Posted by Jan Victor Valencia
Feb 09, 2022
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Obtaining the necessary e-commerce business licenses protects your business from possible federal lawsuits and makes you a legitimate online business operator in the U.S.
To comply with these requirements, take note of the following information:
Obtaining the necessary e-commerce business licenses protects your business from possible federal lawsuits and makes you a legitimate online business operator in the U.S.
To comply with these requirements, take note of the following information:
Types of e-commerce licenses in the U.S.
- Federal business license - for businesses regulated by a federal agency.
- State-level business license - this type of license differs from one state to another, so it’s best to check with your state, county and city.
Licenses and permits you may need
- Business Operation License - this license makes your business legal and credible whichever city, country or state you operate in.
- Employer Identification Number (EIN) - EIN is a federal tax ID issued by the Internal Revenue Service (IRS) which lets you separate your personal funds from your business’s finances.
- Doing Business As (DBA) License - a prerequisite if the name of your business is different from your legal name.
- Seller’s Permit - a legal requirement to sell tangible or intangible products online.
- Sales Tax - a prerequisite if you’re selling taxable products and services.
- Home Occupation Permit - if you operate your business at home, this document proves that your day-to-day operations aren’t causing any trouble in your neighborhood.
- Occupational License - this is necessary if you’re offering a professional service such as accounting, that requires a license.
What you need to get these licenses
Make sure to prepare the following before applying for the aforementioned licenses to ensure a smoother application process.
- Business legal structure - Are you a sole proprietor, limited liability corporation (LLC), corporation, or partnership?
- Breakdown of business activities - What is the nature of your business?
- Sales tax license - Do you have the authority to collect and remit state and local states tax?
Business license fees
Most licenses may cost anything between $50 to $400.
Take note that the cost of business licenses depends on your industry and state. Aside from the actual license fee, you may also need to pay for a processing or filing fee. If it has an expiration date, you’ll also need to pay a renewal fee.
Applying for licenses may be a tedious job, but it’s a necessary step to ensure the legality of your online business operations.
If you’re new to the e-commerce industry, let our accounting experts help you stay on top of your finances. D&V Philippines can provide you with the best finance and accounting support to simplify your processes. To learn more, you can download our free guide E-Commerce Accounting Solutions, or get in touch with us today!
