Are you wondering how to get a license for a courier business? If YES, here are 5 steps to get business license for a courier service in 2021. Indeed starting and running a successful courier business can offer many benefits. It is also possible to start this business on a part-time basis.
If you think you know your local area well, then you may have what it takes to succeed in this career. A courier service is a business that ensures the movement and shipping of packages and important documents to their intended destinations.
According to reliable industry reports, the courier and local delivery service in the United States industry witnessed a 4.7 percent growth from 2015 to 2020. Note that this takes into consideration both bigger couriers companies and smaller local delivery companies. The steady rise in consumer spending, corporate profit, and a massive number of businesses in operation within these periods have propelled enormous growth in this industry.
Note that courier businesses may work with a vast number of businesses, but they have specific service areas that they understand very well. Pharmacies, veterinarians, realtors, lawyers, and many other businesses steadily leverage couriers for convenience and speed. They also don’t operate within normal business hours; a good number of them may deliver at night, too.
Do not also forget that your courier business will need to get certain business licenses and permits. Coupled with courier specific licenses, there may be general business registrations for these businesses as well. It is imperative you obtain a license for your courier service even before you start offering your services to clients.
However, try not to confuse a business license with your business registration. Note that the registration is what establishes your operation as an official company with the state. But a business license is a piece of paper that provides you with the legal backings to perform a specific service or offer a certain product to the masses. Most times, a business license is mandatory for businesses in the United States.
Steps to Get a Business License for a Courier Service
To get a business license for a courier service, you have to first identify requirements that apply to your courier business in all the relevant jurisdictions. These steps will put you through the process.
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Register Your Name
Please note that the first thing to do is to register your business name. If you are a sole proprietor doing business under your own name, then you might not need to register your name. But if you are doing business under a business name, it is imperative you register your name and business with the secretary of your state.
Form Your Legal Entity
While still in the process of registering your business name, you will also have to choose a legal entity that suits your business needs. If you intend to do business as an LLC or corporation, then you are expected to form your business entity. This requires filing an application and paying a fee to the secretary of state.
Note that a good number of businesses prefer to form their business in the states where they are located, however, you may decide to form in another. Howbeit, remember to talk to your tax and legal advisors if you are considering forming in a different state.
Search Licensing Requirements
Note that a courier service may need both a business license and a driving license, but it depends on your business location and the clients you intend to service. Nonetheless, it is advisable you seek confirmation whether both are needed, as being unlicensed may leave you prone to heavy fines and business closure.
Contact the business license bureau of your local municipal government office. Be sure to ask questions about the needed forms and fees to start a courier business in the area. Also, ask if there are other additional requirements and also request the forms be sent to you. Carefully complete the forms and also genuinely answer all questions in the form. Also, go through the form again for completeness before you sign and date it.
Submit The Forms And Pay The Fees
After carefully completing the forms, visit the licensing bureau and submit them. Hand the form to the clerk with a check for the fee. Collect your receipt, and expect your business license to be mailed within 10 business days. After you are finished with the local licensing requirements, ensure to visit your state’s website. Have it in mind that most states will have a licensing portal similar to that of your local area to guide you through the process.
Most times, you can easily apply for the licenses you require directly online or download them to print and mail in. However, always remember that licensing applications require information such as your business name and address, business type, ownership, and tax identification numbers. Also, note that you will be expected to submit a fee along with your applications.
Complete Tax Registrations
If you registered your courier business as a sole proprietor, then you may find the only registrations needed for your courier business are tax registrations. This you can comfortably do online for your tax accounts or download the application to print and mail to the tax authority.
Coupled with state and local income tax registrations, you may have to apply for a federal Employer Identification Number (EIN) specifically for tax purposes. Have it in mind that it is free and doesn’t take time to complete, and you obtain your number immediately. However, ensure to visit the genuine IRS portal to get an EIN.
In the United States, businesses are expected to obtain an EIN to administer payroll taxes, but even if you are a sole proprietor with no employees, it is recommended that you apply for one so you don’t have to use your Social Security number for business identification purposes. Tax software can help you manage all of your small business taxes more easily and accurately.
If you are looking to start and run a successful courier business, then ensure you are focusing on the right location and target market. Note that you don’t have to start up full-time immediately. The courier business industry allows you to test the waters on a part-time basis while still staying employed somewhere else. As you get started, continue to envision the future possibilities for your company and ways you can grow.
Frequently Asked Questions
What Is The Benefit Of Having A Commercial License Plate?
There are some benefits associated with having a commercial license plate, and they include;
- Cheaper insurance quotes
- You can leverage designated parking spots
- You can also deduct the registration fee on your tax return
What Are The Ongoing Expenses For A Delivery Service?
The primary ongoing expenses of a delivery service business include; maintenance cost for vehicles, depreciation, and cost of fuel and insurance premiums. Note that it is always advisable to put all these into consideration before establishing the price you charge.
What Kind Of License Do You Need To Work In A Delivery Job?
If you work as a food delivery driver or small parcel delivery driver with a car or a truck, then you will be expected to get a standard driver’s license and a clean driving record. For couriers who use motorcycles for deliveries, an endorsement on your driver’s license is requisite. But if you use a tractor-trailer, flatbed truck, box truck, tanker, or livestock carrier, then you are expected to get a commercial driver’s license (CDL).
Should I Use An LLC Formation Service Or Do It Myself?
Forming an LLC just requires certain simple procedures many people can do without much difficulty. You only have to visit the Secretary of State’s website, ensure that your business name is available, file out the Articles of Organization (also called a Certificate of Formation or Certificate of Organization depending on the state), and pay all necessary fees.
Although the process can differ in states, and some can be quite easier than others, however it is very common to come across processes and requirements that sound strange. For individuals, this can cause issues and ensure the business is not well structured. Therefore, to avoid mistakes and uncertainties, using a formation service is best.
How Much Do Couriers Make Per Mile?
According to industry reports, a courier company may charge around $1.50 per mile driven when using a car, or $2.00 per mile driven when it is a pickup truck or cargo van.
How Do You Get A Sales Tax Permit?
Here are the general steps to register with a state to collect sales tax:
- Obtain all necessary documents and info like your EIN and other business identifying information
- Visit your State’s Department of Revenue website
- Search or click on the “Sales and Use Tax” section of the website
- Click the link to register your business
How Do You Register Your Business Name?
There are three primary ways of registering a business name in the United States. Determining the best method for registering your business will however depend on numerous factors, such as the business structure, your business location, and the level of protection you want. Nonetheless, these three ways are:
- Form a business entity, such as a corporation or limited liability company (LLC).
- Register the business name as an assumed name or DBA (“doing business as”).
- Register the business name as a federal trademark.
How Do You Get An EIN For Your Business?
An Employer Identification Number (EIN) is more or less like the Social Security number (SSN) meant for businesses. Note that this unique nine-digit EIN number lets the Internal Revenue Service (IRS) to identify businesses for tax reporting. Applying for an EIN is free, and there are four ways to apply:
- Online: Note that the IRS prefers online applications through their EIN Assistant website.
- Phone: If you intend to apply by phone, then contact the IRS Business and Specialty Tax Line at 800-829-4933.
- Fax: To apply by fax, download a copy of Form SS-4, fill in the questions and fax a signed copy to the IRS at 855-641-6935. Ensure to include your fax number for a reply.
- Mail: Download Form SS-4 and mail the completed application to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999.
Do You Need A Texas Dot Number On Your Truck?
Yes, you will need a Texas Dot Number If your trucking company is operating commercial motor vehicles that pick up and haul loads in Texas. Note that you don’t even have to be hauling passengers or hazardous goods to need a number, as long as you operate commercial motor vehicles that pickup loads in Texas and then drop off those same loads in Texas, and then you are expected to have a TX DOT Number.
Is Courier A Good Career?
Yes, if you enjoy meeting new people and always being on the move, then courier is a befitting and good career. Note that jobs and opportunities are plentiful with courier companies, even in remote parts of the country. In addition, there is plenty of career progression and you could move towards a management or some kind of senior role.