Like any other business, beauty salons and spas also have a host of permits and licensing requirements which can vary from State to State. However, certain regulatory legal aspects are standardised, regardless of the location of the business.
What then are the licensing stipulations for beauty salons?
Beautician’s Licence – The laws governing this are quite strict. A licensed beautician must be present in the premises and the licence issued must be displayed on the premises in full view of those who come in for treatment. Further, other workers who have not completed a programme leading to a licence but are enrolled in the same must also display the current “enrolled in an accredited programme” certificate for the benefit of clients. Operating a salon without following these guidelines or having unlicensed workers attend to customers can lead to cancellation of salon owner’s licence or fines or both.
Business License – Your salon will need a business licence issued by the State Licensing Authorities where your business is located. This is the very basis of your operations and is mandatory. In almost all cases, the licence has to be renewed annually after depositing a fee. Application for this licence and the fact of business creation should be advertised in a local newspaper for at least two weeks.
However, any changes within the year in the premises, expansion and major renovations leading to say, installation of laser IPL machines have to be informed to the licensing authorities and appropriate modifications made in the original licence. This business license too has to be displayed at a prominent place in the premises at all times.
Tax Identification – It is required by and issued through the local, county or State Governments in most cases. Tax ID is a number that governs the tax jurisdiction where your business is located. It is basically permissions accorded to you to collect sales tax on every transaction at your beauty clinic and submit the same to Government coffers. Typically, sales tax is submitted every quarter but varies between States. You will therefore do well to know the laws in the State where you are located. No retail store or business or service that deals with the public and sells services or products can operate without a Tax ID.
Business Insurance – This again is a mandatory requirement even though it does not strictly fall under the purview of licences and permits. Business Insurance protects salon owners of liabilities from being sued by clients in case of injuries that may occur in the premises or if there is IPL machines or other equipment. In case where there is a worker client contract and relationship as a result of delivery of services like beauty salons, business insurance is compulsory. Non compliance with this stipulation can mean cancellation of salon owner’s licence or fines or both.
Limited Liability Corporation Licence (LLC) – This is primarily focussed on ensuring that your salon business finances are kept segregated from your personal finances. The process involves applying to the statutory authorities for registering the name of the salon. They have to confirm that there is no other business by that name. Once this name search step is over, the LLC has to be filed. An outline of your business profile has to be submitted which will have the status of your business structure (proprietorship, partnership, etc) along with the names of other designated officers who have the power of attorney to transact business on your behalf.
These are some of the licensing requirements to be kept in mind when you are starting a beauty salon business.