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Many times the excitement of starting a new business is blinding – you have planned, hoped and dreamed for the opportunity to start your version of the next Microsoft and simply cannot wait to get started. However, in the enthusiasm of moving forward, you may overlook an important aspect of starting up: getting the correct licenses and permits. In North Carolina, a business must be properly organized, licensed and permitted before beginning operations. Failure to do so could result in the closing of your business. While not a comprehensive discussion of business licensing, this article provides helpful hints for setting up your new business.
There is no general business license that covers every type of business in North Carolina. In addition, there may be separate city, county, and/or state requirements that must be met and more than one license or permit from each. The type of business you wish to operate will determine the number and kind of licenses needed. The number can vary greatly: North Carolina’s Business ServiCenter reports that at the state level some business types require no licenses while other businesses must meet over 700 requirements.
It is your responsibility as the business owner to contact the appropriate authorities and obtain the proper licenses and permits. Unfortunately, there is no “one-stop shop.” However, the State of North Carolina has created a central office to identify the list of licenses and permits needed at the state level; the central office may also provide some assistance with determining local requirements. The Business License Information Office (“BLIO”), a division of the North Carolina Department of Commerce, provides one-on-one consultations to help determine the specific state licenses and permits needed for your business. The BLIO is located in Raleigh, and can be reached by calling (919) 715-2864, or Toll-Free at (800)-228-8443, and by fax at (919) 715-2855.
We strongly recommend that you contact the BLIO and speak with a License Consultant in order to gain an understanding of state licensing requirements. BLIO consultations are free, and if the information provided is incorrect, your reliance on it may protect you from incurring penalties for failure to obtain the proper state license(s). In addition, the BLIO publishes its “Red Book,” a handbook guide for meeting state business licensing requirements.
The BLIO also maintains a list of phone numbers for authorities that can assist in obtaining local licenses. Remember that obtaining a state license does NOT eliminate the need for obtaining local licenses at the county and/or city level. The Red Book provides some guidance for meeting local requirements as well.
In addition to business licenses, individual licenses may also be required for specialized lines of work. You should contact the appropriate state licensing board in order to determine its requirements for the practice of such an occupation or profession. While it is commonly known that traditional professions (accounting, law, medicine) require formal training and a license issued by a state licensing board, there are numerous other “non-traditional” occupations and professions which also have training and licensing requirements.
At the local level, for both cities and counties, there will likely be a privilege license required for the “privilege” of conducting business. For example, with few exceptions, both the City of Charlotte and Mecklenburg County require a business to obtain a privilege license. While the City of Raleigh also requires a privilege license, Wake County does not. Again, there may be other local requirements depending upon the type of business you are operating. In addition to direction provided by the BLIO, the local tax or revenue offices should be able to assist you, either in person or online, with locating and completing the various local applications for required licenses and permits.
The consequences for failing to obtain the appropriate state and local licenses (except where relying on information provided by the BLIO in relation to a state license) range from small fines to fines in the millions of dollars, possible criminal prosecution, and potential termination of the non-licensed business.
Although navigating the mazes and red tape to obtain the appropriate licenses may not be the most enjoyable experience, do it before your Grand Opening quickly becomes a Grand Closing.
Thurston Debnam, who received his undergraduate and law degrees from Wake Forest University, is one of the founding partners of Smith Debnam and the Section Head of the Business Law practice group. He is certified as a civil Superior Court mediator. Thurston concentrates his practice in the areas of business and corporate planning and real estate law, including land use planning and zoning. For more than thirty years, Thurston has maintained a broad-based business practice, assisting clients with business and corporate planning and handling land development and real property issues and transactions....LEARN MORE