What licenses do I need to start an Online Business? [updated April 2012]

An online business is no different from any other business when it comes to licenses and permits.  Depending on the type of business you conduct, online or offline, you may need certain permits and licenses from three different authorities: the Federal Government, your State Government or your local authorities.

Federal Government permits and licenses are rarely necessary, except for certain types of rather dangerous activities, like drug manufacturing, selling of alcohol and firearms and so forth.

On the state level, as a New York business, you can find out what kind of licenses and permits are required by going to New York's Online Permit Assistance and Licensing web portal, short OPAL.

On OPAL, among the many choices of different business types, there is one type of business labeled "Online Retail Business."

If you go through the questionnaire, you will find out that you need to obtain a Certificate of Authority to Collect Sales Tax.  OPAL also advises that the sale of certain goods may require additional licenses and suggests that you contact GORR (New York State Governor's Office of Regulatory Reform) at 800-342-3464.

On the local level, as a New York City business, you can find information about permits and licenses here.  As far as I can see, they do not require any particular license for the sale of new goods on the internet.

With respect to using your home as a home office in New York City, I wouldn't worry about any permit or license, as long as your business doesn't disturb your neighbors.  But if in doubt, you should consult the New York City Zoning Code, or your town's zoning code, if you don't life in NYC.

By the way, don't hesitate to call all State and City agencies and ask your way through to somebody who seems knowledgeable and get all the information you need.  While there is no guarantee that people give you correct information (is there ever?), these government employees are being paid to help you (for free) and are often very helpful.

Then there is other paperwork that a new business may need to file, even though I wouldn't call that a permit or a license.

For example, corporations and multi-member LLCs must apply for a federal identification number

In addition, any business that conducts its business under a name other than the name of the individual owner, must apply for a "fictitious name certificate" or "business certificate."  In other words, Daphne Danzig selling widgets as Daphne Danzig does not have to get a business certificate.  But Daphne Danzig selling widgets under the name "Ace Widgets" needs to apply for a certificate.  If Daphne Danzig is in New York City, she can get her certificate at the county clerk, 60 Centre Street, for more info see here.  For an entire post on business certificates, see my earlier post on "doing business as".

**This post is for informational purposes only and does not constitute legal advice**

About Imke Ratschko


Imke Ratschko is a New York Attorney helping small businesses, business owners and entrepreneurs with all things "Small Business Law," such as litigation, contracts, business owner disputes, shareholder and operating agreements, sale or purchase of a business, investors, and starting a business. You can reach her at 212.253.1027.

40 comments

  1. Need a business license? I just chanced upon a great website for all your business licenses, tax registration forms and all kinds of permits. Thousands of businesses use their services every day to be in compliance. They cover every business license, permit, and tax registration from a California Business License to a Florida Business License and all-states in-between. I really think that you should check it out! Their website is http://www.businesslicenses.com
    Good Luck!

  2. thanks for the great information.

  3. Need all licenses and tax id numbers to start your business? Here is a great website for all your business licenses, tax registration forms and all permits. This site has served more than 100,000 satisfied customers. They can get you a California Business License or Florida Business License or for any other state. Check out their website at http://www.businessnameusa.com

  4. i think that post is an informative subject..
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  5. nice entry..
    well done

  6. nice entry..
    well done

  7. Excellent advice. As a fellow New York resident, I wish I had read this before starting my own.

  8. I am also a New York resident, and have found your post helpful.
    I was under the impression also that NY was going to have to start charging for digital products, but according to my tax man, if it’s completely digital, no tax required.
    Thank you!

  9. Nice post. I think Every state, county, and municipality has a different set of rules and regulations regarding licensing. There is simply no way to catalog all the requirements for a specific type of business or location.

  10. Its a nice post i ready like it. If you want to talk with any lawyer for you small business.

  11. Good breakdown of a subject that most new business owners, especially online business owners, forget to consider when they start their business.

  12. All the best Ratschko!
    Thank you for posting!

  13. Great post, this advice can be applicable to most countries not just US

  14. I am glad you stressed that just because it is a home based business, the owner needs to treat it exactly as any other responsible small business owner would treat their successful endeavor.
    And don’t forget to Incorporate! That is why we provide that as a free service. The responsible small business owner needs to limit their own personal liability, should there be a few bumps along the way!

  15. i did not know i needed all these. thanks for the information.

  16. thanks for the read valuable information!

  17. This is pretty helpful..

  18. Good information – well done.

  19. According to me to start an online business u do not need any license.

  20. Good Post. So sole proprietors don’t need business licenses, what about professional corporations?
    business-credit-book.savvybox.net

  21. You don’t need so many finances to start an online business in New York, compared to a small business or even an international one. And it’s very profitable, as well.

  22. Hi, I just wanted to thank you for this article. It has definitively cleared a lot of doubts I had.very usefull.

  23. Good post people tend to forget about business law when starting an online business like it is exempt from standard tradional regulations.

  24. Show… I wish I had read it from the earlier stage. Nicely written too, Straight to the point.

  25. really informative post- in the current economic climate online businesses are more cost effective than ever!

  26. Very nice post, far much better than most that I have read. I like the way you mentioned the facts of the matter and the sequence that you followed because that is where it all is.

  27. Very nice post, far much better than most that I have read. I like the way you mentioned the facts of the matter and the sequence that you followed because that is where it all is.

  28. Great Info! Thanks for the post!

  29. The responsible small business owner needs to limit their own personal liability. Thank you so much. This is a good resources

  30. Good subject that most new business owners, especially online business owners.

  31. Wow this is a nice collection. Thanks for sharing.

  32. Lots of specialists tell that personal loans aid people to live their own way, because they are able to feel free to buy needed goods. Furthermore, some banks present credit loan for young and old people.

  33. When you’re in not good state and have no money to get out from that point, you will require to receive the personal loans. Because that would help you definitely. I take student loan every year and feel myself good just because of that.

  34. Various people all over the world take the business loans in different banks, because it’s comfortable and fast.

  35. With respect to using your home as a home office in New York City, I wouldn’t worry about any permit or license

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