How to Get an Independent Contractor Business License

To become an independent contractor, there are several steps you need to take to ensure that you are operating legally and within the bounds of the law. One of the most important steps is obtaining a business license. In this guide, we will discuss how to get a business license as an independent contractor, including the minimum requirements for working as an independent contractor, whether or not you need a business license, and how to obtain one if you do.

Minimum Requirements for Working as an Independent Contractor

Before we dive into the specifics of obtaining a business license as an independent contractor, it’s important to understand the minimum requirements for working as an independent contractor: ¹ 

Make sure you really qualify as an independent contractor

To qualify as an independent contractor, you must be in business for yourself. This means that you work for yourself and not for someone else’s business. Factors that show you are an independent contractor include working with multiple clients instead of just one, not receiving detailed instructions from hiring firms, paying your own business expenses such as office and equipment expenses, setting your own schedule, marketing your services to the public, having all necessary business licenses, working outside the hiring firm’s premises, not receiving employee benefits like health insurance, paying all your own Social Security and Medicare taxes, and more

Choose a business name (and register it, if necessary)

A DBA, or “doing business as,” is a fictitious business name that allows you to legally do business under a name other than your legal one. A DBA is also also known as an “assumed name,” “fictitious business name,” or “trade name.” Registering a DBA alone does not legally protect you; however, it may be required, depending on the state, city, or county where you operate. A DBA is a good idea for any business that wants to operate under a name other than its legal name. The purpose of registering a DBA name is to officially notify the public that a person (or business entity) is conducting business under a name other than its original legal name. To register a DBA, you’ll need to check with your local government to determine the requirements in your area and file the necessary paperwork.

Get a tax registration certificate (and a sales tax permit, if necessary)

If you plan to make taxable sales, you will need to obtain a tax registration certificate from your state’s tax department. The process for obtaining a tax registration certificate varies by state but generally involves submitting an application and waiting for approval. In some cases, you may be able to register online, while in others, you may need to submit your application by mail or in person. Once your application is approved, you will receive a certificate that must be displayed at your place of business at all times. It’s important to note that the type of certificate you need may vary depending on the expected duration of your business activities.

Once you have completed the three basic steps described above, you may start providing services as an independent contractor. However, it’s important to note that laws vary by city and county, so you should check with your local government to ensure that you are operating legally.

Do You Need a Business License as an Independent Contractor?

The short answer is that it depends on where you live. The majority of states do not require independent contractors to obtain business licenses to work with clients ². However, laws vary by city and county, so it’s important to check with your local government to ensure that you are operating legally. For example, in Louisiana, all businesses within the state — including contractors — must be registered with the Louisiana Secretary of State. This can all be done through their website, and you’ll need to decide the type of business ³.

In some cases, you may be required to register your business with your county clerk’s office, obtain a business license, or carry a contractor license — and in some cases, all three ³ . It’s important to understand that licensing requirements for contractors vary by state and even by city or county. For example, in Louisiana, general contractors need either a residential or commercial license. A residential license is a requirement for projects exceeding $75,000, while a commercial license is a requirement for projects over $50,000 in value ³.

How to Obtain a Business License as an Independent Contractor

If you determine that you need a business license to operate as an independent contractor, the process for obtaining one will vary depending on where you live. Most states do not require you to have a business license as an independent contractor within the US, but laws vary by city and county ⁴. To obtain a business license, you will typically need to follow these steps:

1. Check with your local government to determine if you need a business license to operate as an independent contractor.
2. If you do need a business license, determine the type of license you need and the requirements for obtaining it.
3. Complete any necessary paperwork and pay any required fees.
4. Wait for your license to be approved.

It’s important to note that the process for obtaining a business license can be time-consuming and may require you to provide a significant amount of documentation. However, obtaining a business license is an important step in ensuring that you are operating legally and within the bounds of the law.

Sources:

1. https://www.nolo.com/legal-encyclopedia/minimum-requirements-working-independent-contractor-29978.html
2. https://www.rippling.com/blog/does-independent-contractor-need-business-license/
3. https://www.procore.com/library/contractors-license-guide-all-states
4. https://www.deel.com/blog/do-you-need-an-independent-contractor-license