Module 5
Legal Basics: Registration, Licenses, and Insurance
“Render therefore to all their dues: tribute to whom tribute is due; custom to whom custom; fear to whom fear; honour to whom honour.” — Romans 13:7
Lesson
What You Will Learn
- Explain what an EIN is and when a business may need one
- Distinguish business licenses, occupational licenses, and permits
- Find out how a criminal record may affect licensing and where to ask
- Describe basic types of business insurance and tax responsibilities
Lesson Notes
Getting Legitimate
Operating legally protects you and your customers and opens doors to business banking and funding. Usual steps: choose a structure and name, register if required, get any needed tax ID, licenses, and permits, open a separate business bank account, and get insurance.
An EIN (Employer Identification Number) is a federal tax ID for a business, issued free by the IRS. Many sole proprietors without employees can use their Social Security number, but partnerships, corporations, and businesses with employees generally need an EIN, and some banks ask for one. Apply directly with the IRS; never pay a website to get one.
Licenses and Permits
- General business license: many cities or counties require one.
- Occupational license: required for certain trades (such as cosmetology, childcare, contracting), usually from a state board.
- Permits: permission for specific activities, such as selling food or operating from home.
Requirements vary by state, county, and city. Ask before spending money on training or equipment.
Local rules: Business license office: ________________. Board for my field: ________________. Home business permit needed? ______. (Instructor will help fill in.)
When You Have a Record
Some occupational licenses ask about criminal history. Rules differ by state and license, and some states have changed their laws to give applicants with records a fairer review. Do not assume you are barred, and do not assume you are not.
Before investing in training, ask the licensing board, a legal aid or re-entry legal clinic, your case manager, or a free business mentor. Answer every question honestly. Many service businesses need no occupational license.
Insurance and Taxes
General liability insurance covers some injuries or damage you cause while working; some service fields use a bond. Ask a licensed agent and compare quotes.
Business owners report their own income and may owe self-employment and estimated taxes; some places require sales tax on certain sales. Keep receipts and set aside part of every payment for taxes. CBE 213 covers records in detail.
Key Terms
| Item | Details |
|---|---|
| EIN | Employer Identification Number; a free federal tax ID for a business, issued by the IRS |
| Occupational license | State permission to work in a regulated trade or profession |
| Permit | Permission for a specific activity, such as selling food or operating from home |
| General liability insurance | Insurance that covers some injuries or damage caused by the business |
In-Class Activities
Legal Checklist for My Idea
Using the printed checklist, mark which items may apply to your business idea: registration, DBA, EIN, general business license, occupational license, permits, sales tax, insurance, separate bank account. Next to each, write where you would ask (use the instructor's local resource sheet).
Licensing Research Practice
Your instructor will give you a printed licensing board page for one occupation (or you may view it on an approved device). Find: what training is required, the fee, and what the application says about criminal history. Write one question you would ask the board.
Assignment: My Legal Steps Plan
Write a numbered list of the legal steps your business will need, in order.
- Include where you will go or who you will contact for each step (office names, not personal contacts).
- Note any step that may be affected by a record and who you will ask.
- List the type of insurance you will ask about.
- Write one sentence on how you will set aside money for taxes.
Graded with the Module Assignment Rubric.
Reflection Journal
Romans 13:7 calls us to render to all their dues. Operating legally and paying taxes honestly are part of a Christian witness. How does doing things the right way, even when it is slower, bring peace? Where is God asking you to walk in integrity?
Prayer focus: Ask God for integrity in every step and for favor as you seek doors that may seem closed.
Weekly Reading & Devotions
Walking in the Light
Doing business the right way can feel slow: forms, offices, fees, waiting. It can be tempting to skip steps and work "under the table." But operating legally brings protection, trust, access to banking and funding, and something even more valuable: peace.
Paul wrote that we should provide things honest not only in the sight of the Lord, but also in the sight of men (2 Corinthians 8:21). Registering your business, getting the licenses you need, and paying taxes honestly are part of your witness.
For women with records, licensing questions can stir fear and shame. Some licenses ask about criminal history; many do not. Rules vary by state and have changed in some places. Do not assume a door is closed, and do not assume it is open. Ask the licensing board, legal aid, or a re-entry advisor before you invest, and answer every question honestly.
Tasha wanted to work in a licensed field but feared her record would keep her out. Instead of guessing, she asked the licensing board and a legal aid clinic what applied to her. She learned what steps she would need and made a plan. (Tasha is a composite example.)
Think About It
- Which legal step feels most confusing or intimidating to you? ______________________
- Who could you ask about licensing in your field? ______________________
- How does honesty with authorities bring peace? ______________________
Daily Devotions for Week 5
Render to All Their Dues
Render therefore to all their dues: tribute to whom tribute is due; custom to whom custom; fear to whom fear; honour to whom honour.— Romans 13:7 (KJV)
Paying what we owe and following just rules honors God.
Reflect: Where do you need to render what is due?
Pray: Lord, make me faithful in what I owe.
Do: Write one way you will set aside money for taxes.
Unto Caesar, Unto God
Render therefore unto Caesar the things which are Caesar's; and unto God the things that are God's.— Matthew 22:21 (KJV)
We honor earthly responsibilities and give our whole hearts to God.
Reflect: What belongs to God in your business?
Pray: Lord, all I have belongs to You.
Do: Dedicate your business idea to God in prayer.
Honest in Every Sight
Providing for honest things, not only in the sight of the Lord, but also in the sight of men.— 2 Corinthians 8:21 (KJV)
Integrity is visible. Others see how we do business.
Reflect: Where could others see your integrity?
Pray: Lord, make my dealings honest before all.
Do: Choose one rule you will never bend in business.
Trust, Not Fear
Trust in the LORD with all thine heart; and lean not unto thine own understanding.— Proverbs 3:5 (KJV)
When paperwork and rules feel overwhelming, trust God and take the next step.
Reflect: What are you trying to figure out on your own?
Pray: Lord, I trust You more than my understanding.
Do: Take one small step toward a legal question you have.
A New Creature
Therefore if any man be in Christ, he is a new creature: old things are passed away; behold, all things are become new.— 2 Corinthians 5:17 (KJV)
Your past does not define you in Christ. Walk forward honestly and with hope.
Reflect: What new thing is God doing in you?
Pray: Lord, thank You for making me new.
Do: Write a sentence describing who you are in Christ.
Module Quiz
- 1.
An EIN is:
- 2.
If your planned occupation requires a state license and you have a record, you should:
- 3.
Which insurance covers some injuries or damage your business causes?
- 4.
You should pay a private website a fee to obtain an EIN.
- 5.
What is the difference between an occupational license and a permit?