Last reviewed October 7, 2026 · By the NYBACS advisory team
Short answer
Often yes. Forming an LLC or corporation creates the legal entity, but it does not authorize every activity. Depending on what the company does and where it operates, it may need a city or county business license, state professional or industry licenses, a sales tax permit, zoning or occupancy approval, and federal licenses for regulated activities such as alcohol, firearms, transportation or broadcasting. A company with no US premises or regulated activity may need none.
Key takeaways
- There is no single, general US federal business license; federal licensing applies only to specific regulated activities.
- Licensing is driven by two questions: what activity the company carries out, and where it physically operates.
- Many cities and counties require a general business license or tax registration for businesses located within their limits.
- Professional services such as accounting, law, engineering, healthcare and real estate require individual and sometimes firm-level state licenses.
- A company formed in Delaware or Wyoming that does not operate there generally does not need a local business license in that state.
Why formation and licensing are separate steps
The Secretary of State's approval of your certificate of formation or incorporation confirms the entity exists. It says nothing about whether the entity may sell food, give financial advice, move freight or run a shop at a particular address. Those permissions come from different agencies at federal, state and local level.
For non-US founders this is a common gap: home-country systems sometimes combine registration and licensing in one step. In the US they are separate, and the formation state is often not even the state that licenses the activity.
The three layers of licensing
| Level | Typical examples | Who usually needs it |
|---|---|---|
| Federal | Alcohol production or import (TTB), firearms (ATF), interstate trucking (FMCSA), broadcasting (FCC), certain agricultural imports and aviation | Only companies in those regulated activities |
| State | Professional licenses, contractor licenses, money transmitter licenses, insurance, healthcare facilities, liquor sales, sales tax permits | Companies whose activity the state regulates, or who sell taxable goods |
| Local (city or county) | General business license or business tax registration, home occupation permits, zoning and certificate of occupancy, health permits, signage | Companies with premises or staff in that city or county |
The federal list is short but the consequences of missing it are serious. The state and local lists are long and vary widely, which is where most companies need a structured check.
Activities that commonly need specific licenses
Some business models require licences before the first sale, and the application can take months:
- Payments and money movement. Holding or transmitting customer funds can require state money transmitter licenses and federal registration, unless a licensed partner provides the regulated service.
- Lending and brokerage. Consumer lending, mortgage brokering and securities activity have their own state and federal regimes.
- Food, alcohol and cannabis. Health permits, liquor licenses and, where legal, state cannabis licenses.
- Construction and trades. State or local contractor licenses, often tied to individual qualifications.
- Healthcare and professional services. Licensing usually attaches to the individual professional as well as the business.
- Import and export. Certain products need registrations with agencies such as the FDA, plus customs arrangements.
If your model sits near one of these areas, have the licensing position reviewed by a qualified adviser before launch.
Online and remote businesses
A software, consulting or ecommerce company with no US premises often needs fewer licenses than founders fear. It may need none at the local level, because local licensing usually attaches to a physical location. It may still need a sales tax permit in states where it has nexus, and activity-specific licenses if it touches regulated areas such as payments, telehealth or financial advice.
Once the company signs a lease, opens a warehouse or has an employee working from a home office, the local layer applies in that location, and home-based staff can trigger home occupation rules in some cities.
A practical way to check
- Write a one-paragraph description of exactly what the company sells and how.
- List every US location: offices, warehouses, retail space and employee home offices.
- Check federal agency requirements for the activity, using the SBA's licensing guidance as a starting point.
- Check each state's licensing portal for the activity and the state's sales tax rules.
- Check each city and county where the company has a physical presence.
- Record renewal dates; most licenses expire annually or every two years.
Keep the results in one register that lists each license or permit, the issuing agency, the licensed address, the renewal date and the person responsible. Update it whenever the company opens a new location, launches a new product line or moves an employee. Licensing gaps tend to appear at those moments of change, not during steady operations, and a register makes them visible before a regulator, landlord or bank asks.
Common mistakes to avoid
- Assuming that the certificate of formation is itself a business license.
- Looking only at the formation state's rules when operations are in a different state.
- Overlooking a city business license or tax registration after leasing a local office.
- Launching a payments or lending feature without checking money transmitter or lending licensing.
- Forgetting license renewals, which can lapse silently even when the company stays in good standing.
NYBACS 360° support
How NYBACS helps
- Builds a license and permit inventory based on your activity and each US location.
- Handles general business license and tax registrations at state and local level where needed.
- Flags regulated activities, such as payments or financial services, for review by licensed advisers.
- Tracks license renewals alongside annual reports and tax deadlines.
- Coordinates sales tax permits with your nexus analysis so registrations are not duplicated or missed.
Frequently Asked Questions
Does a Delaware company need a Delaware business license?
Only if it does business in Delaware. Delaware's business license is for companies operating in the state; a Delaware corporation that only maintains a registered agent there generally does not need one.
Is a sales tax permit a business license?
In some states the sales tax permit is the main state-level registration a retailer needs, and people call it a seller's permit or license. It covers sales tax collection only and does not replace activity-specific licenses.
Do I need a license to sell on Amazon to US customers?
Usually no general license is needed to sell through a marketplace, but the products themselves may be regulated, for example food, supplements, cosmetics or electronics, and sales tax obligations still apply where you have nexus.
Does an EIN count as a license?
No. An EIN is a federal tax identification number. It is needed to open bank accounts and file taxes but grants no permission to carry out any activity.
