If you are planning to start a business in Kentucky, or you want to form a limited liability corporation (LLC), you will need to register your entity with the Secretary Of State. To form a business, sole proprietorships or partnerships do not need to file.
You will need to get the appropriate permits and licenses for your company. This guide will help you understand the requirements for Kentucky business licensing.
Is a Kentucky LLC required to have a business license?
You may need a business license depending on your business type. No one license applies to all businesses. A Kentucky Department of Revenue Resale Certificate is the most commonly required license. This allows your business to collect the 6% sales taxes on certain goods and services.
Depending on the nature of your profession, you may need to apply for occupational licenses or permits. This could include people who are notaries, insurance agents, or in the medical profession. These professional licenses are required to operate legally in the state.
Depending on the industry, your business might need to obtain other state licenses like liquor licenses and environmental permits.
Also, check with your local city, county, and municipal governments to determine if you need a local business license to run your business. Federal licenses are required for many industries.
What is the best time to get a Kentucky business license?
Before you can start business activities, you will need a business license. Failure to obtain a license can lead to fines and legal penalties. You must apply for a state license in only a few minutes.
Types of business licenses
Knowing the different types of business licenses can help you determine which type of license is required for your business. These are the most popular types:
- Sales & Use Tax: If you sell goods to the public or provide certain services, you must obtain a Kentucky Resale Certificate (from the Department of Revenue). This rate is 6% of gross sales.
- Occupational permits or licenses: These licenses are for individuals who perform specific business activities, such as providing notary services, selling insurance, and providing medical services. These licenses are issued by the Department of Professional Licensing.
- All businesses that emit air, pollute the environment or produce hazardous waste must obtain an environmental permit. The Division for Compliance Assistance will help you determine which licensing is required.
- Liquor License: All establishments that sell alcoholic beverages must have a liquor license from the Department of Alcoholic Beverage Control.
- Food permit: Grocery shops and restaurants must apply for permits from their local county government health department.
- Federal licenses required Many industries that are federally regulated require federal licenses. The Small Business Administration provides information about licensing.
Steps to Obtaining Your Kentucky Business License
You may need to follow different steps depending on your Kentucky business license. You will need to:
- Before starting the state licensing process, ensure you have a federal EIN.
- Visit the Kentucky One Stop Business Portal.
- Register for an account
- Register for the Commonwealth Business Identifier, (CBI) and Tax Accounts.
- Send your request for processing.
- Once your permit has been assigned, you can complete the Kentucky Resale Certificate and post it in your business establishment.
You can also submit a paper application by filling out form 10A100, Kentucky tax registration application, and sending it to:
Kentucky Department of RevenueDivision of Registration
Station 20: 501 High St.
Frankfort, Kentucky 40602-0299
For any questions, you can contact the Department of Revenue. You can reach the Division of Sales and Use Tax by calling (502) 564-5170.
What is the cost of a Kentucky business license?
Kentucky’s Sales and Use Tax License is free. Other types of licensing are subject to fees.
Bottom line
Although not all businesses require a Kentucky license, the Resale Certificate is the most commonly required business license. The license must be posted at your business, and you must pay the state sales tax. Before you can start a business, licenses are required for all businesses.
Frequently Asked Questions (FAQs).
How can I register my Kentucky business?
If you’re forming an LLC or corporation, you may need to register the business with the Secretary. An Employer Identification Number (or EIN) may be required by the IRS to register for the federal, state, and county licenses necessary for your industry.
What permits are required to sell online in Kentucky
Every business that generates sales of products or taxable services needs a seller’s license and must collect the applicable 6% tax.
