Do I need a business license before I accept booking deposits?
What may apply
Local rules often cover business registration, taxes and consumer protections for deposits. Rules can differ even between neighboring towns. Some industries also need specific licenses, insurance or permits. The rules may apply to a deposit the same way they apply to the full payment, depending on how it is handled.
Your payment processor may also ask for business details before it allows you to accept payments. Check the requirements of your bank and the booking software you use. Requirements can also change, so check again each year.
- Local business registration rules
- Sales tax setup where it applies
- Industry-specific licenses or permits
- Payment processor identity or business checks
How to check quickly
Contact your city, county or national business office to ask what they require for a small service business. A local small business development center or accountant can also help. Write down the answers and keep them with your business records.
Refund policies for deposits also matter. Describe how and when deposits are refunded so clients know what to expect before they pay.
- Contact your local business office
- Ask a local advisor or accountant
- Write down your deposit refund policy
- Keep the answers with your records
Common mistakes
- Assuming a booking app's setup means your local rules are covered.
- Taking deposits before checking whether your business needs registration.
- Leaving the refund policy unclear for deposits.
Related questions
- How do I accept payments when clients book appointments online?
- Should I take a deposit for appointments, and how much?
- What is the best way to process cancellation fees?
- Can I require prepayment for certain services?
- How do I handle refunds for canceled appointments?
- Are there booking systems that include payment processing?