Ohio Business License

Before you start a business in Ohio, you’ll need to obtain the necessary business licenses to ensure it can operate legally. Holding an Ohio business license demonstrates your adherence with local, state, and federal rules, thereby affirming the legality of your business endeavors within these areas.

However, many entrepreneurs find this process quite confusing because there’s no one-size-fits-all business license in Ohio. This can make it difficult to know exactly which licenses you need. This article aims to help simplify this process by guiding you through the identification of the licenses you need and the steps you must take to get them.

Do I Need a Business License in Ohio

In Ohio, businesses are required to obtain various licenses and permits at the local, state, and federal levels. Here’s a general breakdown:

Type of Business

Below, we’ve detailed common ways in which your business type can dictate the licenses you’ll be required to obtain, as well as specific examples of these:

• Vendor Licenses: In Ohio, all businesses that sell tangible personal property or taxable services must obtain a vendor’s license in order to collect sales tax. You can register for this license online and complete your business registration using the Ohio Business Gateway
• Professional Licenses: As in many other states, licensing boards in Ohio regulate many professions to foster a minimum level of competency. In such industries (e.g., accountancy, architecture, and real estate), businesses must obtain a specific license in order to operate legally
• Environmental Permits: In Ohio, businesses that may have an impact on the environment due to emissions or the type of materials they handle must secure specific environmental permits. For example, businesses involved in waste management may need to obtain a hazardous waste permit from the Environmental Protection Agency (EPA)

However, this is not the only factor influencing the exact combination of licenses you’ll need — the location of your business within Ohio plays an important role as well.

Location

In this section, we’ve provided a succinct overview of the potential licenses and permits that your business may need due to local, state, and federal requirements:

• Local: Licensing rules can vary widely at the local level, and it’s common for many smaller towns in Ohio to have their own business license requirements. Check the county directory and list of cities and villages on the Ohio Municipal League website to learn more about the rules that apply in your municipality
• State: The state often regulates licenses for specific professions within Ohio, such as businesses associated with construction, accountancy, and liquor. In general, you can obtain and manage these licenses online via the eLicense Ohio system
• Federal: If your business operates within certain industries or does specific types of work, you might need a license from the federal government. These include businesses in the alcohol, aviation, firearms and explosives, radio and television broadcasting, and transportation industries, among others

Since the exact permits and licenses your business will need are entirely unique to your situation, you’ll have to conduct thorough research into your own local, state, and federal regulations to smoothly launch your business.

Alternatively, many entrepreneurs opt to leverage the expertise of third-party services to handle this on their behalf.

How to Get a Business License in Ohio

In order to get your business license(s) in Ohio, you will need to complete the following steps:

• Form Your Business
• Obtain an Employer Identification Number (EIN)
• Apply for the Required Licenses and Permits

Let’s take a look at each step in more detail below.

Step 1: Form Your Business

Before setting out to obtain a business license in Ohio, it’s pivotal that you first choose an appropriate structure for your business. Sole proprietorships, general partnerships, and corporations are all common choices, however it’s often seen as the most advantageous for small businesses in Ohio to register as a Limited Liability Company (LLC). Here are a few reasons for why:

• Limited Liability: Members are protected from personal liability for business debts, safeguarding personal assets
• Tax Benefits: LLCs typically enjoy a pass-through tax treatment, avoiding the double taxation that corporations are subjected to
• Management Flexibility: LLCs allow for flexibility in management structure, either being member-managed or manager-managed based on the preferences outlined in the certificate of formation
• Ease of Formation: With the Ohio Secretary of State providing forms that meet the minimum state law requirements and the option to file online, setting up an LLC is relatively straightforward

Many small business owners opt to avoid the tricky process of forming an LLC by instead leveraging the help of third-party LLC formation services.

Step 2: Obtain an EIN

The second step you’ll need to complete before applying for your business license is to obtain your EIN. This is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses in the United States so that their financial transactions can be identified and tracked.

An EIN is often necessitated when applying for various permits and licenses as it allows local and state governments to ensure your business is operating within the confines of the law. You can obtain it in a number of ways:

• Online: You can apply for your EIN on the IRS’s official website by using the EIN Assistant. You should be granted your EIN shortly after completing this application
• By Fax/Mail: After completing Form SS-4, you can apply for an EIN by submitting it to the IRS via mail or fax
• By Phone: International applicants and businesses located outside US Territories are required to call the IRS at (267) 941-1099 to obtain their EIN — which they should receive during this call

Note: If you are a sole proprietor, you will be able to use your Social Security Number (SSN) instead (as long as you do not have employees).

Step 3: Apply for Licenses and Permits

After settling on the appropriate business structure for your needs and initiating the application for your EIN, the next step is to focus on securing the necessary licenses and permits to operate legally within your locale and industry.

• Local Licenses: It’s important to confirm your local area’s licensing requirements because regulations can differ between even small towns in Ohio. For example, businesses selling food in Columbus need to apply to the Columbus Public Health Department for a food operation service license and/or a retail food establishment license
• Statewide Licenses: Ohio regulates a number of activities and professions at the state level, which requires related businesses to get a specific license to operate legally. One example is a liquor license, which businesses that plan to sell alcohol must obtain from the Ohio Division of Liquor Control
• Federal Licenses: While the federal government doesn’t mandate licenses for general business operations, if your business falls under any government-regulated category, such as agriculture, fishing, firearms, and alcohol sales, it may be required to obtain additional federal licenses or permits

Note: For more information, visit the Licenses & Permits page on the Ohio.gov website to see a full list of the professional and Ohio business licenses available.

Step 4: Renewal of Licenses and Permits

Ohio’s vendor license doesn’t require renewal because it remains valid indefinitely. However, any state-regulated professional licenses or other local licenses your business holds often require renewal, either annually or biennially.

The license renewal process, including the schedule and fees, can vary so remember to consult with the issuing department or agency for specific details on how to stay compliant.

Alternatively, you can use a third-party service or a professional attorney for this process. This can be a good choice if you want to ensure that you avoid potential fines, as well as if you want to be as time-efficient as possible.

How Much is a Business License in Ohio

The total cost of obtaining the business licenses you need in Ohio can vary greatly depending on several factors. These include the type of license, the nature of your business, and whether state or local authorities issue the licenses you need.

While some licenses entail a one-time fee (e.g., the Ohio vendor’s license), others may require periodic renewal fees. This makes it important to research and budget for these costs ahead of time in order to ensure the smooth operation of your business.

For more detailed information on license fees, contact the respective issuing agencies or hire a professional to help you get an accurate estimate.