Starting a clothing brand is exciting, but before you start selling, you need to make sure your business is legally set up. This guide walks you through every license and permit you might need to legally sell clothing in the United States.
In This Guide
Overview: What You Actually Need
Good news: starting a clothing brand doesn't require any special licenses that other businesses don't need. If you're selling online and don't have a physical storefront, you'll need fewer permits than traditional retail.
Here's the typical list for a new clothing brand:
- Business Registration - Register your business structure (sole proprietorship, LLC, etc.)
- EIN (Employer Identification Number) - Your business's "social security number" for taxes
- Seller's Permit - Required to collect sales tax and buy wholesale
- DBA (optional) - If you want to operate under a different name than your legal name
- Local Business License (varies) - Some cities/counties require registration
Start Simple
Many successful brands started as sole proprietorships with just a seller's permit. You can always upgrade to an LLC later as you grow. Don't let paperwork paralysis stop you from starting.
Business Registration
Before anything else, you need to decide on your business structure. For most new clothing brands, the choice comes down to:
Sole Proprietorship
Best for: Testing your concept with minimal cost and paperwork.
If you're just starting out and want to validate your brand idea, you can operate as a sole proprietor. This requires no formal registration in most states - you essentially are your business.
Downside: No legal separation between you and the business. If someone sues your business, your personal assets are at risk.
LLC (Limited Liability Company)
Best for: Protecting personal assets while keeping things relatively simple.
An LLC creates a legal separation between you and your business. This protects your personal assets (house, car, savings) if your business faces legal troubles.
Cost: $50-500 depending on your state, plus annual fees in some states.
How to Register an LLC
Go to your state's Secretary of State website. Search for "LLC formation" or "business entity registration." Fill out the Articles of Organization form, pay the filing fee, and you're done. Most states process same-day or within a week.
Getting an EIN (Employer Identification Number)
An EIN is like a Social Security Number for your business. You'll need it to:
- Open a business bank account
- File business taxes
- Hire employees (eventually)
- Apply for wholesale accounts with some suppliers
How to Get an EIN
Visit the IRS website at irs.gov and search "EIN application." The online application takes about 5 minutes, and you'll receive your EIN immediately. It's completely free.
Avoid Scam Sites
Many websites charge $50-100+ for EIN applications. The official IRS process is 100% free. Make sure you're on irs.gov, not a look-alike site.
Seller's Permit / Resale Certificate
This is the most important permit for clothing brands. A seller's permit (also called a resale license or resale certificate) allows you to:
- Collect sales tax from customers in your state
- Buy wholesale without paying sales tax on inventory (you'll collect it when you sell)
- Open wholesale accounts with blank apparel suppliers like Pro Club and Shaka Wear
How to Get a Seller's Permit
Search "[Your State] seller's permit application" or visit your state's Department of Revenue website. Most states offer free online applications that process instantly or within a few days.
States without sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon don't have state sales tax. You may still need to register for business purposes, but you won't be collecting sales tax from customers in these states.
DBA (Doing Business As)
A DBA lets you operate under a business name that's different from your legal name (sole proprietorship) or your LLC name.
When you need a DBA:
- You're a sole proprietor and want to operate as "Fresh Threads" instead of "John Smith"
- Your LLC is "Smith Ventures LLC" but your brand is "Urban Collective"
How to File a DBA
DBAs are typically filed at the county level. Visit your county clerk's office or website and search for "fictitious business name" or "DBA registration." Cost is usually $10-100.
Local Business Permits
Some cities and counties require a general business license to operate within their jurisdiction, even for online businesses. Check with your city's business licensing department.
Home-based business permits: If you're running your business from home, some areas require a home occupation permit. This is usually a simple form and small fee to confirm you're not disrupting the neighborhood.
Quick Checklist
Use this checklist to track your progress:
- ☐ Decide on business structure (sole proprietorship or LLC)
- ☐ Register LLC if applicable (state Secretary of State)
- ☐ Apply for EIN (free at irs.gov)
- ☐ Apply for seller's permit (state Department of Revenue)
- ☐ File DBA if needed (county clerk)
- ☐ Check local business license requirements
- ☐ Open business bank account
Disclaimer
This guide is for educational purposes only. Requirements vary by state and change over time. Always verify current requirements with your state and local government, and consult with a legal or tax professional for advice specific to your situation.