The requirements to operate a business in Missouri vary significantly depending on what the company does and where it is located. Additionally, a business will likely need multiple licenses or registrations to operate legally.
Let’s look at the different types of licenses and registrations a business may need to operate in Missouri.
General Business Licenses
In the state of Missouri, there is no statewide business license required, however, you will find many towns and cities that require a local business license.
In some areas, all businesses (including home-based businesses) will need to register, while others only require certain types of businesses to register.
Check with your local City Hall or Economic Development Office for more details on business requirements.
Is a business license the same as the business entity?
A business license is not the same as a business entity. The business entity is how the business is legally formed to operate, usually as a sole proprietorship, partnership, corporation, or Limited Liability Company (LLC). Business licenses are needed in addition to the business entity.
Business Tax Registration
The Missouri Tax Registration (commonly referred to as the state sales tax number or sales tax license) is needed when a business makes retail sales or has employees.
Registration for the Business Tax Registration is through the Missouri Department of Revenue website.
Sales Tax Exemption Certificate
Businesses purchasing merchandise to resell will usually want to obtain a Missouri Sales Tax Exemption Certificate in order to not pay sales tax for merchandise that is being resold to customers.
County Merchant’s License
In addition to the state business tax registration, several counties also require businesses to obtain a business license. Under Missouri Law, §150.010 RSMo, a merchant is defined as any person, corporation, co-partnership, or association of persons, that sells goods, wares, and merchandise at any store, stand or place occupied for that purpose.
License fees vary by county. Check with your County Clerk or Collector’s Office for more information.
While not a license specifically for a business, a professional license allows an individual to offer certain services within the state such as accountants, barbers, HVAC contractors, interior designers, plumbers, tattoo artists, and more.
More information with professional licensing requirements is available from the Missouri Department of Professional Regulations.
Federal Employer Identification Number (FEIN)
A Federal Employer Identification Number (FEIN) is a unique nine-digit number for a business that is registered from the Internal Revenue Service (IRS). This number is similar to a Social Security Number for an individual, except it identifies a business.
Not every business will need to get an EIN. Sole Proprietorships that do not have employees can use the owner’s Social Security Number. All other entities will need to get one.
There is no cost to apply for an EIN through the IRS, and it takes about five minutes.
Fictitious Business Name Registration
Sole Proprietorships and Partnerships operating under a business name that is different from the full name of the owner(s) will need to register for a Fictitious Name (also known as a Doing Business As, DBA, Assumed Name, or Trade Name) with the Missouri Secretary of State’s Office.
If your business plans to hire employees in Missouri, there are a few steps to register.
For starters, when filling out the Business Tax Registration with the Missouri Department of Revenue, there are some additional questions to fill out.
Next, a business will need to complete the Employer Registration through the Missouri Department of Labor and Industrial Relations.
All employers in Missouri with five or more employees (full or part-time) must purchase workers’ compensation insurance.
Another aspect of starting a business is to operate from a physical place of business. Each city and county has different requirements, however, clearance is generally needed to operate in a commercial location. Additionally, some home-based businesses will also need to apply for a home occupation permit.
As you can see, there may be a lot of requirements to start your business. If you have questions, be sure to check with your local Small Business Development Center, local Economic Development Agency, or City Hall.
How much is a business license in Missouri?
If you’re looking to start a business in the state of Missouri, one of your primary concerns might be the cost of obtaining a business license. This is a crucial step in legitimizing your business and ensuring you’re operating within the boundaries of the law.
The answer to the cost of obtaining a business license in Missouri varies depending on the type of business and the specific city or county in which you plan to operate. There is no one-size-fits-all answer because different types of businesses require different licenses, and the cost for these can vary greatly.
For instance, if you’re planning on starting a retail business in the city of Kansas City, you would need to apply for a business license (Form RD-100) through the Revenue Division of the City of Kansas City, Missouri. The cost for a general business license is around $50 annually, with a $25 application fee.
If you plan to open a restaurant or bar, you will also need to consider the cost of a liquor license, which can range from $450 to $600 annually in Kansas City. However, these costs can vary in other cities or counties within Missouri.
Additionally, certain professions, like real estate brokers, barbers, and certain types of contractors, require professional licenses. These professional licenses often have their own separate fees and requirements, which may be regulated by different state agencies.
Given the variability in licensing costs, it’s crucial to research the specific license your business needs and the cost associated with it. You can typically find this information by visiting the official state, county, or city websites.
Remember, while this provides a general idea of the costs associated with obtaining a business license in Missouri, prices can fluctuate over time, and additional requirements or fees may apply. Therefore, it is recommended to contact your local city or county clerk’s office to get the most accurate and up-to-date information.