What Licenses Does A Canoe and Kayak Rental Business Need?

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Starting a successful canoe and kayak rental business takes more than having watercraft to enjoy a day on the water. Starting a new business requires completing several steps, and obtaining licensing is an important one as it may impact your ability to operate legally.

The question, “what business license do I need to start my canoe and kayak rental business” is a common one, but in reality, your business will likely need multiple licenses, permits, and registrations from federal, state, and local agencies.

Let’s look at which licenses to consider when starting a canoe and kayak rental business.

Related: Guide to starting a canoe and kayak rental business

While we have researched what licenses and permits your business may need, please be aware that there is no way for us to have uncovered every state and local requirement.

To not miss any important licenses and permits, we recommend also checking with your local Chamber of Commerce, economic development agency, or use a business license service like Incfile or Corpnet.

What Licenses Do You Need to Start a Canoe and Kayak Rental Business?

Watercraft Licenses

Depending on the body of water the kayaks and canoes will be used, federal, state, or local watercraft licenses may be needed to be on the water legally.

Certifications

CPR certification, First Aid training, and water safety courses should be strongly considered for all staff if a customer is injured while on your craft. Given most water activities take place several miles from the nearest hospital, having trained staff can help injured renters.

In addition to the watercraft license, there are several general licensing requirements for starting a canoe and kayak rental business.  While licensing requirements vary by location, here are a few of the common licenses and permits that a canoe and kayak rental business may need:

Entity Formation

When starting a business, the legal entity needs to be selected. A legal entity refers to how a business is organized to operate. There are four main types of entities; sole proprietorship, partnership, corporation, and Limited Liability Company (LLC).

Each type of entity has its own pros and cons, such as liability protection, costs, and administrative requirements.

Related: What is the difference between a sole proprietorship, partnership, Corporation, or LLC?

Business Name Registration

While not necessarily a business license, it’s worth noting that to use a name for a business, many states require the registration of that name. Making matters more complicated, the process of name registration is different by state and the type of business entity.

For instance, sole proprietorships and partnerships generally need to register a business name (also referred to as a Doing Business As, DBA, fictitious name, or assumed name).

Learn: How to register a DBA

Corporations and LLCs register are a little easier because the name is registered when the entity is formed with the state.

General Business License or Permit

Depending on where the business is located, a general business license or permit may be required. A few states require a business license; however, they are more commonly found at the city level.

Learn more: Business license requirements by state

Federal Employer Identification Number

The Federal Employer Identification Number (also referred to as a FEIN, Employer Identification Number, EIN, or Federal Tax ID Number) is a unique nine-digit number that identifies a business with the Internal Revenue Service (IRS).

Any business with employees or one that forms as a partnership, Corporation, and in many cases an LLC will need to get an EIN.

Sole proprietors and single-owner LLCs without employees can instead use the owner’s social security number.

Learn: How to get an EIN 

Sales Tax Permit or Business Number

In order to sell products and/or offer certain services, a state sales tax permit (also referred to as a business tax number or tax ID number) may be needed.  Many states don’t tax services, such as watercraft rentals, though if selling water or snacks, these sales will be taxable.

This permit creates an account number with the state’s Department of Revenue (or similarly named state taxing agency) to collect and remit sales tax.

Learn: How to get a sales tax permit in each state

Resale Certificate

When buying inventory that is being resold to customers, such as snacks or other items, the business can purchase these items tax-free. A resale certificate (sometimes referred to as a seller’s permit) allows a business to purchase inventory, and instead of paying the sales tax to their vendor, they charge the sales tax to the end-user of the product.

A resale certificate only allows a business to not pay sales tax for items being resold, and sales tax will still need to be paid for supplies or equipment such as the kayaks.

Learn: How to get a resale certificate

Certificate of Occupancy

In most communities, a canoe and kayak rental business will likely need to secure a Certificate of Occupancy (CO) before operating in a commercial building.  Additionally, if operating on federal lands, there may be a permit and concession fee.

Before purchasing or leasing a location for your canoe and kayak rental business, be sure to check with the local zoning department first to ensure the business can legally operate out of the chosen location.

Food Service License

In order to sell any type of prepared food, a food service license will be needed. This licensing helps ensure food-service establishments are following health and safety requirements and keeping the public safe. Registration is different by location and is typically through the local health department, though a state license may also be needed.

Licensing typically requires employees have a food handler certificate or food sanitation certification, in addition to the facility being randomly inspected.

 

The process of identifying all of the licenses and permits necessary to start a canoe and kayak rental business may feel confusing and overwhelming. It is critical to do this right the first time, otherwise, your business may be temporarily shut down until all licenses are obtained.

To make sure your bases are covered, you can do it yourself and contact the city or local economic development office and request assistance. Additionally, there are companies that specialize in business license research, such as Incfile or Corpnet.

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