Even if you managed to survive without a business license when you were a sole proprietor, now that you’re an LLC that’s being taxed as an S Corp, you must have a business license.
Although there are various licenses that you might need, the majority of freelancers actually only need one business license, which is a license from the city where you work.
Business licenses are filed in different ways, depending on what city you’re in.
We’ve prepared this quick self-help article on how to easily get your business license.
1. Find out what license(s) you need
No matter what, you’ll need a business license in your city if you’re running an LLC.
Most of the time, this license is sufficient for freelancers, but if your business does things beyond what a typical freelancer does (like renting out space, decorating a space, or selling beverages), you might need additional licenses.
When in doubt, you can consult with a lawyer (we have a list below that can point you in the right direction). Or, you can use services like BusinessLicenses.com and License Logix, which help you understand what licenses you’d need for your business. And you could even talk to local law firms, since they’ll often be happy to hop on a first call without charging you.
2. Get your license
Once you’ve figured out what business licenses you’re required to get, there are a few ways that you can go about getting them:
Do it yourself
The most affordable way to get a business license is the DIY approachThis involves researching your city and business license online.
For example, you can search “business license San Francisco” to get information on what you need to do to apply.
You might even be able to go directly to your city’s website to get the info you need. Here are a few examples:
Use an online service
Some online services offer assistance when it comes to getting a business license.
A great example is BusinessLicenses.com, where you will find a simple step-by-step process to get your business license online.
Other examples are CSC and License Logix. Just provide your contact information, and they’ll get back to you to help you with the next steps.
Work with a law firm
Most local law firms can help you determine which business licenses you need, and help you with applying for one as well. Even though this isn’t the cheapest option, it might be the most secure.
Because law firms typically don’t charge you for an initial consultation, you can access a lot of knowledge and assistance. Then, firms usually charge you a one-time filing fee, and you’ll need to pay the city’s license fee as well.
How can you find a local law firm that can help you?
An online search on a site like Yelp is a good way to start finding a reputable law firm.
Here are a couple of law firms that we’ve heard positive things about in California (we don’t have an affiliation with these firms):
3. Renew your licenses
Once you get a business license, you aren’t done. Your license will need to be renewed annually (and this includes an annual renewal fee).
Be sure to make a note on your calendar to remind yourself of the renewal deadline for your licenses. Failing to renew on time may result in penalties.
Ready to get your license? Collective can help!
Collective is tax deductible and starts paying for itself in less than 2 months.Tax savings for the self-employed
From formation to taxes, you get all support you need for one affordable monthly price.
Now that you know more about the importance of having a business license, and how to get the right one, it’s up to you to take the appropriate steps to ensure you have everything you need to legally operate your freelance business. And, if you need help, Collective is here whenever you need assistance.
Ugur Kaner is the co-founder and CEO of Hyke, the online platform that helps freelancers save $15,000 or more in taxes every year
