Kansas Business License Basics

The path from an idea to a legally operating business in Kansas can be complex. At one time or another, many entrepreneurs before you found themselves overwhelmed by the array of forms, agencies, and decisions involved. But don’t worry—we’re here to simplify the process.

This guide breaks down the Kansas business registration steps into manageable steps. You’ll learn how to choose your business structure and navigate the necessary paperwork, removing the guesswork from starting a business in Kansas.

Related: Starting A Business In Kansas Checklist

Step 1: Choose a Business Structure

When registering a business in Kansas, one of the first decisions that you’ll need to make is choosing a business structure (also called a business entity). A business structure refers to how a company is legally organized to operate, and this choice can impact the owner’s personal liability, taxation, and reporting requirements.

Here, we’ll cover the differences and pros and cons of four common business structures in Kansas: sole proprietorship, general partnership, corporation, and Limited Liability Company (LLC).

Related: Comparison of Business Structures

Sole proprietorship: This is the simplest and most common form of business entity. It’s owned and operated by a single individual, with no legal separation between the owner and the business.

Pros

• Easy and inexpensive to establish.
• Minimal paperwork and regulatory requirements.
• Complete control over business decisions.
• Business profits are taxed only once as personal income.

Cons

• Unlimited personal liability for business debts and liabilities.
• Fewer sources of capital.
• Limited growth potential, as the business is tied to the owner.

Related: How to start a Kansas sole proprietorship

General partnership: A general partnership consists of two or more individuals who share the management, profits, and liabilities of a business.

Pros

• Simple and affordable to set up.
• Shared decision-making and management responsibilities.
• Business profits are taxed only once as personal income for each partner.

Cons

• Unlimited personal liability for all partners, even for debts or liabilities incurred by a single partner.
• Potential for conflicts between partners.
• Fewer sources of capital.

Corporation: A corporation is a separate legal entity owned by shareholders. It provides limited liability protection and the ability to raise capital by selling shares.

Pros

• Limited liability for shareholders, protecting personal assets from business debts.
• Ability to raise capital through the sale of shares.
• Longevity, as the corporation continues to exist even if the founder or shareholders leave.

Cons

• Most complex and expensive to establish and maintain.
• Increased regulations and reporting requirements.
• Potential double taxation: corporate income is taxed, and shareholders also pay taxes on dividends.

Related: How to form a Kansas corporation

Limited Liability Company (LLC): An LLC combines the limited liability protection of a corporation with the tax advantages and flexibility of a partnership or sole proprietorship.

Pros

• Limited liability for members, protecting personal assets from business debts.
• Pass-through taxation: business profits are taxed only once as personal income for each member.
• Flexibility in management and decision-making structure.

Cons

• It is more complex and costly to set up than sole proprietorships or general partnerships (but less than a corporation).

Related: How to form a Kansas LLC

Step 2: Federal Employer Identification Number

The Federal Employer Identification Number (FEIN) is a unique nine-digit identifier the Internal Revenue Service (IRS) assigns to businesses in the United States.

You’ll need an EIN if:

• Your business has employees
• You’ve structured your business as a corporation, partnership, or multi-member LLC

For sole proprietorships or single-member LLCs without employees, the owner’s Social Security number typically serves as the tax identifier. However, some may choose to obtain an EIN for privacy or business reasons.

Obtaining an EIN is straightforward and comes at no cost.

Apply for an EIN

Step 3: Occupational Licensing

In Kansas, like many other states, certain professions require individuals to obtain a license before they can practice. These licenses are typically issued by state agencies or boards and serve to ensure that professionals meet specific standards of education, training, and experience.

While this list is not exhaustive, it covers some of the most common professions that require occupational licensing in Kansas:

• Healthcare: Doctors, nurses, dentists, pharmacists, optometrists, physical therapists, occupational therapists, speech-language pathologists, and many other healthcare professionals.
• Legal: Attorneys, paralegals, and legal assistants.
• Financial: Accountants, insurance agents, and securities brokers.
• Construction: Architects, engineers, contractors, and plumbers.
• Cosmetology: Hairdressers, cosmetologists, and nail technicians.
• Real Estate: Real estate agents and brokers.
• Education: Teachers, counselors, and administrators.

To determine the exact licensing requirements for a particular profession in Kansas, the best place to start is the Kansas Department of Labor.

Step 4: Kansas Business Tax License

The Kansas Business Tax License authorizes businesses to collect and remit various state taxes, including sales tax, use tax, and withholding tax. It’s one of the most common registrations for new businesses in Kansas and is obtained by filing a Kansas Business Tax Application (Form CR-16) with the Kansas Department of Revenue.

Who Needs This License?

Businesses that:

• Sell tangible personal property (goods)
• Charge admission fees for events or venues
• Provide services that are subject to Kansas sales tax

To register, complete the Kansas Business Tax Application

Step 5: Kansas Resale Exemption Certificate

After registering for the Kansas Business Tax Application, many businesses will also want to get a Kansas Resale Exemption Certificate. This certificate is particularly useful for retailers and wholesalers, as it allows them to purchase merchandise intended for resale without paying sales tax at the time of purchase.

Who Should Obtain This Certificate?

• Retailers purchasing inventory for resale
• Wholesalers buying goods to sell to retailers
• Manufacturers purchasing components to be incorporated into finished products for sale

Register for a Kansas Resale Exemption Certificate

Step 6: Local Business Licenses

While Kansas does not require a general state-wide business license, many municipalities have their own licensing requirements that vary based on the business type and location. Here’s an overview of a few cities in Kansas:

• Wichita:  Certain types of businesses in the City of Wichita require licensing, a few of which include ice cream vendors, businesses selling alcohol, massage therapists, pawnbrokers, and many others. 
• Overland Park: The City of Overland Park requires licensing for businesses such as contractors, alcohol-selling businesses, pawnbrokers, and home-based businesses. 
• Kansas City: All businesses operating within the Kansas City, KS city limits are required to file an Occupation Tax application with the Neighborhood Resource Center office. Some activities, such as businesses having coin-operated devices, mobile food vendors, pawn shops, and others, have additional licensing requirements.

It’s important to note that licensing fees vary by business type and location. Business owners should contact their local city offices for specific requirements and current fee structures.

Step 7: Local Building & Zoning Permits

When registering your business in Kansas and setting up a location, you’ll need to understand local building and zoning requirements. These regulations ensure your business operates in an appropriate area and meets safety standards.

A few things to consider:

Zoning Considerations

• Local Zoning Laws: Before committing to a building, verify if your business activity is allowed in your chosen location.
• Zoning Districts: Ensure your business aligns with permitted uses in your zone (e.g., residential, commercial, industrial).
• Conditional Use Permits: Apply if your business needs special permission to operate in a specific zone.

Building Requirements

• Building Permits: Required for new construction or major renovations.
• Occupancy Permits: Needed before operating in a new or modified space; ensures safety code compliance.
• Inspections: May include structural, electrical, plumbing, and fire safety checks.

It’s worth noting that these requirements don’t only apply to businesses operating out of a commercial location. In some areas, home-based businesses need to get a home occupation permit before operating a business.