Business Licenses and Permits

A recent blog post claimed that 86% of global 100 companies use at least one form of social media, and 75% of U.S. small businesses have a company page on a social networking site.  It’s no surprise, then, that huge increases in business activity in the area of social media have given rise to social media consulting businesses.

Many social media consultants operate as independent contractors rather than company employees.  This approach leads to the question; does a social media consulting business require a business license?

Answer:  It depends.

Consulting isn’t a highly regulated business.  However, most cities and towns that have a general business license requirement claim turf where social networking consultants are concerned.

For instance, social media consultant businesses conducting business in Fresno, California are required to maintain a general business license (Business Tax Certificate).  The City of Fresno’s website provides an FAQ to help businesses determine whether they must comply which includes the question:  “Am I receiving revenue for providing personal, business, or other services, including consulting and lobbying services?…  If you answered ‘yes’ to any of the above questions, and you do not already have a Business Tax Certificate for the activities mentioned above, you should contact the City of Fresno…”

In some local jurisdictions, other licenses and permits may be required as well.  For instance, in Los Angeles County, California, a social media consulting business with business personal property and fixtures that cost $100,000 or more must file a Business Property Statement each year by April 1.

If you’re planning to launch a social media consulting business, a good rule of thumb is to do your homework and ensure that you meet all local, state, and federal compliance requirements.

Steve Elias, Team Leader-Business License Research Team, Corporation Service Company