January and February are all about meeting annual deadlines for small businesses. It’s important because in the early part of the year, businesses receive a lot of deadline requirements; registrations, license renewals, and taxes to name a few. We are here to help you every step of the way to meet those deadlines.
Small Business Applications
Let’s talk about small business applications. What are they? And why do you need a business license?
Ultimately, if you’re going to conduct business in a city or county, you are essentially stating that you are entitled to certain public benefits.
What public benefits are we talking about?
Most people think of emergency, or fire and rescue. But there are many public services that cities or counties offer, including trash, water, public transportation, and any public service you can think of which a facility might use.
Public services are usually administered by a county or city depending on where you are zoned. Zoning is how the law assigns certain uses to land.
Zoning becomes important in the application package because what is zoned for use for a commercial property is not the same as for a residential one.
In Georgia, there are 159 counties and 535 municipalities. That is hundreds of possible different types of application packages because each city and county has its own application and its own methods of applying. But all of them have very general basic requirements.
Here are the basic elements of the application package:
1. The Application
The Application is designed to gather information about the business, including the owner’s name, the location, the mailing address, the physical location, the responsible parties, how many employees there are, your tax identification number, your estimated gross annual revenues, and your legal structure (for example, if you’re a sole proprietor or an LLC).
Generally, you must have two notarized affidavits, which will be something you have to do every year. There’s the SAVE affidavit, which establishes your entitlement to those public benefits. Your entitlement to these benefits is based on whether you’re a citizen, resident, or you otherwise have paperwork that allows you to conduct business in this location.
There is also the E-Verify affidavit. This is more for employment information. It exists to tell the city or county if you have 10 or more employees or not. That’s important because federal requirements kick in above 10 employees.
2. Application Processing
There’s a two-step process for your application.
Zoning comes first. That’s why the physical location of your business is very important. The officials who’ll inspect your application will look at the zoning ordinances. There are both city and county ordinances that create unique zoning requirements in your area. Those differ dramatically depending on what type of business you want to establish. For example, zoning requirements for adult bookstores might be very different, for example, from a restaurant, apartment building, or law office.
If you pass the zoning requirements, the next step is finance. Essentially you’re paying a fee for the registration of your company. You’re also paying a standard fee, just like you pay a fee for the zoning inspection, and then you make an estimate of what your annual revenue will be for that first year in business. You’ll pay a percentage of that as well. It can be pretty confusing when you’re navigating these waters yourself.
Your fee is based on a combination of factors, including which industrial classification the business is, how many employees you have, and how much revenue you have made. You will pay this amount to the city or county. Once that is done, you’ll receive a certificate of occupation. This is to hang in a visible place of your business.
How a Lawyer Can Help You with Applications
Too often in practice, we see people skipping the application process and then get “caught.” Getting help with your business license is really important because the cost of not doing it can be steep. Unfortunately, in the city’s eyes (using Atlanta as an example), whether or not you knew or didn’t know you needed the business license, you’ve still benefited from the availability of all those public benefits. Meaning you now owe the city money.
Depending on when you started your business and when you discovered you might have a responsibility to make payments, there might be penalties stacked up. Depending on the municipality or the county, there may be even more fees.
Talk to an attorney if you’re not sure if you have a business license before you approach the city or county authority to get your ducks in a row. Knowledge is power and we want to help you figure out how much money you may owe. It is really important to understand the lay of the land before you dive in.
Small Business Renewals
If you’re going to continue business in the city or county limits, then you will want to continue that application protection. Your license will be renewed with the same authority that issued the original occupational tax certificate. That protection is your entitlement to public benefits, as well as authorization to conduct business in accordance with the zoning requirements for your location.
What is so tricky about renewals is that they seem super simple. You would be amazed at the renewal process how easy details are to miss. Deadlines are tricky if you don’t know what they are. I affectionately talk about Atlanta’s deadline as the “Uninvited Valentine,” because it falls on February 15th. If you miss this deadline, you’re responsible for a stiff penalty of $500 per renewal application.
If you’re a small business owner, $500 might be a lot of money. That is unnecessary and you certainly don’t want to have to pay unnecessary fees.
The next tricky part of a renewal application is the paperwork. There are a few moving parts, but if you’ve already done the application, you might remember you had to sign and notarize two affidavits: the SAVE affidavit and the E-Verify affidavit, and you would essentially print those out, and sign them in front of a notary because they must be notarized every year.
PRO-TIP: I have found that you can find a quick notary, usually at a UPS store, some similar mailbox services, or a law office. Certainly don’t sign them on your own. Wait until you are in front of a notary to sign your renewal applications.
What’s really important to do correctly is to find your gross receipts or earnings for the year prior since the tax is based on that number.
We hope you found this blog post informative. If you’d like to learn more about business license applications or renewals in the state of Georgia’s cities and counties, you can watch my LinkedIn lives on these subjects or schedule a free discovery call.
Reach out to Morin Legal at +1 (404) 800-5568 if you have any questions or concerns about small business license applications or renewals.
Selling the American dream of freedom and independence to small business owners since 2013.