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 would be a license from the city in which you work.
Business licenses are filed in different ways, depending on what city you’re in. At Hyke, we currently aren’t able to help you with that, but we can assist you in other important ways. To start, 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 and knowledge workers, but if your business does things beyond what a freelance knowledge worker does (e.g. 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, as an alternative, you can use services like BusinessLicenses.com and License Logix, as these can help you understand what licenses you’d need for your business. And you could even talk to local law firms, as 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 would be by taking the DIY approach.
This involves researching your city and business license online. So, for example, you might type “business license San Francisco” into a search engine to get information on what you need to do to apply. But 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.
Another example is License Logix. You can simply provide your contact information, and they’ll get back to you to help you with next steps.
Work with a law firm
Most local law firms would be happy to help you determine which business licenses you need, and they might even gladly help you with filing as well. Even though this isn’t the cheapest option, it might be one of the most secure.
Because these law firms typically don’t charge you for an initial consultation, you can access a lot of knowledge and assistance. Then, these firms usually charge you a one-time filing fee, and you’ll need to pay the license fee charged by the city as well.
How can you find a local law firm that could help you? A search online, such as on a site like Yelp, can yield good results.
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, as it will need to be renewed annually (and this includes a fee to renew). So be sure to make a note on your calendar to remind yourself of the deadline for renewing your licenses. Failing to renew on time may result in penalties.
Now that you know a little 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.
Have any questions? Ask us here or email us!
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