Understanding Business Licenses, Permits, and Compliance in Ohio

Starting and operating a business in Ohio requires navigating various legal requirements, including obtaining the proper licenses and permits. Compliance with state and local regulations is essential to avoid fines, penalties, and potential business shutdowns. This article outlines key licensing and compliance considerations for Ohio business owners.

1. Business Registration Requirements

Before applying for any licenses or permits, business owners must register their entity with the Ohio Secretary of State. The type of registration depends on the business structure:

• Sole Proprietorships and General Partnerships: Registration with the state is not required unless operating under a trade name ("doing business as" or DBA).

• LLCs, Corporations, and Limited Partnerships: Must register their formation documents with the Ohio Secretary of State.

• Trade Name and Fictitious Name Registration: If using a name different from the legal business name, a business must register the trade name with the Secretary of State.

1. Ohio Business Licenses and Permits

Business owners may need different licenses at the state, county, or city level, depending on their industry and location. Common licenses and permits include:

• Vendor’s License (Sales Tax Permit): Required for businesses selling tangible goods or taxable services. This license is obtained through the Ohio Department of Taxation.

• Professional and Occupational Licenses: Certain professions, such as real estate agents, contractors, and health practitioners, require specific state licenses.

• Health and Food Service Permits: Businesses involved in food preparation, restaurants, or grocery stores must obtain health department permits from their county or city health department.

• Zoning and Building Permits: Required for businesses operating in physical locations to ensure compliance with local zoning laws and building codes.

• Home-Based Business Permits: Some cities and counties regulate home-based businesses and may require special zoning permits.

1. Ohio Tax Compliance

Proper tax registration is essential to business compliance. Ohio businesses must be aware of:

• State and Local Taxes: Businesses must register with the Ohio Department of Taxation for state sales tax, employer withholding tax, and commercial activity tax (CAT) if applicable.

• Municipal Income Taxes: Many Ohio cities impose income taxes on businesses operating within their jurisdictions.

• Federal Tax ID (EIN): Businesses with employees or multiple owners must obtain an Employer Identification Number (EIN) from the IRS.

1. Employment Law Compliance

Ohio businesses with employees must comply with various labor laws, including:

• Workers’ Compensation Insurance: Required for most businesses with employees, obtained through the Ohio Bureau of Workers' Compensation (BWC).

• Unemployment Insurance: Employers must register with the Ohio Department of Job and Family Services (ODJFS) to pay unemployment insurance tax.

• Fair Labor Standards Act (FLSA) Compliance: Employers must adhere to wage and hour laws, including minimum wage and overtime requirements.

1. Ongoing Compliance and Renewals

Many licenses and permits require renewal. Business owners should:

• Keep track of renewal deadlines for state and local licenses.

• Maintain proper records of tax filings and payments.

• Regularly review zoning and regulatory changes that may affect their business operations.

Ohio business owners must proactively manage licensing, permits, and compliance obligations to avoid costly legal issues. Consulting with a business attorney or regulatory expert can ensure that all necessary requirements are met, allowing business owners to focus on growth and success. Attorney Austin WarehimeEQUES® Law Group