Starting a successful data entry business takes more than knowing how to type fast. Starting a new business requires completing several steps, and obtaining licensing is an important one as it may impact your ability to operate legally.

The question, “what business license do I need to start my data entry business” is a common one, but in reality, your business will likely need multiple licenses, permits, and registrations from federal, state, and local agencies.

Let’s look at which licenses to consider when starting a data entry business.

Related: Guide to starting a data entry business

What Licenses Do You Need to Start a Data Entry Business?

There are several licensing requirements for starting a data entry business at the federal, state, and local level.  While licensing requirements vary by location, here are a few of the common licenses and permits that a data entry business may need:

Legal Entity

One of the first registrations when starting a data entry company should be selecting a legal entity (also called a business structure). A legal entity refers to how a business is organized to operate. The four main types include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC).

Related: What is the difference between a sole proprietorship, partnership, corporation, or LLC?

Business Name Registration

While not necessarily a business license, it’s worth noting that to use a name for a business, many states require the registration of that name. Making matters more complicated, the process of name registration is different by state and the type of business entity.

For instance, sole proprietorships and partnerships generally need to register a business name (also referred to as a Doing Business As, DBA, fictitious name, or assumed name).

Learn: How to register a DBA

Corporations and LLCs register are a little easier because the name is registered when the entity is formed with the state.

General Business License or Permit

Depending on where the business is located, a general business license or permit may be required. A few states require a business license; however, they are more commonly found at the city level.

Learn more: Business license requirements by state

Federal Employer Identification Number

The Federal Employer Identification Number (also referred to as a FEIN, Employer Identification Number, EIN, or Federal Tax ID Number) is a unique nine-digit number that identifies a business with the Internal Revenue Service (IRS).

Any business with employees or those that form as a partnership, corporation, and in many cases an LLC, the business will need to get an EIN.

Sole proprietors and single-owner LLCs without employees can instead use the owner’s social security number.

A FEIN or owner’s social security number is also used to open a bank account,r business credit card, and hire employees.

Learn: How to get an EIN 

Sales Tax Permit or Business Number

While not common in many states when providing a service, like a data-entry business, a state sales tax permit (also referred to as a business tax number or tax ID number) may be needed.  This permit creates an account number with the state’s Department of Revenue (or similarly named state taxing agency) to collect and remit sales tax.

Learn: How to get a sales tax permit in each state

Certificate of Occupancy

Most data entry businesses are operated as home-based businesses, and in some communities, a home occupation permit may be required.

If the data entry business will have employees and operate out of a physical business location, a Certificate of Occupancy (CO) may be needed.  This certificate is typically obtained from the city and/or the county and allows a business to occupy and operate from a building. Before the certificate is issued, the building will need to comply with zoning regulations, building codes, and any other local requirements.

The process of identifying all the licenses and permits necessary to start a data entry business may feel confusing and overwhelming, but be sure to spend the time upfront and not miss any.