When starting a new business, many entrepreneurs get confused between forming an LLC and obtaining a business license. While both are essential for legally operating a business, they are not the same thing.
In this article, we’ll explain the difference between an LLC (Limited Liability Company) and a business license, and why you may need both to run your business legally.
What Is an LLC?
An LLC, or Limited Liability Company, is a legal business structure that separates your personal assets from your business assets. It protects you (the owner) from being personally liable for your company’s debts or legal issues.
Benefits of an LLC:
- Personal liability protection
- Pass-through taxation
- Professional image and credibility
- Ability to open business bank accounts, sign contracts, and hire employees
Forming an LLC means registering your business with your state government — not the local city or county.
What Is a Business License?
A business license is a permit issued by a local, state, or federal government that gives you permission to legally operate your business in a specific location or industry.
Common types of business licenses include:
- General business license (city or county level)
- Home occupation permit (for home-based businesses)
- Health department permits (for food businesses)
- Professional or occupational licenses (for barbers, contractors, therapists, etc.)
- Sales tax permit (for selling physical goods)
So, Is an LLC a Business License?
No — an LLC is not a business license.
They are two separate things:
| Feature | LLC | Business License |
|---|---|---|
| What it is | A legal business structure | A government-issued permit |
| Who issues it | State government | Local city, county, or state agencies |
| Purpose | Creates a legal entity | Grants permission to operate legally |
| Required for? | Asset protection, taxation | Compliance and zoning |
| Can you operate without it? | Not legally protected | Not legally allowed to operate |
You often need both to operate legally — an LLC to protect your assets, and a business license to comply with local laws.
Do I Need a Business License After Forming an LLC?
Yes, in most cases.
After forming your LLC with the state, you usually need to:
- Apply for a local business license with your city or county
- Register for any industry-specific licenses or permits
- Obtain a sales tax permit if you’re selling physical goods
- Stay compliant with renewals and inspections
Example: If you form an LLC for a food truck in Florida, you’ll still need:
- A food service license from the health department
- A local business tax receipt
- A mobile vending permit
How Do I Know What Licenses I Need?
Here’s how to find out:
- Check with your city or county clerk’s office
- Visit your state’s Department of Revenue or business portal
- Search your business type on the SBA.gov License & Permits tool
- Or simply ask an expert (we can help!)
Can FormLLC Help with Business Licenses?
Yes! At FormLLC, we not only form your LLC in any U.S. state — we also help guide you through:
-> Business license research
-> Sales tax registration
-> EIN application
-> Operating agreement creation
-> Registered agent services
We simplify the process so you can focus on running your business.
📧 contact@formllc.us
🌐 www.formllc.us
📱 WhatsApp: +91 6202619173
Final Thoughts
While an LLC gives your business legal structure and protection, a business license gives you the legal permission to operate. You usually need both to stay compliant and avoid penalties.
Form the LLC to protect yourself.
Get the business license to stay legal.
Grow your business with confidence.