Starting a successful graphic design business takes more than having an eye for design. Starting a new business requires completing several steps, and obtaining licensing is an important one as it may impact your ability to operate legally.

The question, “what business license do I need to start my graphic design business” is a common one, but in reality, your business will likely need multiple licenses, permits, and registrations from federal, state, and local agencies.

Let’s look at which licenses to consider when starting a graphic design business.

Related: Guide to starting a graphic design business

What Licenses Do You Need to Start a Graphic Design Business?

While there aren’t licenses specifically for a graphic design business, there are general licensing requirements for starting a business at the federal, state, and local level.   Here are a few of the common licenses and permits that a graphic design business may need:

Entity Formation

When starting a business, the legal entity needs to be selected. A legal entity refers to how a business is organized in order to operate. There are four main types of entities; sole proprietorship, partnership, corporation, and Limited Liability Company (LLC).

Each type of entity has its own pros and cons, such as liability protection, costs, and administrative requirements.

Related: What is the difference between a sole proprietorship, partnership, Corporation, or LLC?

Business Name Registration

While not necessarily a business license, it’s worth noting that to use a name for a business, many states require the registration of that name. Making matters more complicated, the process of name registration is different by state and the type of business entity.

For instance, sole proprietorships and partnerships generally need to register a business name (also referred to as a Doing Business As, DBA, fictitious name, or assumed name).

Learn: How to register a DBA

Corporations and LLCs register are a little easier because the name is registered when the entity is formed with the state.

General Business License or Permit

Depending on where the business is located, a general business license or permit may be required. A few states require a business license; however, they are more commonly found at the city level.

Learn more: Business license requirements by state

Federal Employer Identification Number

The Federal Employer Identification Number (also referred to as a FEIN, Employer Identification Number, EIN, or Federal Tax ID Number) is a unique nine-digit number that identifies a business with the Internal Revenue Service (IRS).

Any business with employees or those that form as a partnership, Corporation, and in many cases an LLC, the business will need to get an EIN.

Sole proprietors and single-owner LLCs without employees can instead use the owner’s social security number.

Learn: How to get an EIN 

Sales Tax Permit or Business Number

Sales tax Service

Perhaps the most confusing registration for a graphic design business is the sales tax permit. To sell services in some states, which most of what a graphic design business is a service, a state sales tax permit (also referred to as a business tax number or tax ID number) may be needed.  More commonly, a sales tax permit will be needed for a graphic design business that sells physical products such as business cards or flyers to the customer.

This permit creates an account number with the state’s Department of Revenue (or similarly named state taxing agency) to collect and remit sales tax.

Learn: State-by-state information on sales tax permits

Certificate of Occupancy

In most communities, a graphic design business will likely need to secure a Certificate of Occupancy (CO) before operating in a commercial building.  This certificate is typically obtained from the city and/or the county and allows a business to occupy and operate from a building. Before the certificate is issued, the building will need to comply with zoning regulations, building codes, and any other local requirements.

A home occupation permit may be required if the graphic design business will be operated as a home-based business.

Before purchasing or leasing a location for your graphic design business, be sure to check with the local zoning department first to ensure the business can legally operate out of the chosen location.

The process of identifying all of the licenses and permits necessary to start a graphic design business may feel confusing and overwhelming. It is critical to do this right the first time, otherwise, your business may be shut down after opening until all licenses are obtained.