Launching a business in Oklahoma involves more than just a great concept – it requires proper registration to operate legally. However, the array of forms, licenses, and regulations can be difficult to navigate for first-time (or even experienced) business owners.
To help simplify the process, we’ll explain each step, from deciding on your business structure to securing appropriate licenses. By following this guide, you’ll be able to handle the registration process confidently and set your Oklahoma business on the path to success.
Related: Starting A Business In Oklahoma Checklist
Step 1: Business Structure
The first step in registering a business in Oklahoma is to set up the business structure (also called a business entity), which is how a company is legally organized to do business. Selecting the appropriate business structure can impact your personal liability, tax obligations, and administrative requirements. In Oklahoma, the four common types of business entities are 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 structure. A sole proprietorship is owned and operated by a single individual who controls the business and is personally responsible for all business debts and liabilities. The pros of a sole proprietorship include ease of formation, minimal administrative and reporting requirements, and pass-through taxation, where profits are taxed only at the individual level. The cons are unlimited personal liability and limited growth potential due to the reliance on the owner’s personal credit and assets.
Related: How to Start an Oklahoma Sole Proprietorship
General partnership: A general partnership consists of two or more individuals who share the ownership, management, and profits of a business. Each partner is personally liable for the business’s debts and liabilities. The pros include ease of formation, shared management and financial responsibilities, and pass-through taxation. The cons involve unlimited personal liability for all partners, potential disputes over decision-making, and the lack of continuity if a partner leaves or dies.
Corporation: A corporation is a separate legal entity owned by shareholders, which provides limited liability protection to its owners. The pros of a corporation include limited personal liability, the ability to access capital through the issuance of stock, and the potential for perpetual existence. The cons include complex formation and administrative requirements.
Related: How to Form an Oklahoma Corporation
Limited Liability Company (LLC): An LLC is a hybrid business entity that combines the limited liability of a corporation with the pass-through taxation of a sole proprietorship or partnership. The pros of an LLC include limited personal liability for members, pass-through taxation, and flexible management structures. The cons involve more complex formation and higher fees than sole proprietorships and general partnerships.
Related: How to Form an Oklahoma LLC
Step 2: Business Name
After choosing a business structure, selecting and registering a business name is often the next step for many Oklahoma businesses. This process varies depending on the type of business entity.
Sole proprietorships, the most common business structure to register a name, can use the owner’s legal name (which doesn’t have to be registered). However, if a sole proprietor wants to operate under a specific business name, they must register it. For instance, if Amy Pond starts a travel agency, she wouldn’t need to register if she operates under her own name. However, if she decides to call her business “Amy’s Worldwide Travels,” registration will be necessary.
Sole proprietors in Oklahoma have two options for name registration:
- Trade Name: The Trade Name is registered with the Secretary of State and provides the strongest protection, preventing other state businesses from using the same name. Before registering, an Oklahoma business name search verifies the name you want is available.
- Fictitious Name: This involves filing a Certificate of Fictitious Name with the County Clerk where the business is located. Unlike the Trade Name, a Fictitious Name can be registered by anyone.
General partnerships typically register a Trade Name with the Secretary of State unless the business name consists only of the full names of all partners.
Corporations and Limited Liability Companies (LLCs) usually don’t need to register a separate business name, as they create a unique entity name during formation. However, they might register a “doing business as” (DBA) name if they want to operate under an additional name or brand.
Step 3: Federal Employer Identification Number
For many Oklahoma businesses, the next step is obtaining a Federal Employer Identification Number (FEIN), also known as an Employer Identification Number (EIN). This unique nine-digit number, issued by the Internal Revenue Service (IRS), is a business identifier for tax purposes.
You need an EIN if:
- Your business has employees
- Your business is structured as a corporation, partnership, or multi-member LLC
While sole proprietorships and single-member LLCs without employees can use the owner’s Social Security Number for tax purposes, they may still opt for an EIN. This can be beneficial for keeping the owner’s Social Security Number from bein used on any business documents.
Obtaining an EIN is a straightforward process that doesn’t cost anything. The most efficient method is to apply online through the IRS website, which typically takes only a few minutes to complete. For those who prefer alternative methods, applications can be submitted by mail or fax using Form SS-4, although these options generally take longer to process.
Step 4: Professional Licensing
Many professions in Oklahoma require specific licenses or certifications before practitioners can legally offer their services. The Oklahoma Department of Licensing and Regulation oversees most professional licensing in the state. Some professions that typically require licensing include:
- Architects (Oklahoma Board of Architects, Landscape Architects and Registered Interior Designers)
- Attorneys (Oklahoma Bar Association)
- Accountants (Oklahoma Accountancy Board)
- Real Estate Agents (Oklahoma Real Estate Commission)
- Cosmetologists and Barbers (Oklahoma State Board of Cosmetology and Barbering)
- Nurses (Oklahoma Board of Nursing)
Before beginning practice in Oklahoma, professionals should check with the relevant licensing board for their specific field to ensure compliance with state regulations.
Step 5: Sales Tax Permit
Businesses selling products or certain services in Oklahoma must obtain an Oklahoma Sales or Use Tax Permit from the Oklahoma Tax Commission (OTC). This permit allows businesses to collect and remit sales tax on transactions.
Who needs to register:
- Retail stores
- Online sellers with Oklahoma nexus
- Service providers offering taxable services
- Restaurants and food service businesses
- Hotels and accommodation providers
Step 6: Resale Certificate
An Oklahoma Resale Certificate is a valuable document for businesses that purchase merchandise intending to resell it. This certificate allows these businesses to buy goods without paying sales tax at the time of purchase. Instead, they collect sales tax from the end customer when the item is sold to their customer.
Who needs a Resale Certificate:
- Retailers
- Wholesalers
- Manufacturers who resell finished products
To obtain an Oklahoma Resale Certificate, businesses must first register for a sales tax permit with the Oklahoma Tax Commission. Once registered, they can request a Resale Certificate through the same agency.
Step 7: Local Business Licenses
While there isn’t a general business license at the state level in Oklahoma, most cities and towns require local business licenses. These licenses vary by location and business type:
- General Business License: Often issued by a city’s Finance Department or City Clerk’s office. This license allows businesses to operate within city limits. For example, Oklahoma City requires most businesses to obtain a general business license from the City Clerk’s office.
- Food Service License: This license is usually issued by a city or county Health Department and is for restaurants, food trucks, and other food service establishments. The Oklahoma City-County Health Department issues food service licenses for businesses in Oklahoma County.
- Contractor License: Often managed by a city’s Development Services or Inspections Department. This license is required for construction and renovation work. The City of Tulsa requires contractors to obtain a license from their Development Services Department.
- Peddler or Solicitor License: Typically issued by a city’s Police Department or City Clerk’s office. This license allows door-to-door sales or mobile vending. For example, the City of Norman requires a Peddler’s License from their City Clerk’s office for door-to-door sales.
Remember to check with your specific city or town for their unique licensing requirements, which vary significantly between locations.
Step 8: Local Building & Zoning Permits
Before finalizing a location for your business, it’s important to understand and comply with local building and zoning regulations. These rules ensure that businesses operate in appropriate areas and meet safety standards. Here are key aspects to consider:
Zoning Regulations: Zoning laws dictate how property in specific areas can be used and where different types of businesses can operate. Check with your local Planning or Zoning Department to ensure your chosen location is zoned for your type of business. This applies to commercial properties and sometimes home-based businesses.
Home-Based Businesses: These are typically issued by a city’s Planning or Development Services Department. This license permits operating a business from a residential property. The City of Edmond, for instance, requires home-based businesses to obtain a Home Occupation License from their Planning Department.
Building Permits: If you plan to construct a new building or modify an existing one, you’ll likely need building permits. These ensure that construction meets local safety codes and standards. The local Building Department or Development Services typically handles these permits.
Certificate of Occupancy: Many municipalities require a Certificate of Occupancy before a business can operate in a building. This document certifies that the building is safe and complies with all relevant codes. It’s often issued after final inspections are completed.
Signage Permits: If you plan to install business signs, you may need permits. Many areas regulate sign size, placement, and illumination.
Understanding these requirements before committing to a location can save time and resources in the long run. Always consult with local authorities to ensure full compliance with all building and zoning regulations.
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