The Ultimate Guide to Becoming a Government-Approved Phone Distributor

Contacting Manufacturers and Suppliers

Once you’ve narrowed your selection of potential manufacturers and suppliers, check references and ensure they can provide you with relevant information about their business. They should be able to provide details on their product lines, sales numbers, and clientele; they also need proof of certification to meet industry, environmental, and labor standards. If they can’t, consider them a red flag and proceed with contacting other candidates on your list. Almost all manufacturers and buyers will require you to go through some application process before working with you as their distributor. It could involve in-person meetings, tours of their facilities, analysis of financial statements, and providing proof of a letter of credit from your bank. Some may even require a business license and resale tax certificate.

Obtaining a Resale Tax Certificate

A resale tax certificate is one of the most essential pieces of documentation to begin selling wholesale or become a government phone distributor. It demonstrates that you are buying products to resell or mix and match with other products you intend to sell. Additionally, the document certifies that you are registered in at least one US state to collect sales tax.

You may also hear the term resale or sales tax permit used instead of resale certificate. Some states require you to have both resale permits and resale certificates. You should check with your local sales tax authority for more information on obtaining resale certificates in your state.

Generally, you must present a resale certificate when you purchase from any vendors that collect sales tax in the state where you plan to operate. It is common for some suppliers to refuse to honor a resale certificate if it isn’t from a business that is registered to collect sales tax in their state.

Some states have a two-step process to get resale certificates. First, you must apply for a Sales Tax Certificate of Authority. It is not the same as a sales tax license, and it is usually called something different, such as “seller’s permit” or “tax registration number.”

Once you have your seller’s permit, you must complete a separate resale certificate for each vendor from which you purchase taxable goods. This form will ask you for general business details, and it might also request specific ownership data such as a business name, registered agent, or LLC number.

It would help to keep resale certificates on file for several years or until the buyer informs you they no longer need them. If you ever face an audit by your state’s tax authority, these records will be helpful.

Obtaining a Business License

A business license is a type of permit that indicates the government has approved a company to operate in a specific area. Companies without a business license can be fined or even shut down by the local, county, or state authorities. To avoid these consequences, it’s essential to determine whether your company requires a business license as part of the start-up process. The regulations of each city, state, or county will determine which business licenses you need and the process to get them. Forming an LLC first makes sense because many business license applications require your entity’s paperwork.

The time to obtain a business license depends on the jurisdiction, industry, and other factors. Some states can grant licenses within a week or so, while others may take months to approve applications. The Small Business Administration (SBA) recommends that you contact your state’s governing agency to find out the specific requirements for your location and industry.

In addition to obtaining a business license, you’ll likely need to register your business and obtain any required permits. By guiding the laws and ordinances specific to your city, a lawyer with small business experience can assist you in navigating the registration and permit process. They can also represent your interests with city officials and help you keep up to date on any changes to the regulations.

If your business is regulated at the federal level, you must also obtain a national business license. That is often true for the banking, insurance, agriculture, and firearms industries.

Purchasing business insurance to protect your company from any liabilities incurred in the event of accidents or third-party damage is a good idea. A certain amount of insurance might be required for getting specific business licenses.

Although it isn’t required, many businesses choose to have a business attorney assist them with determining their licensing requirements. A knowledgeable lawyer can provide personalized legal advice, handle communications with city officials on your behalf, and ensure that your company complies with all the applicable rules and regulations.