How to Get a Business License in PA

By: M. Zane Johnson, Esq.

When you’re in the early stages of launching your business, there’s no shortage of things on your plate. From nailing down your product or service to figuring out how to market your brand, every decision feels monumental. But before you can officially hang up your “open for business” sign, you’ll need to tackle a critical step: getting your business licensed.

If you’re starting a business in Pennsylvania, or even just thinking about it, this simple guide is for you. I’ll walk you through what you need to know about business licensing in PA—whether you’re operating in a big city like Philly or a smaller town—and make sure you know exactly what steps to take to stay compliant.

Ready to dive in? Let’s get to it!

Understanding Business Licensing in Pennsylvania

Before we dive into the steps, let’s get clear on the basics: What is a business license, and why do you need one?

What Is a Business License?

A business license is essentially a permission slip from the government to engage in a particular business activity. There are many different types of licenses, but at the end of the day they all serve one of two purposes. First, they allow state and local municipalities to regulate businesses, and ensure that they’re operating responsibly. And second, they help governments track businesses so that they know who to collect taxes from at the end of the year.

State vs. Local Requirements

Here’s where things get tricky. There is no statewide general business license in Pennsylvania. The state only issues licenses for particular industries and business activity. For example, you would need a license from the state to operate a daycare, sell alcohol, or collect sales tax. Conversely, cities and towns may require a general business license in addition to requiring licenses or permits for certain business activities (e.g., food service).

This often creates confusion for business owners. But here’s what you need to remember. When it comes to determining the license and permitting requirements that apply to your business, the two most important factors are (1) your industry and business activity and (2) location.

That’s why it’s important to know not just what Pennsylvania requires but also what your city or township expects from you.

Types of Business Licenses

There are several types of business licenses that may apply to your Pennsylvania based business. Here are some common categories:

General business licenses: Often referred to as a business privilege license. There’s no statewide general business license. However, they are required by many cities and municipalities.
Sales tax license: Businesses that are required to collect sales tax must first obtain a PA sales tax permit.
Industry specific licenses: In some industries, you’re required to obtain a license before you can operate your business. Examples include daycares, spas, home improvement contractors, and bedding and upholstery manufacturers.
Activity specific licenses: Certain business activities require licenses. For example, if you sell alcoholic beverages, work with flammable liquids, or wholesale goods to retailers.
Professional licenses: For specific professions like doctors, lawyers, and cosmetologists.
Health department permits: Required for businesses that prepare food or beverages for public consumption.
Permitting for brick and mortar businesses: Businesses that operate out of a physical location will have to keep permitting and zoning requirements in mind, especially when it comes to preparing their location for business.

Get Your Business Properly Licensed

Sometimes, business owners will attempt to slide under the radar and ignore their business licensing requirements all together.. Even if you run a small side hustle, this is a bad idea. First and foremost, keeping your business licensed will help you avoid the fines, fees and penalties often imposed for non-compliance. Furthermore, not having the proper licenses could lead local authorities to shut down your business for good. Finally, having your business properly licensed opens up opportunities to grants and business support programs offered by local governments and nonprofits.

At the end of the day, getting your business properly licensed may feel like a pain in the butt. But it’s much better than the alternatives.

Step-by-Step: How to Get a Business License in PA

Now that you know why business licensing is so important, let’s walk through how to actually get your business licensed.

Step 1: Set Up Your Business

Before you can apply for a business license, you need to set up and register your business. This process is pretty straight forward, depending on your desired business structure. Here’s how to do it:

Choose your business structure (LLC, corporation, sole proprietorship, etc.).
File the necessary formation documents (e.g., a Certificate of Organization for an LLC, Articles of Incorporation for a corporation, or maybe a fictitious name for a sole proprietorship or partnership).
Get an EIN for your business (if necessary).
Create any additional foundational documents for your business (e.g., a partnership agreement, operating agreement, bylaws, etc.).
Set up a business bank account.

You can set up your business on your own, or enlist the help of a professional. Either way, you’ll have to legally establish your business before you can get it licensed.

Step 2: Determine What Type of License You Need

Next, you have to figure out what licenses your business needs. As I mentioned above, this will depend on to factors; (1) the type of business your running and (2) where you’re operating it. For example:

If you’re running a restaurant, you’ll need health department permits and possibly a liquor license.
If you’re offering professional services (think: accounting, law, or real estate), you’ll need a professional license from the state.
If you’re selling physical products, you’ll probably need a sales tax license.
If you’re operating in Philadelphia, you’ll need a commercial activity license. But if you’re operating in Williamsport, you’ll need a Mercantile, and Business Privilege License.

Figuring out what licenses apply to your business is often the most challenging step. There are so many government agencies and websites, often with conflicting information. Fortunately, there are resources available to help you navigate this process.

The state has an online tool that can create a licensing checklist for your business. Having used this tool before, I can attest that it’s not perfect. However, it’s a great place to start. In addition to creating a checklist of potential licensing requirements, it will also give you contact information for local officials that can help you with local licensing requirements.

In addition to the state’s checklist tool, local nonprofits and local elected official’s offices are often available to help you navigate business licensing.

Of course, if you have a few dollars to invest you can speed up this process by hiring MZA Legal to help you set up your business and outline your licensing requirements.

Step 3: Apply for State and Local Licenses

Once you’re confident that you’ve identified all the licenses, permits and certificates required to run your business, it’s time to start applying for them. Most licenses are easy to obtain, and only require businesses to submit a form and pay a filing fee. However, industry specific licenses often have additional requirements.

For example, as long as your business is properly set up, you should have everything you need to obtain a sales tax license from the Department of Revenue. While the application is long and requests a lot of information, most of it pertains to the business structure, contact information, and ownership.

Conversely, when applying for a home improvement contractor’s license you’ll need to provide insurance information in addition to basic information about the business. And when applying for a retail food license, businesses must submit a detailed plan covering everything from the layout of the building to water, sewer and waste management.

As mentioned above, in comparison to figuring out your licensing requirements, this step may feel pretty simple. Essentially, all you have to do is follow directions. However, if you need assistance or have questions, consider reaching out to a local trade organization, or hiring an attorney to do it for you.

What to Expect After Licensing

Having your license in hand means that the hard part is over. But it doesn’t mean that you’re done having to think about licensing and compliance. Most business licenses have ongoing requirements that need to be met. Here are a few tips to help you keep up with your ongoing licensing requirements.

Build compliance into your systems and processes. You must continue to maintain the standards that were required in order for you to get your business license. If you were required to have insurance, submit a plan for review, or have a certification in order to get the license, you must maintain those requirements in order to keep it. Keeping up with these requirements can be challenging. Especially while trying to run your business. So update your standard operating procedures to ensure that compliance is built into your daily operations. And make sure these SOPs are written down, so that you can delegate responsibilities to others.
Keep up with deadlines for license renewal. As soon as you complete the licensing process, add important deadlines into your calendar and set reminders to help you keep track of them. This will help you stay prepared for the renewal process as it approaches, and avoid the chances for your license to lapse.
Keep employees and contractors aware of their responsibilities. Keeping up with licensing and compliance is a team effort. If your employees and contractors are unaware of your licensing requirements, they may accidentally do something that causes you to lose your license. Make sure that any written manuals are up to date, and trainings are conducted regularly.
Record keeping. Make sure that a copy of any licenses or permits are kept on file, and are readily accessible. You may need them to prove compliance.

Conclusion: Get Started on Your Pennsylvania Business Journey

Getting your business licensed in Pennsylvania is an essential step in making your business official. While it might seem like a lot of work, following the steps outlined here will make the process much easier to manage. And once you’ve got that license, you can rest easy knowing you’re operating legally and ready to grow.And remember, we’re here if you need help navigating the legal side of launching your business. If you’re having a hard time figuring out your business licensing responsibilities, set up a time for us to chat. We’d be happy to help guide you through the licensing process, so you can focus on running your business.