This guide walks you through the process of getting a business licensed and bonded.
A business license is a permit that is issued by the state government which allows a business to operate in a particular geographical jurisdiction.
One of the most common types of surety bonds is a license surety bond. These bonds are referred to as commercial surety bonds. These bonds protect the public, not the business. There are certain regulations for businesses that must be followed depending on the state in which the business is located. Regulations may include getting a business licensed and bonded before working with clients. Before a business starts accepting payment for goods and services, it needs to be licensed. Most of the requirements for starting up a business come from state level, not federal.
There are different licensing and bonding requirements for each state. Since a bond legally protects clients of a business, a bonded business tells prospective and current clients they will receive promised and legitimate service. Businesses that are not bonded or licensed are often cheaper, although that also means the client would take financial and legal responsibility if the business commits misconduct or fraud. A license and bond legally and financially protects the client from malpractice and scams. The penalty for a business that is not licensed grows larger as time goes on.
These are some examples of the types of businesses that are commonly licensed and bonded:
This type of business must be licensed in order to work on homes. The license number needs to be provided on any type of business advertisement so the public has access to the company’s performance history.
If the cleaning company that works in homes steals a client’s television, the client would first file a claim against the cleaning company and then be paid out by the bond. A bond ensures the company is honorable and legal.
The state New York requires a motor vehicle dealer business to have a New York Motor Vehicle Dealer License. In this case, the obligee is the New York Department of Motor Vehicles requires used car dealers have this type of surety bond.
There is only one cost for a bond with Surety1. Surety1 agents strive to achieve the best possible rate for their clients. The factors that play into cost for a bond are the credit score of the applicant, bond type and amount, and the underwriter that is chosen.
If a business is bonded, that means a bonding company has investigated the business’ background and guarantees they are trustworthy and financially stable to be insured and to conduct business. A bonded business has secured money which the surety company and state controls to pay out if something unfavorable happens at fault of the business. In order for businesses to illustrate they are permitted and qualified to conduct work in the state, city, or municipally where they work with clients, a license is necessary.
Follow these steps to discover which type of business license is required for your business.
1. Go to the Business.gov website at http://www.business.gov/register/licenses-and-permits/
2. Under the “Find Licenses and Permits” section, enter the state and zip code of the business or select “General Licensing.”
3. Search the page of required local, state, and federal permits and licenses specific to the business.
4. Fill out the online license application on that website.
5. More information can be found by the “Federal Licenses and Permits, State Licenses and Permits” located on the “Business Licenses and Permits” page.
These are the general steps to follow to get your business licensed and bonded. The particulars may vary for your specific business, but this should serve as a general guide.
1. A business should be required by an obligee to be bonded, licensed or insured. The obligee is the person or entity that is requiring you to get your business bonded, such as the State or the Department of Motor Vehicles.
2. Check with the state government to find out if a license is required for your business type.
3. Find a qualified bond agency such as Surety1. Local insurance agents may be able to help with surety bonds, but they are not as experienced and do not have access to the best available bonding programs.
4. After the steps above are completed, visit Surety1.com to apply for the bond. It is free to apply, so there is no obligation until you’ve decided to proceed with obtaining the bond. A Surety1 agent will be in contact with you shortly after application. The agent will discuss cost and answer any extra questions you may have.
5. If the agent requests them, provide any extra supporting documents. An experienced agent will have the bond ready for shipment either the same business day of application or the following business day.
6. Once you pay for your bond, it will be shipped directly to you. Payment for the bond is paid in full and can be made on the Surety1 website or over the phone. Surety1 agents work to find clients the best possible rate for the bond in a timely manner. Surety1 provides multiple shipping options to get your bond to you as quickly as possible.
7. After you receive your bond in the mail, you can turn it in to the governing body that requires the bond (the obligee).
Surety1 provides all bonds for business, licensing, construction, permit, and court purposes. To get started, apply online for the bond that you need.
1. Complete an online application.
2. One of our surety experts will call and email you with the firm quote and an agreement to sign.
3. Provide payment and your signed agreement, then you will receive your bond!
Call us toll free at 877-654-2327. We have live surety bond agents available Monday – Friday, 8:00 – 4:30 PST. We’re glad to help!