Are you about starting a strip club? If YES, here is a complete guide to getting a strip club business license, how much it cost and important laws to note. The strip club industry has seen a lot of growth in recent times and it exists in almost all counties of the world.
According to statistics, in just the United States alone, there are about 3,979 registered and licensed strip clubs that have more than 58,680 people in their employ. This industry also generates revenue in the excess of six million dollars every year. The industry was projected to grow at 1.8 percent annual growth within 2011 and 2016.
7 Steps to Getting your Strip Club License
1. Select Structure
Choosing your entity type such as LLC, or sole proprietor et al. is choosing how the government will tax you. Specifically, filing a DBA ( i,e., just registering the business name) illustrates the point because doing so subjects you to self-employment taxation. Whichever tax legal formation you choose, all businesses need a Business License and an EIN but also need to select a legal structure.
It is advisable to go for a LLC (Limited Liability Company) and S Corporation structure because they will help you to avoid double taxation. A corporation or LLC protects your personal and business assets in the sense that they are a separate and distinct business entity – separate from its shareholders/owners.
In order words, a shareholder’s / owner’s assets, such as a home, personal bank account, or automobile, are not at stake if the corporation is sued and a court judgment is entered against it for civil or financial liability. Only the corporation’s assets will be at stake.
If you file a DBA as a sole proprietor or partnership and you are sued, you are liable for all business liability. Note that an LLC protects you from both business and personal liability. In addition, a corporation and LLC is also the best way to reduce your tax liability.
2. File Structure Certificate
You should note that you will only need one Certificate for your entity. To illustrate, file a DBA if you want to be a sole proprietorship or set up an LLC if you prefer the LLC formation. You cannot file for both LLC and a DBA. Note, you can be a one member/shareholder LLC or Corp., so, if you set up an LLC or Corp., you don’t need to file a DBA.
3. Get Licensing
After you have selected a legal structure, you will need to get a business license and a Federal Tax ID (EIN) . Business licenses are permits issued by government agencies (at different levels) that allow individuals or companies to conduct business within the government’s jurisdiction. You will need to get a business license because a strip club is also a business.
In order to get a business license, you will have to go through your city and state government. The easiest way to start would be to search your state’s name plus the term “business license” in an online search engine. This will lead you to your state government’s website where the application and its procedures can be found.
You can also check out the US Small Business Administration’s website to see the rules for receiving a business license that are specific to your city. A business license will cost you about $50 to get it registered. However, the cost of the license will vary due to the business type, location, and expected profit. This license does need to be renewed periodically.
4. Employer Identification Number
An employer identification number (EIN) basically tells the federal government that you are an employer of labor and it provides you with a tax ID. An EIN allows you to hire employees and to legally have them on your payroll. Your state will give you an employer identification number that is separate from your federal number which helps legitimize your business’s standing.
In order to get an EIN, you will need to visit the IRS website and follow the application procedures that are listed there. This can take quite some time because the IRS only issues one employer identification number per responsible party per day. Be sure to apply as early as possible. You can also fax, mail, or call the IRS to submit your application.
5. Register Seller’s Permit
Finally, you may need a strip club Seller’s Permit. If you resell anything to the public, then you need to have this license. In addition to licensing your business, everyone who is working inside the strip club must also be licensed, including the owner. This is including but not limited to: bartenders, DJs, owners, security, dishwashers, “house mothers”, kitchen staff and any other employees who work for the adult entertainment establishment.
Applicants for a Dancer or Manager License must appear in person with two pieces of ID, which can be Driver’s License, Birth Certificate, Naturalization, Passport, Military ID, or State ID Card. Applicants will also need four (4) face forward photos. Applicants must pass a background check.
The permit allows an individual to work in a strip club and it is issued per employee and per establishment. You must obtain a separate permit to work at an additional adult entertainment establishment. Here are the steps involved in getting a license.
- Get hired: if you have not already been hired by the strip club, make sure that they hire you before you apply. The permit is not refundable and cannot be transferred.
- Notarize your SAVE affidavit: Obtain a copy of the SAVE affidavit and have it notarized.
- Obtain three separate money orders: Your visit to the License and Permit Unit would be expedited if you came prepared to pay the three fees via money order. The License and Permit Unit does not accept any other forms of payment.
The following fees are involved:
- Fingerprint – $20
- Processing fee – $50
- Adult entertainment permit – $200
You should note that all fees involved are non- refundable.
6. Visit the License and Permit Unit to complete the application
Prepare your secure and verifiable form of identification and go to the License and Permit Unit to fill out the application card and the consent form. A Background check will be carried out on you with the details you provided in your application form alongside your fingerprint. This background check verifies that there are no outstanding charges against the individual.
In most states, you will not be issued a permit if you have had any prior convictions within the past three years in the united states of America for crimes related to the unlawful dealing of narcotics, sexual-related offenses and crimes of moral turpitude. In addition, if being employed in a strip club will violate the terms of your probation, then you will not be issued a license.
7. Obtain your Adult Entertainment Permit
Once you complete the fingerprinting, the License and Permit Unit will take your photo. After successfully completing your background check and processing all of the required documents, the License and Permit Unit will issue you your Adult Entertainment permit. Your permit is good for one year starting the date that the permit fee was accepted.
You should note that one adult entertainment permit allows you to work in only one strip club because the permit is non-transferable. If you would like to work in another strip club, you must return to the License Permit Unit to complete the process again. You will need another notarized SAVE affidavit, two money orders, and a completed consent form.
Strip Clubs Laws and the Regulation You Should Know
If you want to open a sexually oriented business such as a strip club, there are some laws and regulations that you ought to have in mind. You should be aware of zoning laws, alcohol restrictions, and other regulations that a business which is not sexually oriented in nature will not have to worry about. For example, strip clubs may be prevented from being located near a school or a place of religious worship.
In some places, the strippers are not allowed to go completely nude and in other places, strip clubs are not allowed to sell alcohol. It is good to note that the laws and regulations guiding the establishing and running of strip clubs vary from place to place.
What is acceptable in one county or city can land you in trouble in another city so the best practice will be for you to make a research on your localities’ adult entertainment business laws before you set up your business. Here is a summary of the different laws, and regulations affecting strip clubs.
a. Zoning Laws
Zoning laws are in place to dictate where certain types of businesses can and cannot be located. This law does not just affect strip clubs alone, it also affects residential buildings, industries and other interests. The U.S. Supreme Court has ruled that local ordinances may regulate the time, place and manner in which such businesses are operated without violating the First Amendment.
Any zoning law that was put in place by local ordinances is quite valid as long as they were put in place with the intent of reduce the negative effect of such business (such as lowered property values or drug use) and are not motivated by the strip club itself, which would be a violation of the First Amendment.
Due to this, zoning laws vary greatly from place to place and can reflect the dominant cultural sentiment of a community. Zoning laws can also affect the way you can advertise your strip club. For instance in Missouri, there is a law that bans sexually oriented billboards on state highways.
The laws in a locality regulate whether alcohol can be served at a strip club in accordance to how much nudity is allowed. For instance, in strip clubs where the strippers go completely naked, the club may be prevented from selling alcohol, whereas clubs that require the stripper to cover their genital at all times may be allowed to serve alcohol (however, they can only serve customers that are 21 years of age or older).
Topless clubs in Las Vegas may serve alcohol, for example, but fully nude clubs may not. A 2007 Shelby County, Tennessee ordinance that was challenged in court but upheld in 2011 bans the sale of alcohol at all strip clubs, which also are barred from displaying full nudity.
c. Age Requirements
In almost all places, the law requires that all customers and staff of a strip club must be or above the age of 18 or 21 if the establishment sells alcohol.
d. Nudity Rules
In some localities, the stripper are allowed to be completely naked when performing, in other places, they may be required to cover at least their nipples and genitals, and in some other places, they may be only allowed to be completely naked if alcohol is not being sold in the establishment.
e. Contact with Patrons
In some places, strippers are allowed to give “lap dances,” or some form of limited contact, while in other places, they must maintain a specified distance from customers and other dancers when they are performing.
Texas, for example, requires the collection of a $5 entrance fee, which is paid to a foundation for victims of rape.
g. Type of employees
In some states, you cannot employ a person to perform the duty of a stripper, entertainer, waiter, bouncer, bartender, disc jockey, and musician, who has been convicted in that state or in any other state or in any federal court within five (5) years immediately prior to the application for employment for a sex-related crime, dealing in narcotics, or any charge relating to the manufacture or sale of intoxicating liquors, any other felony or misdemeanor involving moral turpitude or for whom any outstanding warrant exists on which service has not been perfected.
In order to work in a strip club, you will need to have a permit. Independent contractors, such as entertainers, employed or hired by the strip clubs, will have to be licensed as employees, regardless of the business relationship with the owner or licensee of the strip club. Each independent contractor is required to have and maintain his or her separate business license.
However, it should be noted that this license does not apply to employees of the strip club that perform accounting, legal, administrative, repair or maintenance services for the strip club. Any other form of employee that requires a permit may not be employed by or allowed to work in the strip club until the person has filed an application, paid the fee for and obtained a work permit from the Police Department.
An application for a permit must include the applicant’s legal name, all of the applicant’s aliases and/or any other name by which the applicant has ever been known, address, business name and address, date of birth with the written proof thereof, and prior arrest record of the applicant.
It will then be up the Police Department to make a complete background search on the applicant. The applicant will need to submit all his or her finger prints during the application process. In rendering a fitness determination, the Police Department will decide whether the record applicant has been convicted of, or is under pending indictment for enumerated disqualifiers.
Before you start a strip club, you have to make sure that your business does not contravene any existing laws and regulations. An issue that you may consider to be minor such as purchasing or leasing property that’s not properly zoned can end your business even before it has a chance to take off.
In addition, the regulation surrounding how strip clubs are established and run can vary from place to place and as such, it is best to seek out the services of a qualified business attorney near you before starting your business.
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