?
- Give a detailed description of what business activities you intend to undertake
- Obtain a sales tax license from your local State agency
- Verify that you have had the required inspections done as well as obtained all the necessary additional permits such as fire code inspections or liquor licenses
What about business zoning laws?
In most cases, before you can obtain a business license for your eCommerce business, your local State agency might need to conduct a zoning review of your location. In other cases, however, all you have to do is produce a zoning permit. This is just to ensure that you can operate a business out of your home office. It is highly unlikely that eCommerce business owners operating from home will find challenges here because most locations have rather lax zoning issues with which you must contend as a home business owner. Despite that fact, there are still some things that you to keep in mind.
Zoning laws get tricky in the following scenarios:
- If you have to make physical changes to your home’s appearance thus affecting the overall appearance of the neighborhood. Things such as signage and renovations
- If there will be lots of human traffic in and out of your home. Be it employees or business customers
- If there will be a lot of nuisances such as odor or noise coming from your home as a result of the business
Even though an online business conducts its affairs and deals with clients from different States and different parts of the world, you would only need to obtain a license from your local area of operation. The legal term for your base of operations (whether you are working from your bedroom at home or from a warehouse somewhere) is ‘nexus.’ Where this ‘nexus’ is located will determine what kind of licenses and permits you need. Should you decide to open up another nexus in a different city or state, you will also need to find out what kind of laws prevail in that locale as far as eCommerce is concerned.
It’s critical that you start things off in the right manner. Even though it is quite easy for an eCommerce entrepreneur to start and operate a business without the required permits, if you are looking for legitimacy and to avoid any future State fines and maybe even jail time, it is best to get the necessary licenses from the start. Click here Ecommerce Marketing