What Licenses Are Needed to Start a Restaurant? [2024]

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Updated: February 22nd, 2024

What Licenses Are Needed to Start a Restaurant? [2024]

When starting a business, your permits and licenses are the first to settle. These documents are essential since you're subject to laws and regulations. As such, you need to know what licenses or permits you need, especially when starting a restaurant or any other type of business.

This article is for you if you need clarification on what licenses or permits you need to secure. Here, we'll cover all the licenses you need to start your restaurant. We'll also cover how you can get them to ensure you abide by the law when you open your doors for business.

Without further ado, let's get into it!

Do You Need a License to Start a Restaurant?

All businesses, including restaurants, need a license. As such, if you're planning to open a restaurant, you need to secure whatever type of license is required.

A business license allows a company to operate legally. Since you're bound by law, you'll need a license. Otherwise, you can be subject to paying fines or even forced to stop operating.

To keep it simple, you need a license to start a restaurant to:

Legally run your restaurant
Stay updated on health and safety protocols for a restaurant
Comply with the law you're subjected to when running a restaurant

Types of Licenses Required to Start a Restaurant

When starting a restaurant, you'll need to secure a particular business license. However, if you're unsure, here are the common types of licenses:

General Business License

A general business license is necessary if you're starting a restaurant or any other type of business.

It's a permit you need to legally run a restaurant within your area, whether it's a city, a county, or a state.

While some types of restaurants do not need such, it's still best to secure one. By doing so, you can have a legal document if you need to secure funding opportunities such as loans.

A general business license is your first application permit when starting a restaurant. You can do so at your state's office, the department of revenue, or the agency of your area that regulates businesses.

DBA License

DBA means 'doing business as,' and it's a permit you'll need to secure if you're running your business under a fictional name.

In general, this license doesn't serve any legal purpose. However, it's a must-have if you want to improve your restaurant's brand identity for marketing purposes.

You can acquire your DBA license at the same place where you'll secure your general business license. We recommend applying the two simultaneously to hit two birds with one stone.

Business Tax Identification

When running a restaurant, you'll likely need to file a tax return, and it's an essential document if you need to apply for loans or buy properties.

To have a business tax return, you'll need to get a Business Tax ID. You can use your Social Security number if you're the only owner. However, you can use an employer identification number or EIN if you have a team.

You can apply for a Business Tax Identification through the IRS website or mail; it comes with no fees.

Sales Tax License

A sales tax license or permit is necessary when starting a restaurant, commonly known as a seller's permit. However, it's unnecessary if the state you belong to doesn't impose a sales tax.

You can apply for a sales tax license at your state's Revenue Department or any agency regulating businesses. Depending on your business value, the fee can cost from free to $100.

How To Get a License for Your Restaurant?

One thing to note is that getting a license for a business varies for every state and every type of business. However, you can get licenses through these common steps if you're starting a restaurant.

Register your restaurant

Your restaurant must be established as a legal entity before applying for a license. The permits you apply for may have to be prematurely replaced or amended if you apply too early. As such, it's best to choose the structure of your restaurant and register it with government agencies to get it started.

Apply for a tax ID for your restaurant

All business owners need a tax ID, which you'll also need when getting a business license for your restaurant. You can file taxes with your SSN or EIN if you're the sole owner. However, you must use an EIN if you have a partner or employee. The IRS website or mail are both options for applying.

Get the permits you need for your restaurant

In some counties and states, business owners can only run a restaurant if they secure a permit. However, in most cases, a general business license should be enough. To be sure, you can reach out to your local SBA chapter or state's secretary.

Acquire your restaurant business documents

Every permit application requires its own set of materials. So before applying for a business license, gather the documents for your restaurant. This way, you can have everything you need and won't return to the office twice or thrice if you miss something.

Apply for your restaurant business license

Different rules apply to every state, country, or region. As such, you must head to your state secretary's office to apply for your restaurant license. This way, you'll get to know the requirements, mailing addresses, and websites for filing or registration.

Conclusion

Generally, when applying for a business license for your restaurant, you'll need to know the law that applies to you. However, in most cases, you'll need the essential licenses such as the general business license, the DBA license, the Business Tax ID, and the Sales Tax License or seller's permit.

It can be overwhelming, especially once you inquire about specific requirements at your state secretary's office about your restaurant. However, once you have secured the required licenses, you can start running your business in full compliance with the law.

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Pat Walls

I'm Pat Walls and I created Starter Story - a website dedicated to helping people start businesses. We interview entrepreneurs from around the world about how they started and grew their businesses.

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