All businesses in Alabama are subject to the state’s license and permit requirements, and federal or local requirements may apply as well. If you’re starting a new business in the state, it’s important that you get any small business licenses or permits that your business needs. Here’s a guide to Alabama business licenses and permits.
The purpose of business licenses and permits are to ensure that businesses operate properly with respect to public safety, public health, and the general welfare of the community. Essentially, these help make sure that businesses are obeying the regulations that they’re subject to.
License and permit requirements can vary by industry and location. It’s important that you obtain any that your business is required to have, whether because of its operations or location. Failing to get necessary licenses or permits can result in fines, penalties, and potentially even forced stoppage of your business’s operations.
Business licenses and business permits are similar in many ways, and sometimes the two terms are used interchangeably. Broadly speaking, however, there are some common differences between licenses and permits:
A commercial driver’s requirements serve as a good example of the typical differences between a license and a permit. A truck driver needs to have a commercial driver’s license in order to operate large commercial trucks. The license grants them general permission to drive trucks. If the driver needs to transport an oversized load, they might have to get a permit for the transport. The permit would likely only apply to that one trip, with additional trips possibly requiring their own permits.
Business licenses and permits are issued at all levels of government, and by a variety of government agencies or departments. You’ll need to check license and permit requirements at the federal, state and local levels.
In Alabama, the most commonly needed state license is a Privilege License. Virtually all businesses selling tangible goods, regardless of whether they wholesale or retail, need this license. Service businesses don’t always need it, but should still check with their local county office.
Even though the State of Alabama Privilege License is issued by the state’s Department of Revenue and its License Commission, it’s applied for locally. Applications are submitted to the county probate judge or license commissioner, and you’ll need a separate application for each county which you do business in.
Alabama has many other state license requirements for businesses in various sectors. Your business might need one or several licenses from the state, depending on what the business does.
You can check all state business license requirements in the Handbook of Privilege and Store Licenses. Search your business industry and type (e.g. restaurant) to do a preliminary check, and then consult the table of contents to make sure you look at all places where your business type is listed.
The handbook contains a fairly comprehensive list of the state’s licensing requirements, and you’ll see fees broken out by area population size. You can further confirm what you find by checking the Business Services section of the Alabama Secretary of State’s website. Call Business Services at (334) 242-5324 if you still have questions about state licenses.
Professionals who are required to be licensed to work within the state should check with their state licensing board. For example, physicians should check credential requirements with the Alabama Medical Licensure Commission.
Local governments frequently have their own license and permit requirements. You’ll need to check any town requirements, city requirements and county requirements where your business operates. If you have locations or provide services in multiple counties, check the requirements in each one.
The requirements that local governments have can vary a lot. Some require that all businesses within their jurisdiction have a general business license or permit. It’s also common for local governments to have their own requirements for certain businesses, such as liquor stores, locksmiths and contractors.
Additionally, local government requirements often include more permit requirements than the state does. Your business may need a permit to sell at a festival, renovate or construct a building, or operate certain types of businesses, along with many other activities.
The best way to check local requirements is by talking with the local officials. Contact the following to ask about local business license and permit requirements:
While there’s no federal license or permit that all businesses need, the federal government regulates businesses operating in various industries. Federal licenses and permits are usually awarded through the appropriate federal agency.
For instance, businesses in the following industries often are subject to federal license or permit requirements: ammunition, firearms, and explosives, agriculture, alcoholic beverages, aviation, commercial fisheries, drilling and mining, maritime transportation, fish and wildlife, logistics and transportation, nuclear energy, and radio and television broadcasting. This is not a comprehensive list.
If your business could be subject to a federal requirement on account of the business’s industry, contact the federal agency that oversees your industry. The agency will have details on any licenses or permits that might be needed. The Small Business Administration (SBA) also has a good list of federal license and permit requirements.
While the exact steps required to obtain business licenses and permits in Alabama will depend on the specific licenses and permits you need, here is the general process for both state and federal licenses:
You’ll need to identify which (if any) licenses and permits your Alabama business needs to obtain. Check with the relevant federal, state and local (municipality and county) authorities as detailed above.
Each business license and permit will have its own application process and fees.
The information required when applying can be very basic or extremely extensive. A local business permit might just ask for your business’s name and location, whereas a federal firearms license will require extensive documentation.
The fees can also vary a lot, although there are some typical ranges at each level of government. These ranges are typical but there can be exceptions:
Many licenses can now be applied for online, but some still require a paper form that gets mailed in. The authority that you need a license from will likely have an application (online or paper form) somewhere on their website.
Processing times for business licenses and permits can vary greatly. You may find information on typical processing times from a government website, or by calling the clerk or agency. Try to get an estimate of how long the application’s processing will take, but understand that this usually isn’t a strict guarantee.
State and federal licenses and permits can sometimes be tracked online. Licenses and permits that can’t be tracked online, including most local ones, can be checked by contacting the clerk or agency.
In almost all cases, times aren’t guaranteed unless you specifically pay for expedited processing. There’s usually an additional fee for this, and it’s not always available.
Some state and local licenses and permits don’t need to be renewed, but many do. It’s common for annual renewals to be required, but renewals can alternatively be anywhere from 2 to 5+ years in some cases.
Check whether any licenses or permits your business obtains need to be renewed, and keep track of any renewal deadline. Failing to renew a business license or permit could result in fines or other financial penalties, and potentially even force your business to pause operations.
Before you officially start a business in Alabama, first check for any license or permit requirements that it could be subject to. Be sure to apply for these prior to actually starting your business.
Failing to obtain a required license or permit can result in penalties, fines, legal action, and even business closure if the violation is serious enough. It’s essential to comply with all license and permit regulations.
Yes, sole proprietors are generally subject to many of the same license and permit requirements that LLCs and corporations are. Requirements are typically by industry and location, and less so because of a business’s legal structure.
Yes, many business licenses in Alabama must be renewed. The Alabama Privilege License must be renewed annually, and many other licenses and permits have yearly, bi-yearly, or other renewal requirements. Be sure to keep track of any renewal dates.
This portion of our website is for informational purposes only. Tailor Brands is not a law firm, and none of the information on this website constitutes or is intended to convey legal advice. All statements, opinions, recommendations, and conclusions are solely the expression of the author and provided on an as-is basis. Accordingly, Tailor Brands is not responsible for the information and/or its accuracy or completeness. It also does not indicate any affiliation between Tailor Brands and any other brands, services or logos.
Products
Resources
@2024 Copyright Tailor Brands