Documentation You Need to Rent a Shop for Business
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This article was updated on 10/25/23.
Looking for a shop for rent near you for your business is an exciting step, but renting a shop comes with regulations you must abide by to keep in line with the law. With how busy it is running a business, it can be easy to put permits and documentation on the back burner.
Part of your retail business plan needs to include looking into relevant business licenses and permits in your area. Failing to follow through with these can suspend your business or cost you money in fees.
Let's take a closer look at the documentation you need to rent a shop for your business.
#1 – An Employer Identification Number (EIN) & Business License
The two primary documents you need for your business are an Employer Identification Number and a Business License.
Employer Identification Numbers identify business entities for tax purposes. These are also known as Federal Tax IDs. The IRS can provide your business an EIN. You won't be able to apply for a business license without an EIN.
However, not all businesses may need to acquire an EIN. If you're renting retail space, you most likely have employees, are a corporation, or a partnership. These are all factors that necessitate an EIN.
Your state may require you to register a business license, but not all states do. State business operating licenses include businesses in the state's taxation issuance. Business licenses are no small aspect and can bring penalties if a company does not have one, even if they have one at a local level but not at a state level when required.
All states require you to have some kind of business license, even if it's not a state-level one. This usually means you will need to prioritize a local business license.
There are also specific business licenses for industries, such as for restaurants and stores selling food. Barbershops and tattoo parlors require their own kind of licensing as well.
And Maybe a Local Business License, Too
Local business operating licenses will depend on where your shop will be within the city's and county's limits. You may not necessarily need to register with the county, but it's necessary to license with the city you're in.
#2 – Name Registration or DBA
DBA or "Doing Business As" is the name attached to your business. Registering your DBA name separates your legal identity from your business entity. Each state may have different DBA requirements. Additionally, not every business operation will need a DBA, but it's best to check if it applies to you in your area.
#3 – An Occupancy Certificate
Along with zoning and safety permits, an occupancy certificate further validates your shop as safe to be in. They also verify that your building is up to date with local zoning regulations for your specific industry.
#4 – A Resale Certificate
Resale certificates are for businesses who buy merchandise, usually wholesale, to sell as part of their operation.
Your business may need multiple resale certificates depending on how many manufacturers or retailers you receive merchandise from. Resale certificates are not the same as resale licenses.
Resale licenses exempt you from paying manufacturers tax for the items you will be buying from them then reselling.
Other Types of Licenses & Certificates You May Need
There are more licenses and certificates you may need depending on your local and state regulations. Preparing for this documentation ahead of time will make the process of setting up shop smooth.
- Environmental licenses/permits: It's more likely that you will have federal and state environmental licenses to handle. Some counties and cities may require an additional local one.
- Zoning and land-use permits: If the area you're setting up shop in isn't already zoned for your business type, then you will have to check upon zoning laws and obtain permits.
- Fire department permits: Fire safety is not the first thing on your mind as a business owner, but cities may require your business to have a license that proves the site has been inspected for fire safety.
- Health permits: Health permits are necessary for businesses involving food and fitness.
- Signage permits: Check to see if your local government has requirements for where and what your business sign looks like.
- Industry-specific licenses: Your industry does determine what you can do with the space you're in, and this is especially true for zoning. Additionally, some industries need special licenses, such as businesses selling alcohol.
It can seem overwhelming to look at a list of necessary licenses in order to run your storefront. However, once your licenses are in order, you won't have to worry about legal implications until it's time to renew.
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