When you open a boutique, you must acquire a few licenses and legal documents that will entitle you to conduct business. This is an integral part of starting an online boutique or a brick-and-mortar shop. Your boutique business license and seller permits are essential legal documents, but you will not need a lawyer's help to get them.
Doing Business As (DBA)
Depending on the name you choose for your boutique, you may need a "Doing Business As" permit or a "DBA" as a part of your business license for an online boutique. It lets the government know your business name is a legal entity. Your bank will also need a copy so that you can deposit checks made out to your company name into your business account. In some cases, where you use your full name for the business, a DBA is not required. For example, if your name is Lily Bowers, and your boutique is Lily Bowers Boutique, you wouldn't need a DBA because it includes your last name. However, if you choose Lily's Boutique or any other name that doesn't include your last name, file for a DBA.
While some services charge about $100 to set up a DBA on your behalf, you can tackle this step on your own. Just search for "how to get a DBA" in your city and state. Likely, the process will include publishing your boutique's legal name in a newspaper for three weeks running and providing proof of the publication. The County Recorder's Office will have a list of many newspapers and the number to call to place this ad. If you’re looking to keep costs low, look for the least expensive option.
An Employer Identification Number (EIN) identifies a business entity with the federal government. A SEIN does the same for the state government. You will use the EIN to communicate with the government for any business you have and for paying taxes. Typically, your boutique business license requires an EIN only if you have employees, you incorporate, or if you have partners. Otherwise, you can use your social security number in place of the EIN. But an EIN is still an option, and it is free and straightforward to apply for online.
Once you have your DBA and your EIN, you can get a business license for an online boutique. A business license legally registers your business with the governments of the city and state where your company operates. The legal requirements for your boutique business license depend upon the state and city where you live and do business. It may also depend upon the type of merchandise you intend to sell. For instance, you don't need a business license to resell wholesale boutique clothing in some cities, but you do need a permit to sell used or vintage clothing.
Online tools for your city's Business License Department should answer most of your questions. Don't hesitate to call the phone number listed to ask your questions about licenses you need to sell clothes. This is your tax dollars at work!
Home Occupation Permit
If you intend to run your online boutique from your home, you may need to apply for a Home Occupation Permit (HOP). The HOP allows you to legally conduct limited business activities from your home and continue to use it as your residence. Again, the requirements for this online boutique license vary with the city and state you live in.
Most cities and states in the U.S. require that you collect sales tax on each sale made in person and the sales your online boutique makes within the state where you do business. Therefore, sales tax collection is a strict requirement you must meet. A seller's permit allows you to collect sales tax from your customers and report it to the state. Application for a seller's permit is simple and may be available online.
Another business license for an online store is a resale permit. Although it sounds similar, a resale permit is quite different from a seller's permit. A seller's permit enables you to collect sales tax from your customers legally. A resale permit identifies your business as having the right to make nontaxable purchases for inventory that you will then resell. Some wholesale boutique clothing vendors require a copy of your reseller's permit before they will sell to you. Most states allow you to apply for a resale permit in person, by mail, or online.Now you know how to get a license for a boutique. Yes, there are several that you need, but the application process is not difficult for any of them. Some are free, while others may cost as much as $35. It's a small investment in your online boutique and is deductible on your business taxes! With these boutique business licenses and permits, you are ready to open your business!