Natwerk Designs

Do I need a business permit or license?

I want to start up a creative services business and offer things like website design, greeting cards, photography, and DVDs. It will be just me, no employees (for now). And I don't plan on making a lot of money at first, kinda just doing it for fun and for the learning experience. Do I need to have a business permit, tax id, etc for this? I'm going to have a website and business cards, and possibly sell products in local stores. I'm in San Diego, Ca

Public Comments

1. This is a complicated question. A license or permit are always a good idea because they establish history with your company. Regardless of your intentions with your business, if it ends up doing good, you may want to make it full time and that is when you'll see the benefits of getting a license or permit. Good luck.
2. You should get a tax id (you'll need it for things like a bank account) and check to see if your local government has a business permit requirement. These things can usually be done for a very little money, likely under 200 dollars. Contact your local Small Business Administration. They offer free advice to people who are thinking of going into business.
3. You need to find a local government office probably on the state level for licenses and permits. Sigh, if only you listed your area. Try calling your local library system
4. Since you won't have customers coming to your house, you probably do not need a business permit from your city or county. However, you will need to pay business taxes to the state and federal governments, which requires special forms and separate accounting from any other income sources you may have.
5. If it is more than a once or twice a year operation, like a yard sale, you you will need a business permit, registered with both the state and federal government for payment of sales tax, income tax, self employment tax, and filing a laundry list of forms. I recommend toy consult with a good business accountant to help you through this maze of forms and permits.
6. Hi, Robert B here, graphic designer and website designer in Carlsbad. I've done this my whole life. I have never had a license or permit etc. my tax ID is my Social security number. If you are just selling your design services, you probably will be freelancing and people will just write you checks in your name. If you subcontract with an agency or studio they would send you 1099 (tax form) at the end of the year. Even if you sell products to local stores you still could use your name and have them pay you directly. If you are going to sell products on a retail level or use a company name and not your own then you would need a to File an FBN (Ficticious Business Name) and open up a bank account under your companies name. You can file with the San Diego County Recorders office and you can do that online through this link: http://arcc.co.san-diego.ca.us/arcc/ Still no business license would be required. You could get one but it wouldn't be necessary with the type of services or products you would be selling. Hows the surf down there?
7. Contact your local Small Business Administration. They offer free advice to people who are thinking of going into business. Ask about calling your business a "Hobby" for IRS resaons and write off your expenses. But this only good for a few years! (3-5) http://www.eqgroup.com/Library/irs1.htm http://www.meocpa.com/hobby.html Hobby Business Tax Rules Be ready to prove that your hobby is a business if you want to write off your losses. Often a person's hobby or sideline business is a labor of love rather than a reliable source of income. This is most often the case when the business owner or freelancer has other means of financial support -- such as a regular job or a working spouse -- that effectively underwrites the microbusiness. These types of tiny businesses are usually run from home (renting an office would be too expensive) and are often based on semi-recreational activities near and dear to the owner, which has earned them the nickname "hobby businesses." There are as many types of hobby businesses as there are hobbies. A basement jewelry studio, a jazz band for hire, or an antique refinishing business might all qualify. The owners would probably continue to make jewelry, play jazz, or restore antiques without making money, but they are trying to turn their hobbies into profitable businesses -- or at least deduct their hobby-related expenses or losses from their income to lower their tax bill! http://www.nolo.com/article.cfm/objectID/A25BA1FC-11A6-4AD8-B8E08099DD2967C0/111/159/116/ART/ http://www.irs.gov/businesses/small/article/0,,id=99336,00.html
8. The answer is yes to all. Every business is required to have a business license in almost every city, it doesn't matter what business you are doing. I'm sure a lot of home based businesses and sole proprietors do not get business licenses (like Mr. Carlsbad up there) but that is not the law. It's cheap and not hard to do and its the law, so might as well be legit. In my experience, cutting corners is not worth it. So yes, get a "business tax certificate" from the City of San Diego or whatever other city where you live in San Diego County. Get a tax ID number from the IRS. Get a fictitious business name (DBA) for your business from the County, and then go for it.