Starting an event planning business can be a very lucrative endeavor. However, it is important to understand the legal requirements and licensing necessary for running such a business. This article will explore the legal requirements for event planning businesses and the different licenses required for planners. We will also discuss what entrepreneurs should do when starting an event planning business and legal considerations for running such a business.
Legal Requirements for Event Planning Businesses
There are a few legal requirements that event planning businesses must follow. First, the business must be licensed with the city or county where it will operate. The business must also have a federal tax identification number. Additionally, the event planner must obtain a surety bond, which protects the client in case the planner does not follow through on their agreement. The event planner must also have liability insurance, which covers any damages that may occur during the event.
Insurance Cost
Liability insurance for an event planning business costs an average of $500 per year.
Surety Bond Cost
A surety bond for an event planning business costs an average of $250 per year.
Types of Licenses Required for Event Planners
There are a few different types of licenses required for event planners. The first is a business license, which is required in most cities or counties. The event planner must also have a sales tax permit, which allows the company to collect and remit sales tax on behalf of their clients. Additionally, the event planner may need to obtain a special events permit from your local municipality. This permit is typically required for events that will be held in public spaces, such as parks or sidewalks.
Event-Specific Licenses
There are a few event-specific licenses that event planners may need to obtain. For example, if the event will serve alcohol, the planner will need to obtain a liquor license. If the event will be held in a venue that requires a permit, such as a stadium or an arena, the planner will need to obtain that permit. Additionally, if the event will include entertainment, such as live music or a DJ, the planner will need to obtain the appropriate licenses for that entertainment.
Cost of a Business License
The cost of a business license for an event planning business varies by state. However, the average cost is $50 to $100.
Sales Tax Permit Cost
The cost of a sales tax permit for an event planning business varies by state. However, the average cost is $50.
Special Events Permit Cost
The cost of a special events permit varies by municipality. However, the average cost is $100.
Liquor License Cost
The cost of a liquor license for an event planning business varies by state. However, the average cost is $500 to $1,000.
Permit Cost for Venue
The cost of a permit for a venue varies by municipality. However, the average cost is $250.
Entertainment License Cost
The cost of an entertainment license for an event planning business varies by state. However, the average cost is $50.
What to Do When Starting an Event Planning Business
When starting an event planning business, there are a few things that entrepreneurs should do. First, you should determine what legal structure you want your business to have. This will impact the types of licenses and permits that you will need to obtain. Additionally, entrepreneurs should create a business plan and register your business with the state. You should also obtain the necessary licenses and permits.
Legal Considerations for Running an Event Planning Business
There are a few legal considerations that event planners should keep in mind when running your business. First, you should make sure your clients sign contracts that outline the scope of work and responsibilities of both parties. Additionally, event planners should keep detailed records of your expenses and income. This will help you track your finances and ensure you are complying with tax laws. Finally, event planners should be aware of any legal restrictions that may apply to your business, such as noise ordinances or fire codes.
Conclusion
Licensing and legal requirements are important in starting and running an event planning business. Event planners must obtain a business license, surety bond, and liability insurance. You may also need to obtain a special events permit. Entrepreneurs should create a business plan and register your business with the state when starting your business. Additionally, you should keep detailed records of your expenses and income. Event planners should also be aware of any legal restrictions that may apply to your business, such as noise ordinances or fire codes.