Starting a small business in Kentucky often means registering with several federal, state, and local agencies. Let’s review common Kentucky business license registrations so your business starts off right.
Related: Guide to starting a business in Kentucky
Setting Up the Business
Sole proprietorship: In Kentucky, a sole proprietorship is an unincorporated business owned by a single individual. The owner has complete control over the business but is personally liable for all debts and obligations. No formal registration is required, making it the simplest and most common form of business structure.
General partnership: A general partnership in Kentucky is an unincorporated business owned by two or more individuals who share management responsibilities, profits, and losses. Partners have unlimited personal liability for the partnership’s debts and obligations. No formal registration is required, but a partnership agreement is recommended to outline the partners’ roles and responsibilities
Corporation: A corporation in Kentucky is a legal entity separate from its owners, providing the owners (shareholders) with limited liability protection. Corporations are the most complex business structure to set up and have specific administrative requirements.
Limited Liability Company (LLC): An LLC in Kentucky combines aspects of sole proprietorships and corporations, offering flexibility in management and taxation. Owners, called members, have limited personal liability for the LLC’s debts and obligations, but they aren’t as complex as corporations.
Related: Comparison of Business Structures
What Licenses Do Kentucky Businesses Need?
With the business structure out of the way, we can begin looking at the different types of registrations businesses in Kentucky may need. There isn’t a standard business license, as requirements vary depending on where the business is located and what it does. Here is a general overview of the different registrations your business may need.
There is no general of . Below are a few cities that have .
- : The -Fayette Urban Department of Finance requires businesses operating in the to obtain an . A Certificate of Occupancy may also be necessary in order to use a building or space legally.
- Bowling Green: Any within the City or City Annex is required to complete the application.
- Owensboro: All businesses will need to obtain an from the City of Owensboro. Additionally, businesses such as junk yards, towing services, bowling alleys, and more will need to register with the city.
- Covington: To do in the City of Covington, businesses will need to apply for an .
- Hopkinsville: An is required for all businesses operating within the of Hopkinsville. The initial registration fee is $100.
For as little as $99, you can save a lot of time and know your business is in compliance with local, state, and federal requirements.
Assumed Name Registration
While not a , it’s common for sole proprietorships and general partnerships in Kentucky to operate under a name other than the full name of the owner(s). In this case they will want to obtain a Kentucky Certificate of Assumed Name (also known as a Doing Business As, DBA, or Fictional Business Name) with the ‘s Office in the where the is located.
Building & Zoning Permits
Zoning: In Kentucky, zoning laws are regulated by local governments, such as counties and cities. Check with your local planning and zoning department to ensure your business activities are allowed with the zoning district. For home-based businesses, review the local zoning ordinance, as some areas may require a conditional use permit or home occupation permit for certain types of home-based businesses.
Building Permit: A building permit is required for most construction, alterations, or additions to structures in Kentucky. To obtain a permit, submit plans, specifications, and an application to your local building department or inspection office.
Signage Permit: Most local units of government in Kentucky regulate the size, location, and type of business signage. Before installing any signs, check with your local planning and zoning department or building inspection office for specific requirements and to obtain a sign permit.
Account
All businesses in will need to register for Accounts with the of . Registering for a Account will allow a to obtain a to sell products (both physical and digital) and offer certain services.
After registering, a will receive a Commonwealth Identifier (CBI), which is a unique identification number for the .
Resale Certificate
Businesses purchasing merchandise to resell will want to obtain a Resale Certificate. This allows them to avoid paying sales tax on the inventory they are reselling to customers.
A variety of professions in the are regulated and need to be registered before offering certain services. A few common occupations that require licensing in include; detectives, cosmetologists, barbers, architects, massage therapists, and many more. Additional information, fees, and for professions are available from the Kentucky Office of Occupations & Professions.
Employer Identification Number (EIN)
The Kentucky Employer Identification Number (EIN), also known as a Federal Tax Identification Number, is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses operating in Kentucky. It is used for tax filing and reporting purposes, similar to how an individual uses a Social Security number. Companies can apply for an EIN through the IRS website or by submitting a paper form.
Next Steps
While it’s a good start, there are so many different licenses that may be needed. Double-check with the City Clerk’s Office, Chamber of Commerce, and/or Economic Development office in your area before opening your doors.
