A Federal ID Number Does Not License Everything
Most businesses owners are familiar with their Federal Employment Identification Number, or FEIN. What they aren’t familiar with is that this number does not give you any license to be in business. It only identifies your business with the federal government, similar to a social security number.
Most cities require businesses to have a city business license. Think of it as a license to drive your business within city boundaries. If you drive your business into other cities, you will need a separate license for each. You pick up most license applications at the city’s Planning and Zoning Department.
The main purpose is to regulate what types of businesses are represented in the city. Most cities do not want strip clubs in a residential area. One purpose of such license is to identify who is in the city extracting money from its residents, just in case some business does not follow-through with its promise. For example, if a photographer takes a large deposit from a wedding client and fails to perform or even show up, the client can file a criminal complaint with the city, who will send out police investigators to track the photographer down based on the information on the license application.
There are several other licenses businesses most obtain to be legitimate: State Employment ID numbers, State, County, and City Sales Tax numbers, Federal License numbers, State Regulatory numbers, County Health Permits, etc. A one-hour discussion with your attorney or accountant can identify which license you may need to obtain. Hiring them to obtain a Federal ID Number does not license you for everything.
Joseph M. Tames has been a Certified QuickBooks ProAdvisor since 1999. Joe travels throughout the United States installing, setting up, training, and troubleshooting QuickBooks software and solving accounting and tax-related issues. In his spare time, Joe attempts to solve the photographic properties of exposure and composition. You can reach Joe by phone at 866-293-5974 or by email at josephtames@gmail.com.
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