I have noticed a disturbing trend when reviewing applications for the next Blue Sky No Limits mastermind that really needs to be addressed: 62% of the applicants have been in business for more than 2 years but they do NOT have a local business license.
Ladies, you are playing with fire.
Most local ordinances have this language: Every person or entity engaged or intending to engage in business is required to obtain a license based on business activity and gross receipts. In South Carolina, business license fees are due prior to commencing operations, and annually on April 30th.
Notice that it says the license is due prior to commencing operations and then renewed annually. This can become important if the jurisdiction decides to assess penalties.
Almost all municipalities and many counties in South Carolina (and most areas of the United States) require a business to be registered. This registration allows the government to know what activity is happening in their territory, the license registration fee serves as a type of tax, therefore revenue for the city, and it demonstrates to the world that you take your responsibilities as a business owner seriously.
Business licenses are issued based on the location (or locations) of your business headquarters. Locally, if your business operates primarily in Charleston or Dorchester County, you are required to be have a local business license — even if you work from home. One exception locally is Berkeley County — if you do not live in a city, like Goose Creek or Hanahan, then you may not need one. Daniel Island, even though it’s in Berkeley County, has its businesses regulated through the City of Charleston and a business license is required.
Business licenses can be complicated. According to the State of South Carolina Business One-Stop, here are some examples to consider:
Example 1:
If a business is physically located in the City of Columbia and does business in the Town of Irmo, business licenses are required from both Columbia and Irmo. Home-based and online businesses are required to have business licenses.
Example 2:
If the business is physically located in or conducts business in the unincorporated (non-city limit) area of a county, the business will need a county business license if that county is one of the counties listed with **.
Example 3:
If the business has a food truck or is a contractor based in the unincorporated area of Richland County (which requires a business license) and conducts business in the City of Columbia, the business would need a Richland County business license and a City of Columbia business license.
If you have not obtained your local business license, you want to do it ASAP. You can apply online and most jurisdictions will then send you an invoice once they review the application and determine the fee or you can apply in person. The fee is based on your projected income and your NAICS code (your industry classification — it should match what you use on your Schedule C when you file your taxes). For most small businesses, the fee will be less than $100. However, the statutes do allow for the jurisdictions to charge a 5% per month penalty on businesses that are operating without a license or who fail to renew (and some jurisdictions have even larger penalties). This could run into several hundreds, if not thousands, of dollars. They typically do not assess penalties if the business owner comes forward voluntarily to register. But if you come to the attention of government officials and you aren’t registered, they can come after you.
To find out information about your particular situation, do a Google search with the name of your municipality or county followed by business license. Then follow the instructions. You can start with the South Carolina Business One-Stop and process from there.
Take your business seriously. Get your local business license this week.