Hawaii Business License

Becoming your own boss is something most people only dream about. But for those who take the leap of faith and decide to open a business in Hawaii, there are things you need to know.

From licenses and permits to hiring employees once your business starts to take off, it's a good idea to know what's legal, and what you need to do prior to opening shop.

Continue reading to learn more about owning a business in Hawaii.

All businesses in Hawaii are obligated to follow state tax registration laws. For instance, any business that has at least one employee must register for withholding income tax, sales and use tax and unemployment insurance tax.

If you're a business owner, make sure to contact the Hawaii Business Express so you can get licenses, permits, tax-specific identification numbers or to simply ask for information about business registration.

The State of Hawaii Department of Commerce and Consumer Affairs (DCCA) controls all business registrations in the state of Hawaii. All entities, including corporations, limited liability companies (LLC), and partnerships will need to register with the Business Registration Division within the DCCA. This agency uses forms that are streamlined and gives free online resources. What your business is and the services you provide dictates the type of business permit you'll need to be considered a legal business in Hawaii.

Furthermore, you might need to have more than one license or permit. Again, it all depends on the type of business you are opening. Although you're required to get licenses and permits in Hawaii, the requirements depend on the jurisdiction.

Some of the more common types of permits and licenses include tax permits and business licenses. These are available through the county clerk. Building permits can be obtained through Hawaii's Building and Planning Department. Health permits have to be obtained from Hawaii's Department of Health. You can get an occupational permit from the same department as building permits.

Regardless of the business you run, you are required by law to acquire a business license before you can legally operate in Hawaii. If you have a registered business in Hawaii, you'll be able to file for Registration of Trade Name just as long as the name is different from the original.

Hawaii allows people to operate a business using a fake name. This is called Doing Business As or DBA for short. Filing for DBA will allow business owners to create a new name for their business that is different, but unique to the original. With a DBA, you won't have to include the name of any of your partners or registered name of your corporation.

The requirements for registering your business that will have employees is as follows:

An employer identification number (EIN) is a special nine-digit number that the Internal Revenue Service (IRS) uses to differentiate tax returns from businesses. Employers, corporations and business partnerships can apply for an EIN by calling this number; 800-829-4933. Online applications are also able to be submitted, but only during the hours of operation.

Businesses will usually need a new EIN whenever there is a change in ownership. Using your EIN to file your taxes is helpful so you don't have to use your social security number as you would with a sole proprietorship. It is important to know which type of business entity you want to start so that you can correctly file your business taxes each year.

You'll need to set up records in regard to withholding taxes. Besides, you'll need these records to maintain a permanent filing system up to four years in the likely event of an audit.

Have Your Employees Fill Out a Form

Make sure that all newly hired employees fill out an Employment Eligibility Verification Form, which is also known as an I-9 form. The point of this form is to verify an employee's eligibility to work in the United States.

All businesses in Hawaii should have the following insurance policies; business insurance, worker's compensation, disability, and unemployment insurance. Only get disability insurance if it's required.

There are other requirements, however, it all depends on the jurisdiction.

Here is a list of the other requirements:

Withhold income taxes - To promote good record-keeping, you can make financial statements and keep an eye on any deductible expenses and receipts.

Give W-4 forms - All employers must give their new employees with a W-4 form and then issue it to the IRS.

Report to the government - You must report to the federal government about the annual wages and taxes that were withheld. All employers have until the last day of January to submit W-2 forms. If you have more than 250 employees then you are required to file electronically. However, regardless of your size, all businesses are encouraged to file electronically.

Within three days of hiring an employee, you must determine their eligibility to work. Once verified, download an I-9 form along with instructions on how to fill it out. You'll also be able to find a rundown of the immigration laws on the IRS - website. These laws are crucial to know, especially for small businesses.

If it's required, temporary disability insurance must be paid to workers who are mandated to take off their job due to a non-work related illness or injury. The business owner has to deduct the tax for disability insurance from every employee and report it to the state of Hawaii.

If you're required to pay unemployment tax, you are obligated to register your business with a Hawaii workforce agency. However, not all businesses are required to pay this tax as it depends on the type of business. If you're looking to buy worker's compensation, you'll have to purchase it through a commercial carrier or Hawaii's worker's compensation insurance program.

As you can see, there is a lot to go through when opening a business in Hawaii. It's a big responsibility and as the owner, it's up to you to keep things regulated and up-to-date. Getting your Hawaii business license is just the first step to opening your new business. From there choosing your business entity and trade name also further cement your start-up.

Don't let the license application process trip you up or stop you from starting your new dream venture. Doing business in the beautiful Hawaii state can be very rewarding. Unfortunately, if you don't follow the correct license application process or pay the proper filing fees, your dream business could turn into a nightmare.

Use the steps above to ensure you follow all the necessary steps when starting your new small business. The chamber of commerce is here to help you along the way. Be sure to use your resources available and check back often for more articles on how we can help you be successful in your business.