Do I Need a License to Run a Chat Site?

Is a business license required for running an online video chat website even if the website is free to users and profit comes from advertisements?

How you make your profit is not the real issue. In some states, opening an online business is as simple as finding a location (your bedroom counts) and filing a business name (also called a DBA, short for "doing business as," or “fictitious name statement”) with the local county clerk. You may also need a home-occupation permit if you’re running your business from home. In other states, especially if you’ll be at all involved with the sale or exchange of any tangible items -- anything that you can touch or eat-- you need a retail trade or sales tax license.

Because the requirements for licensing (and the names given to the licenses) vary from state to state, you’ll want to check with your local county clerk to determine exactly what’s required.

Note that that’s an issue separate and apart from whether you should incorporate your business or file as an limited liability company (LLC), which you would do through your state’s Secretary of State office.