While there is no “one size fits all” business license for Pennsylvania, there are many licenses, permits, and registrations which may apply to your business. You should carefully research and consider these permits before you start operations.
PA Sales Tax License
Most businesses which sell any goods or services in Pennsylvania, must obtain a sales tax license. A sales tax license is required to collect sales tax which must be paid to the Pennsylvania Department of Revenue. If you are unsure if your business is subject to sales tax, contact an account BEFORE you begin providing any goods or services. To obtain a sales tax license, you must complete the PA Enterprise Registration Form (PA-100). Also, you may have to collect additional types of taxes such as Liquid Fuel Tax, Road tax, or Unemployment Compensation.
Other Types of Licensing and Permitting
Many trades and professions require a specific license for the company or its individual employees to operate such as Engineers, CPAs, or Attorneys. If you are licensed as part of your profession, check carefully and confirm whether the entity you create must be licensed as well. There are also less obvious trades which require a license. Many business owners don’t know they must be licensed. For example, hair braiding requires a professional licenses and is subject to health requirements and inspections. Other professions are surprisingly unregulated by the state. Currently, Pennsylvania does not licenses tattoo artists or tattoo parlors. If you are unsure about the licensing requirements for your business, contact the Department of States Bureau of Occupational Affairs for more information.
Food and Restaurant Licensing
Retail food and beverage facilities such as restaurants, bars, and convenient stores are need a Retail Food License. The Pennsylvania Department of Agriculture issues these licenses. There are very strict requirements for food preparation, storage and service. Study these requirements carefully before making any renovations or construction plans on a facility if you plan on preparing food. Not all stores that sell food need a license if the food is pre-packaged and shelf-stable.
There may be additional licensing, permitting, or inspection requirements implemented at the county level. Before taking any additional steps, contact the county and township that the business will be located in and confirm if there are any local tax, zoning, licensing, or permitting requirements.
Business owners often overlook zoning and land use issues. Zoning issues can quickly leave a business dead in the water. Do not assume that your planned use for the property is allowed, even if the prior owner was operating the same type of business. A building with a commercial garage may not be permitted for use as a used car dealership, or a small office may not be suitable for retail space. For more information contact the township zoning officer. You can always get a second opinion from a real estate or zoning law attorney if there is a question.
Register a Fictitious Name
A fictitious name often called a Trade Name or a DBA (doing business as) is a way for a business to operate under a different name. For example John Smith, rather than operating as Smith’s Landscaping, could register a fictitious name and operate under “The Lawn Doctor.” Individuals, Partnerships, LLCs, and Corporations can use fictitious names. Many larger corporations use fictitious names. A good example is Doctor’s Associates, Inc., better known by their fictitious name “Subway.” Google is a fictitious name held by Google, LLC, a wholly owned subsidiary of Alphabet, Inc. A fictitious name can be beneficial for marketing or naming purposes. Fictitious names however, offer no liability protection. A name will not separate you personally from your business. If your business is ever involved in a lawsuit, the fictitious name will not protect your personal assets.
Setting up a Corporation or LLC
One of the most important factors in setting up a business is deciding how you will operate the business. There are several types of business structures (see What Type of Entity Should I Use?), all of which have benefits and draw-backs. If you want to set up an LLC or Corporation check out our in-depth article on the topic.