How to Get a Small Business License in Kentucky

Many entrepreneurs have decided to form their business in the Bluegrass State. If you're looking to join them, you'll need to complete some steps to officially start your business in Kentucky. One of the most important tasks ahead of you is applying for the licenses and permits your small business needs to legally operate in the state.

Here's an overview of the most common licenses, permits, and registrations a Kentucky small business needs to obtain.

Which Business Licenses Do You Need for Your Small Business?

When starting a business in Kentucky, you must:

• register your business entity with the Kentucky Secretary of State (SOS)
• file taxes with the Kentucky Department of Revenue (DOR), and
• apply for business licenses and permits with your state, county, and town.

The types of licenses and permits your business must apply for depends on your business structure, industry, and location. The main types of business licenses, permits, and registrations are:

• general business licenses
• professional licenses
• business registration certificate
• seller's permits (sometimes called "sales tax certificate")
• zoning and building permits, and
• doing business as (DBA) registrations.

The start my business section of the Kentucky Business OneStop website is a great resource to find information about the legal requirements for your small business in Kentucky. The section includes information about:

• state tax registration requirements
• occupational licenses and permits
• environmental licenses and permits
• building and zoning permits, and
• local requirements.

(For more general guidance, see our article on the legal requirements for starting a small business.)

General Business License in Kentucky

Kentucky, like many other states, doesn't issue a statewide general business license. But your business will likely need to obtain a state or local license based on its location or industry.

Some cities require businesses to obtain a general business license if they plan to operate within city limits. For instance, the City of Lexington requires businesses to apply for and obtain a business permit (also known as an "occupational license") before opening.

On the other hand, the City of Louisville issues business licenses and permits based on business activities. For example, if you operate a restaurant in Louisville, then you'll need to get a food service permit. If you open a pawnshop, then you'll need to apply for a pawnbroker/secondhand dealer business license.

Depending on your business, you might need to get multiple licenses at the state, county, and city levels. You should contact your city and county to check the specific business licensing requirements in your area.

Professional and Occupational Licenses for Businesses and Individuals in Kentucky

Some professions and occupations require individuals and businesses to obtain special licensing or certifications to practice. If you're a member of one of the professions or occupations with special requirements, you must obtain the necessary authorizations before you start your business.

The Kentucky Public Protection Cabinet (PPC) website houses a number of state agencies that issue and regulate various industries, including:

• the Department of Financial Institutions: This department licenses and regulates mortgage brokers, loan companies, investment advisers, and other individuals and institutions in the finance industry.
• the Department of Housing, Buildings, and Construction: This department licenses and regulates individuals and companies engaged in building inspections, electrical, HVAC, plumbing, fire, and other similar areas.
• the Kentucky Boxing and Wrestling Commission: This commission licenses and regulates unarmed combat sports athletes, trainers, promoters, referees, judges, and other participants.
• the Department of Insurance: This department licenses and regulates insurance agents and professionals.
• the Kentucky Horse Racing Commission: This commission licenses and regulates horse racing and wagering.
• the Department of Professional Licensing (DOPL): This department oversees around 25 professional boards, including boards for licensed professional counselors, private investigators, podiatry, geologists, and more.
• the Department of Alcoholic Beverage Control: This department licenses and regulates businesses that manufacture, supply, transport, sell, or provide alcohol for use or consumption.
• the Department of Charitable Gaming: This department licenses and regulates individuals and companies engaged in charitable gaming, including manufacturers and distributors, as well as facilities and events.
• the Kentucky Real Estate Authority: This authority licenses and regulates real estate appraisers, auctioneers, home inspectors, sales associates, brokers, and other real estate professionals.

You can apply for and renew your professional or occupational license through the DOPL's eServices as well as through other individual agencies.

The PPC doesn't oversee licensing for every profession and occupation. You should check with the authority in charge of your profession or occupation for more information about licensing. You'll likely be able to apply for, renew, and manage your license online.

For help figuring out which regulatory licenses and permits could apply to your particular business, check the occupational licenses/permits section of the Kentucky OneStop Business Portal.

Kentucky Sales Tax Registration

If your Kentucky business sells tangible personal property, digital property, or taxable services, then you'll need to collect and pay sales tax in Kentucky. Remote sellers that annually either gross more than $100,000 or make more than 200 sales must also collect and pay sales tax.

You can register your business with the DOR using the Kentucky Tax Registration Application. You can also file your application online by creating an account through the Kentucky Online Gateway (KOG).

By registering through the KOG, you can also register for other taxes like:

• wage withholding
• corporation income tax
• limited liability entity tax, and
• other business taxes.

You can find more details on the DOR's sales and use tax webpage.

Local Zoning and Building Permits

In some cases, like if you'll be building or renovating a space, you'll need to get special zoning and building permits. Some cities require businesses to have zoning approval and a certificate of occupancy (CO) or a similar document before your business license is approved or you can use your commercial space. You'll probably need to submit a fee along with your CO application.

For example, the City of Lexington requires all businesses to have a CO. You'll either need to apply for a new CO or submit your current CO along with your occupational license application. In Lexington, your CO must obtain a CO before applying for its business license.

Zoning laws. If your type of business isn't in line with the zoning code, you can find another space or potentially apply for a special use permit. A special permit can provide your business with an exception to the current use laws.

Building code. You can work with local departments and agencies to apply for building and construction permits. You'll likely need to have inspections related to your space's structural, electrical, mechanical, and plumbing features.

If you're leasing a commercial space, make sure you have a paragraph or section in the commercial lease that ensures the building and your use of the space are in line with the zoning laws.

File a Certificate of Assumed Name in Kentucky

If you plan to do business under a name that's different than your legal name, you must file a certificate of assumed name. Sole proprietors must file the certificate with the county clerk where they conduct their business. General partnerships, limited partnerships, limited liability companies (LLCs), corporations, and other business entities must file with the SOS. (Ky. Rev. Stat. § 365.015 (2023).)

A real "legal name" means something different when applied to each business structure:

• Sole proprietor: The legal name includes the sole proprietor's last name.
• General partnership: The legal name includes either the partners' last names or the name listed on a statement of partnership authority.
• Limited partnership: The legal name is the name listed in the partnership's certificate of limited partnership.
• LLC: The legal name is the name listed in the company's articles of organization.
• Corporation: The legal name is the name listed in the corporation's articles of incorporation.

(Ky. Rev. Stat. § 365.015 (2023).)

You can file for your assumed name (also known as a "DBA") with the SOS using the certificate of assumed name form. If you're filing with your county, you should contact your county clerk or visit your county's website to find the form you need to file your assumed name certificate.

Your certificate of assumed name will be good for five years and can be renewed. As of 2023, the fee to file a certificate of assumed name with the SOS is $20. The fee to file a certificate of assumed name with the county clerk is $33.

Other Licenses and Permits Your Business Might Need

Apart from the licenses and permits discussed above, you could need to comply with other federal, state, and local laws and regulations. For instance, your business might need to obtain special licensing or follow special rules related to:

• public safety
• public health, and
• the environment.

If your industry is highly regulated, you should expect to apply for multiple licenses, permits, and registrations. It's a good idea to contact your federal, state, and local governments to see which regulatory requirements apply to your business.

Kentucky Small Business Information

In Kentucky, you have many public resources available to your small business:

• The Kentucky Cabinet for Economic Development (CED) assists small businesses (among other functions). On the CED website, you can find links to helpful resources like the Kentucky Innovation Network, information on business incentives and financial programs, and a map and database of available business locations.
• The Kentucky Small Business Development Center (SBDC) guides you on how to start, fund, and grow your business. The website also has information about free online training sessions and confidential business counseling services. The SBDC has more than a dozen regional offices throughout the state. The Kentucky SBDC is part of a national network of small business development centers.
• The U.S. Small Business Administration (SBA) has a district office in Louisville. The office's website lists upcoming events, resources, and news for small businesses.

You can also find more information on how to start and operate your business in our website's small business section. If you're looking for further education, you can also find expanded information in many Nolo books, such as Legal Guide for Starting & Running a Small Business, by Fred S. Steingold, and The Small Business Start-Up Kit, by Peri Pakroo.

If you need answers to legal questions that are specific to your small business, consider speaking with a Kentucky business lawyer. They can help you obtain the licenses, permits, and registrations you need at every government level.