Do I Need A License To Start A Business?

Many people ask: Do I need a license to start a business? The short answer is yes — in Utah and throughout the United States, virtually every business must obtain at least one license or permit before legally operating. The type of license you need depends on your industry, your business structure, and the city or county where you operate. This guide walks you through what you need to know about business licensing requirements, with a focus on Utah law.

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“Start Your Business Right — Get the License You Need!”

Introduction

Starting a business in Utah is an exciting endeavor, but before you open your doors, hang your sign, or launch your website, you must comply with state and local licensing requirements. Operating without the proper licenses puts you at risk of fines, penalties, and forced closure. Understanding what licenses apply to your business is one of the most important steps in the startup process — and one that many entrepreneurs overlook.

A business attorney can guide you through licensing requirements so you start on solid legal footing. This article explains everything you need to know about business licenses in Utah, from state registration through local permits and industry-specific credentials.

What Is a Business License?

A business license is a government-issued authorization that allows an individual or company to conduct business within a particular jurisdiction. It is not a single document — “business license” is an umbrella term that covers dozens of different permits, registrations, and certifications issued by federal, state, and local agencies.

The purpose of business licensing is to:

Ensure businesses comply with health, safety, and zoning regulations
Generate tax revenue for local governments
Protect consumers from unqualified service providers
Create a public record of business activity in the community

In Utah, the licensing process typically involves at least three layers: registration with the state, a local city or county business license, and — depending on your industry — one or more professional or occupational licenses from the Utah Division of Occupational and Professional Licensing (DOPL).

Utah Business Licensing Requirements

Utah does not have a single statewide “general business license” that applies to all businesses. Instead, licensing in Utah is governed by a combination of state statutes, administrative rules, and local ordinances. Here is what most Utah businesses need:

1. Utah Business Registration (Division of Corporations)

Before applying for any license, most businesses must register their legal entity with the Utah Division of Corporations and Commercial Code. This includes:

LLCs — File Articles of Organization (Utah Code § 48-3a-201)
Corporations — File Articles of Incorporation (Utah Code § 16-10a-202)
Partnerships — File a Statement of Qualification for LLPs
Sole Proprietors using a trade name — File a DBA (Doing Business As) registration

The state filing fee varies by entity type. As of 2024, an LLC costs $54 to organize online. Failure to register before conducting business can expose owners to personal liability and make contracts unenforceable.

2. Employer Identification Number (EIN)

If your business has employees, operates as a corporation or partnership, or files certain federal tax returns, you must obtain an Employer Identification Number (EIN) from the Internal Revenue Service. The IRS issues EINs at no charge through its online application system. Even sole proprietors benefit from obtaining an EIN to avoid using their Social Security Number on business documents.

3. Utah State Tax Registration

Most Utah businesses must register with the Utah State Tax Commission to collect and remit sales tax, withholding tax, or other applicable taxes. Utah’s state sales tax rate is 4.85%, but combined local rates can reach 8.7% or higher depending on the county. Businesses selling tangible goods or certain taxable services must obtain a Utah Sales Tax License before making their first sale.

Federal Licenses and Permits

Some industries are regulated at the federal level and require permits from specific federal agencies. If your business falls into one of these categories, federal licensing is required in addition to — not instead of — state and local licenses:

Agriculture — U.S. Department of Agriculture (USDA) permits for transporting, selling, or importing animals or animal products
Alcohol — Alcohol and Tobacco Tax and Trade Bureau (TTB) permit for manufacturers, importers, and wholesalers; Utah also requires state-level liquor licensing through the Utah Department of Alcoholic Beverage Services
Aviation — Federal Aviation Administration (FAA) certificates for commercial aviation operations
Firearms and Explosives — Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) federal firearms license
Broadcast Media — Federal Communications Commission (FCC) license for radio, TV, and satellite broadcasting
Financial Services — Securities and Exchange Commission (SEC) registration for investment advisers and broker-dealers; Financial Industry Regulatory Authority (FINRA) registration for brokers
Transportation — U.S. Department of Transportation (DOT) operating authority for interstate motor carriers
Pharmaceuticals and Medical Devices — Food and Drug Administration (FDA) approval for manufacturers and distributors
Mining — Bureau of Land Management (BLM) and Mine Safety and Health Administration (MSHA) permits

Federal licenses are often obtained in parallel with state licenses. An experienced business lawyer can help you identify which federal agencies regulate your industry and navigate the application process.

State Licenses in Utah

Utah regulates dozens of professions and business activities at the state level. The two primary agencies that issue state licenses are:

Utah Division of Occupational and Professional Licensing (DOPL)

DOPL licenses more than 60 professions under Utah Code Title 58. If you work in any of the following fields, you need a DOPL license before practicing or operating a business:

Accountants and CPAs
Architects and engineers
Contractors (general and specialty)
Cosmetologists, barbers, and estheticians
Dental professionals
Healthcare providers (physicians, nurses, pharmacists, therapists)
Insurance agents and adjusters
Mortgage loan originators
Private investigators
Real estate agents and brokers
Security personnel
Social workers and mental health professionals

DOPL applications typically require proof of education, passing a licensing exam, criminal background checks, and payment of licensing fees. Many licenses must be renewed annually or biennially.

Utah Department of Commerce — Division of Securities

Businesses engaged in selling securities or providing investment advice in Utah must register with the Utah Division of Securities. This includes broker-dealers, investment advisers, and their agents. Utah securities law closely mirrors federal securities law but imposes its own registration, disclosure, and anti-fraud requirements under the Utah Uniform Securities Act (Utah Code § 61-1).

Utah Department of Alcoholic Beverage Services (DABS)

Any business wishing to sell, serve, or manufacture alcoholic beverages in Utah must obtain a license from DABS. Utah has some of the most complex liquor licensing laws in the nation. License types include:

Full-service restaurant license
Limited-service restaurant license
Bar establishment license
Beer-only restaurant license
Club license (private clubs)
Manufacturer’s license (breweries, wineries, distilleries)
Package agency license (grocery/convenience stores)

Many of these licenses have waiting lists or population-based quotas. A business lawyer familiar with Utah’s liquor laws can help you determine which license fits your concept and navigate the application.

Local City and County Licenses

In addition to state requirements, most Utah cities and counties require a separate local business license. These are typically renewed annually and cover:

Zoning compliance verification
Fire and safety inspections
Building and occupancy permits
Home-based business permits
Signage permits

Major Utah municipalities — Salt Lake City, Provo, Ogden, and St. George — each have their own business license ordinances with varying fees, inspection requirements, and renewal procedures. If you operate from a home office, your city may still require a home occupation permit confirming you comply with residential zoning restrictions.

Important: If you operate in multiple Utah cities or counties, you may need a separate business license from each jurisdiction where you physically conduct business.

Industry-Specific Business Licenses

Beyond the general requirements, many Utah industries carry their own licensing layers. Here are the most common:

Food Service and Restaurants

Food businesses in Utah must obtain a Food Handler Permit from the Utah Department of Agriculture and Food (UDAF) or from the local health department, depending on the type of food operation. This includes:

Retail food establishments (restaurants, cafes, delis)
Mobile food units (food trucks)
Cottage food operations
Catering businesses
Food manufacturers and processors

A licensed food establishment must pass a health inspection before opening and undergo periodic reinspections. Violations can result in suspension or revocation of the food service license.

Construction and Contractors

Utah contractors must be licensed through DOPL under Utah Code § 58-55. Contractor licenses fall into three main tiers:

Qualifier (B100) — general building contractor
Specialty (S-series) — electrical, plumbing, HVAC, roofing, etc.
Responsible Managing Employee (RME) — the individual who qualifies the company’s license

Unlicensed contracting is a class B misdemeanor in Utah and can void contracts, leaving the contractor unable to sue for payment. Always verify your contractor’s license status on the DOPL website before beginning work.

Healthcare and Medical Businesses

Healthcare businesses face layered licensing: the business entity registers with the state, the facility may need a certificate of need or facility license from the Utah Department of Health and Human Services, and each individual practitioner must hold a current DOPL license. Telehealth companies operating in Utah must also comply with state telehealth regulations under Utah Code § 26B-4-301 et seq.

Childcare

Childcare centers and residential childcare providers in Utah must be licensed by the Utah Office of Child Care under the Utah Child Care Licensing Act (Utah Code § 26B-2-401 et seq.). Background checks, facility inspections, staff-to-child ratio requirements, and training mandates all apply.

Real Estate

Real estate agents and brokers must be licensed by DOPL and affiliated with a Utah-licensed real estate brokerage. Property managers handling residential rentals for others also require a real estate license. Understanding these licensing layers is critical before launching a real estate business in Utah.

Cannabis-Related Businesses

Utah permits medical cannabis only, under its Medical Cannabis Act (Utah Code § 26B-4-201 et seq.). Cannabis businesses — including medical cannabis pharmacies, producers, and manufacturers — require licensure from the Utah Department of Health and Human Services. The number of licenses is strictly limited by statute, and applications are highly competitive.

What Are the Legal Requirements for Starting a Business?

Starting a business involves more than just obtaining a license. The complete legal checklist for a new Utah business includes:

Choose a business entity — sole proprietorship, partnership, LLC, or corporation
Register with the Utah Division of Corporations
Obtain an EIN from the IRS
Register for Utah state taxes with the Utah State Tax Commission
Obtain all required licenses and permits (federal, state, and local)
Comply with employment laws — minimum wage, workers’ compensation, unemployment insurance
Open a dedicated business bank account
Draft operating agreements, bylaws, or partnership agreements as required by your entity type
Comply with any applicable consumer protection laws
Maintain proper business records for tax and legal compliance

Choosing Your Business Entity

Your choice of business entity affects which licenses you need, your personal liability exposure, and your tax obligations. Here is a brief overview of the main options under Utah law:

Sole Proprietorship

The simplest form — no formal state registration required unless you use a trade name (DBA). The owner is personally liable for all business debts and obligations. Taxed on the owner’s personal return (Schedule C). Local business licenses are still required.

General Partnership

Two or more people sharing ownership and profits. Like a sole proprietorship, partners are personally liable for business debts. Utah recognizes general partnerships under the Utah Revised Uniform Partnership Act (Utah Code § 48-1d). A written partnership agreement is strongly recommended to define each partner’s rights and responsibilities.

Limited Liability Company (LLC)

The most popular choice for small business owners in Utah. An LLC provides personal liability protection while offering flexible tax treatment — taxed as a sole proprietorship (single-member), partnership (multi-member), S-corp, or C-corp depending on elections made. Utah LLCs are governed by the Utah Revised Uniform Limited Liability Company Act (Utah Code § 48-3a).

Corporation

A separate legal entity owned by shareholders. Corporations offer the strongest liability protection and are the preferred structure for businesses seeking outside investment. Utah corporations are governed by the Utah Revised Business Corporation Act (Utah Code § 16-10a). Corporations can elect S-corp status with the IRS to avoid double taxation at the federal level, provided they meet eligibility requirements.

Nonprofit Corporation

Organizations formed for charitable, educational, or other exempt purposes may incorporate as Utah nonprofit corporations under Utah Code § 16-6a. Nonprofits that qualify under IRS § 501(c)(3) are exempt from federal income tax and may qualify for Utah sales tax exemptions. Separate state and federal applications are required to achieve tax-exempt status.

Understanding which entity best protects your interests is one of the most important early decisions in the startup process. Consulting with a business attorney experienced in Utah business organizations before filing ensures you make the right choice from day one.

What Are the Benefits of Having a Business License?

Having all required business licenses provides significant benefits beyond mere legal compliance:

Credibility and Consumer Trust

A business license demonstrates to customers, vendors, and lenders that your business is legitimate and has been vetted by the appropriate authorities. Licensed businesses rank higher in consumer trust surveys and are more likely to attract repeat customers and referral business.

Legal Protection

Licensed businesses can enforce contracts in court. An unlicensed contractor in Utah, for example, may be unable to sue for unpaid work — and may face criminal penalties. A business license provides the legal standing to pursue debts, enforce agreements, and protect your business interests.

Access to Business Banking and Credit

Banks, credit unions, and the U.S. Small Business Administration (SBA) typically require proof of licensing before extending business loans or opening business accounts. A strong business credit profile begins with proper licensing and registration.

Tax Deductions and Benefits

Licensed businesses can deduct ordinary and necessary business expenses — including the cost of licenses themselves — reducing taxable income. Some Utah and federal programs also offer incentives and grants exclusively to licensed, registered businesses.

Reduced Liability Exposure

Operating without a license often voids the liability protection offered by LLCs and corporations. Courts have held that an unlicensed business’s owners may be personally liable for damages — defeating the entire purpose of forming a formal entity.

How to Obtain a Business License for Your Startup

The process for obtaining a business license in Utah generally follows these steps:

Step 1: Identify All Required Licenses

Start by making a comprehensive list of every license or permit your business needs at the federal, state, and local levels. This requires knowing your industry, your location, and whether you will have employees. The Utah Governor’s Office of Economic Opportunity Business Resource Center provides a helpful starting point for Utah businesses.

Step 2: Register Your Business Entity

File your formation documents with the Utah Division of Corporations at corporations.utah.gov. Most filings can be completed online. The processing time for online filings is typically one to three business days.

Step 3: Obtain Your EIN

Apply for your EIN through the IRS website at irs.gov. The application is free and you receive your EIN immediately upon completing the online form.

Step 4: Register for Utah State Taxes

Register for applicable state taxes through the Utah State Tax Commission’s TAP (Taxpayer Access Point) portal. If you will collect sales tax, you must obtain a Utah Sales Tax License before your first sale.

Step 5: Apply for State Professional Licenses

If your profession is regulated by DOPL or another Utah state agency, submit your license application along with required documentation, examination results, and fees. Processing times vary by license type — some can take 30 to 90 days or longer.

Step 6: Apply for Your Local Business License

Contact your city or county clerk’s office to obtain a local business license application. You will need to provide your state entity number, business address, description of business activities, and proof of state registrations. A zoning verification may be required to confirm your location is approved for your type of business.

Step 7: Post and Maintain Your Licenses

Many licenses must be prominently displayed at your place of business. Set calendar reminders for renewal deadlines — operating on an expired license carries the same penalties as operating without a license.

What Types of Businesses Require a License?

Nearly every business in Utah requires some form of license or permit. Here is a breakdown by category:

Retail and Food Service

All retail stores and restaurants need a local business license and Utah Sales Tax License. Food establishments also need a food service permit from the local health department.

Professional Services

Attorneys, accountants, engineers, architects, medical professionals, therapists, real estate agents, and dozens of other licensed professions require DOPL licensure. The delivery of legal services in Utah requires an active Utah State Bar license.

Construction

All contractors performing work exceeding $3,000 in value must be licensed by DOPL. Subcontractors in electrical, plumbing, HVAC, and other specialty trades also need separate specialty contractor licenses.

Transportation and Logistics

Trucking companies operating interstate must register with the Federal Motor Carrier Safety Administration (FMCSA) and obtain a USDOT number. Intrastate carriers must register with the Utah Department of Transportation.

Home-Based Businesses

Many entrepreneurs start from home, but even home-based businesses may need a local home occupation permit. Zoning ordinances in most Utah cities restrict the type and scale of business activity permitted in residential zones. Common restrictions include prohibitions on customer visits, signage, and employees who are not residents of the home.

Online Businesses

E-commerce businesses operating from Utah must register with the state and collect Utah sales tax from Utah customers. Following the U.S. Supreme Court’s 2018 decision in South Dakota v. Wayfair, online sellers may also be required to collect sales tax in states where they have “economic nexus” — even without a physical presence.

Consequences of Operating Without a License

Failing to obtain required licenses and permits exposes your business to serious legal and financial consequences:

Civil Penalties and Fines

Utah cities typically impose daily fines for operating without a local business license. State agencies can impose significant administrative penalties — DOPL fines for unlicensed practice can reach $2,000 per violation per day under Utah Code § 58-1-501.

Criminal Liability

Unlicensed practice in a regulated profession is a criminal offense in Utah. Depending on the profession, penalties range from a class B misdemeanor (unlicensed contracting) to a third-degree felony (unlicensed medical practice). Criminal convictions can permanently bar individuals from obtaining future professional licenses.

Contract Unenforceability

Utah courts have held that contracts entered into by unlicensed businesses in regulated industries are void or voidable. This means an unlicensed contractor cannot sue a homeowner for nonpayment — the contractor has no legal right to enforce the agreement.

Loss of Liability Protection

Courts have pierced the corporate veil of LLCs and corporations that operated without proper licenses. When the corporate veil is pierced, owners become personally responsible for business debts and liabilities.

Business Closure

State agencies and local governments have authority to issue cease-and-desist orders and seek injunctions shutting down unlicensed businesses. A forced closure — especially after building a customer base and investing in equipment — can be financially devastating.

How to Avoid Common Mistakes When Starting a Business

Here are the most common licensing mistakes Utah entrepreneurs make — and how to avoid them:

Assuming no license is needed. Many new business owners mistakenly believe that only “big businesses” need licenses. In reality, a freelance graphic designer, an Etsy seller with a dedicated studio, and a one-person lawn care company all likely need a business license.
Forgetting local licenses. Entrepreneurs who carefully handle state registration often overlook the city or county business license. Operating in multiple cities means obtaining multiple local licenses.
Letting licenses expire. An expired license has the same legal effect as no license at all. Create a compliance calendar tracking every license’s renewal date.
Not researching zoning before signing a lease. Signing a commercial lease before confirming that the space is properly zoned for your intended use can result in either relocating or operating illegally. Research applicable laws and regulations before committing to a location.
Failing to update licenses after changes. Changes in ownership, location, business activities, or trade names typically require updating or reapplying for licenses. Failure to notify licensing agencies can result in penalties.
Neglecting professional licensing for employees. If your business employs licensed professionals, each employee must hold their own individual license. The business license does not cover employees who are required to be individually licensed.

When to Consult a Business Attorney

Business licensing can be straightforward for a simple retail shop but extremely complex for businesses in regulated industries, businesses operating in multiple states, or businesses with unique ownership structures. You should consult a business attorney when:

You are unsure which licenses apply to your business model
Your license application has been denied or is under review
You have received a cease-and-desist order or citation for unlicensed activity
Your business operates in multiple states
You are purchasing an existing business and need to verify its licensing is current
You are entering a regulated industry such as healthcare, finance, cannabis, or alcohol
You are structuring a business succession plan and need to understand how license transfers work
You want to review a commercial lease for zoning and permitted use compliance

An attorney experienced in Utah business law and tax compliance can conduct a comprehensive licensing audit of your business, identify gaps, and help you resolve issues before they become costly enforcement actions.

Q&A

1. Do I need a license to start a business in Utah?

Yes. In Utah, virtually all businesses need at minimum a local city or county business license, and most also need state registration with the Division of Corporations and a Utah Sales Tax License if selling taxable goods or services. Many industries also require professional licenses from DOPL or permits from other state agencies.

2. What type of license do I need?

The type of license depends on your industry, your business structure, and your location. A restaurant needs a food service permit and possibly a liquor license. A contractor needs a DOPL contractor license. A therapist needs a DOPL professional license. All businesses operating in a Utah city need a local business license. Consult with a business attorney or the research legal requirements for your specific business type.

3. How do I get a business license in Utah?

Start by registering your business entity at corporations.utah.gov. Then obtain an EIN from the IRS, register for Utah state taxes, apply for any DOPL professional licenses, and apply for a local business license from your city or county clerk.

4. How much does a business license cost in Utah?

State entity registration fees start at $54 for an LLC. DOPL professional license fees vary by profession and typically range from $50 to several hundred dollars. Local business license fees vary by city — most range from $25 to $200 per year for small businesses. Some heavily regulated industries (liquor licenses, cannabis) can involve application fees of thousands of dollars.

5. What happens if I operate without a license in Utah?

You may face civil fines, criminal misdemeanor or felony charges, loss of the ability to enforce contracts, and potential loss of personal liability protection. State and local agencies can also seek a court injunction ordering your business to close. The risks of operating without proper licenses far outweigh the cost and effort of obtaining them.

6. Can I transfer my business license if I sell my business?

Business licenses are generally not transferable in Utah. When a business is sold, the new owner must apply for new licenses in their own name. State professional licenses are strictly personal and cannot be sold or transferred. A comprehensive due diligence review when buying a Utah business should always include a licensing audit.

7. Do online businesses need a business license in Utah?

Yes. If your e-commerce business is based in Utah, you need a Utah business entity registration, possibly a Utah Sales Tax License, and a local business license for your physical location (even if it is a home office). Online businesses are not exempt from licensing requirements.

Areas We Serve

We serve individuals and businesses in the following locations:

Salt Lake City Utah
West Valley City Utah
Provo Utah
West Jordan Utah
Orem Utah
Sandy Utah
Ogden Utah
St. George Utah
Layton Utah
South Jordan Utah
Lehi Utah
Millcreek Utah
Taylorsville Utah
Logan Utah
Murray Utah
Draper Utah
Bountiful Utah
Riverton Utah
Herriman Utah
Spanish Fork Utah
Roy Utah
Pleasant Grove Utah
Kearns Utah
Tooele Utah
Cottonwood Heights Utah
Midvale Utah
Springville Utah
Eagle Mountain Utah
Cedar City Utah
Kaysville Utah
Clearfield Utah
Holladay Utah
American Fork Utah
Syracuse Utah
Saratoga Springs Utah
Magna Utah
Washington Utah
South Salt Lake Utah
Farmington Utah
Clinton Utah
North Salt Lake Utah
Payson Utah
North Ogden Utah
Brigham City Utah
Highland Utah
Centerville Utah
Hurricane Utah
South Ogden Utah
Heber Utah
West Haven Utah
Bluffdale Utah
Santaquin Utah
Smithfield Utah
Woods Cross Utah
Grantsville Utah
Lindon Utah
North Logan Utah
West Point Utah
Vernal Utah
Alpine Utah
Cedar Hills Utah
Pleasant View Utah
Mapleton Utah
Stansbury Par Utah
Washington Terrace Utah
Riverdale Utah
Hooper Utah
Tremonton Utah
Ivins Utah
Park City Utah
Price Utah
Hyrum Utah
Summit Park Utah
Salem Utah
Richfield Utah
Santa Clara Utah
Providence Utah
South Weber Utah
Vineyard Utah
Ephraim Utah
Roosevelt Utah
Farr West Utah
Plain City Utah
Nibley Utah
Enoch Utah
Harrisville Utah
Snyderville Utah
Fruit Heights Utah
Nephi Utah
White City Utah
West Bountiful Utah
Sunset Utah
Moab Utah
Midway Utah
Perry Utah
Kanab Utah
Hyde Park Utah
Silver Summit Utah
La Verkin Utah
Morgan Utah