The idea of starting a dance studio is super exciting, right? All those dreams of creativity, rhythm, and building a community and creating viral reels on Instagram..

But before you lace up those dance shoes, there’s some important paperwork to handle.

So, you’re wondering, “What licenses and documents do I need to start a dance studio?” Well, you’ve come to the right place!

And if the thought of managing all this on your own is stressing you out, don’t worry. doola’s got your back. 

We’ll take care of everything — from setting up your studio to handling taxes and bookkeeping. 

We’ll get into that a bit later.

But first, let’s cha-cha into this step-by-step guide to get your dance studio legally up and running without missing any crucial details and documents.

Why Do You Need Licenses for a Dance Studio?

Before we jump into the nitty-gritty, let’s address the big question: why do you need these licenses? 

Well, a dance studio is a business like any other. 

You’ll be dealing with legal entities, tax regulations, and music rights – all of which require proper licensing to ensure you’re operating within the law. 

Plus, being fully licensed protects you from potential lawsuits and fines.

Essential Licenses and Legal Documents for Your Dance Studio

Now, let’s get into the specifics. Here are a few licenses and legal documents you must have before you officially start your dance studio.

#1 Certificate of Incorporation

This license officially recognizes your dance studio as a legitimate business entity. Depending on whether you choose an LLC, Corporation, or Sole Proprietorship, the certificate you receive will vary.

How It Protects You

This certificate is like your studio’s suit of armor. It separates your personal assets (like your house and car) from your business assets. So, if anything goes wrong, your personal assets remain protected. 

Plus, it gives you the credibility to open a business bank account, enter into contracts, and impress potential clients.

How to Obtain It

Pick Your Structure: Decide on an LLC, Corporation, or Sole Proprietorship. Most small studios go for an LLC because it’s simple and offers good protection.

File the Paperwork: Submit the necessary forms to your state’s business filing office. This includes your business name, address, owner info, and a filing fee.

Wait for Approval: Usually, it takes 7-10 business days, but some states can expedite for an extra fee.

Let doola Help You: Book a free consultation with us to know more about formation and incorporation. 

#2 Certificate of Occupancy (CO)

This license proves that your space is safe and up to code with local regulations. Essentially, it’s the city’s way of saying, “You’re good to go.”

How It Protects You

Having a CO means your studio meets all safety and zoning laws, minimizing risks and keeping you out of legal hot water. It also reassures parents and students that your studio is a safe environment.

How to Obtain It

If You’re Renting: Usually, your landlord handles this. Just make sure it’s done before you sign the lease.

If You Own the Space: Contact your local government’s building or zoning department to schedule inspections. This can take a few weeks, so plan ahead. Or let us help you.

#3 Music Licenses

When you play music in your dance studio, you’re using copyrighted material. Whether it’s for ballet, hip-hop, or any other dance form, the music you use is protected by copyright laws. 

To legally play this music in a commercial setting, you need to obtain the appropriate licenses from music rights organizations.

These organizations collect royalties on behalf of artists, composers, and record labels. By obtaining a license, you’re paying for the right to use their music in your business.

How It Protects You

Obtaining music licenses protects you from legal action and fines for copyright infringement. It also ensures that the artists and composers who created the music you use are fairly compensated for their work.

How to Obtain It

Figure Out Your Needs: Decide how you’ll use music in your studio. Is it just background music, or will you record and share routines online?

Contact Music Rights Organizations: Reach out to ASCAP, BMI, and SESAC. They offer licenses tailored for dance studios.

Apply and Pay Fees: Complete the applications and pay the fees. Costs range from $60 to $2500 annually, depending on your studio size.

We at doola have experts who can contact music rights organizations like ASCAP, BMI, and SESAC and get your licenses processed in a few days. Get in touch with our experts to know more.

#4 Employer Identification Number (EIN)

Your EIN is like your studio’s Social Security Number. It’s essential for tax purposes and opening a business bank account.

How It Protects You

Using an EIN instead of your SSN protects your personal identity and keeps your business and personal finances separate.

How to Obtain It

Apply Online: Head to the IRS website and fill out the application. It’s free and you get your EIN instantly.

Let doola Take Care of It: While it’s possible to apply for an EIN independently, YOU should assess whether it’s the best use of your time. 

Mistakes even the tiny ones in the application process can lead to delays. We can assist in navigating the process efficiently, ensuring accurate and timely EIN issuance. 

If you have specific questions or need assistance related to EIN, grab a free consultation with one of our doola experts.

#5 Business Bank Account

A business bank account keeps your personal and business finances separate. It also allows you to remain better organized and keep track of your finances more efficiently.

How It Protects You

By separating your finances, you ensure clear records for tax purposes and protect your personal assets from business liabilities. Plus, it will save you from dealing with frustrating situations when you file your taxes, and it can help prevent problems with the IRS.

How to Obtain It

Choose a Bank: Look for one that offers low fees, online banking, and maybe even a sign-up bonus. We at doola recommend a virtual bank like Mercury due to lower fees. In addition, Mercury lets non-US founders open a US bank account remotely without visiting the US.

Gather Your Docs: You’ll need your Certificate of Incorporation, EIN, and personal ID.

Set Up the Account: You can usually do this in person or online.

Keep in mind: Separating your personal and business finances is like waving a flag to the IRS that says, “Hey, I’m running a real business here!” This distinction is crucial because hobby businesses don’t qualify for those juicy tax deductions.

If setting up a business account sounds like a hassle, let doola step in. We connect you with trustworthy banks and tax consultants each year so you have required banking support as you build your business empire.

Step-by-Step Guide to Obtaining Your Dance Studio Licenses

Step 1: Register Your Company

First things first, you need to register your dance studio as a legal entity. Most dance studios opt for an LLC (Limited Liability Company) due to its flexibility and protection. 

Here’s how you do it:

✅ Choose Your Business Structure: Decide whether you want to go with an LLC, Corporation, or Sole Proprietorship. For dance studios, LLCs are popular because they offer liability protection without the complexity of a corporation.

✅ File the Paperwork: Each state has its own filing requirements. Typically, you’ll need to provide the business name, address,and owner details, and pay a filing fee.

✅ Get Your Certificate: Once approved, you’ll receive your Certificate of Incorporation or Authentication, depending on your structure.

Pro Tip: If you’re outside the US, you can still register a US-based LLC. Foreign nationals can own US businesses, though there are some restrictions based on your home country’s laws.

Unclear about what you need to do to start a US company? Check out our formation services. 

Step 2: Choose Your State of Incorporation

Not all states are created equal when it comes to business laws. While it might be tempting to register in your home state, consider these business-friendly states:

Delaware: Known for its favorable business laws and low fees.

Nevada: Offers privacy for business owners and doesn’t tax corporate income.

Wyoming: Low filing fees and no state corporate tax.

Pro Tip: Even if you register in a business-friendly state, it might be more convenient to register in your home state if you only have one studio location.

Step 3: Assign a Registered Agent

A registered agent is a person or service authorized to receive legal documents on behalf of your business. This is crucial for staying compliant with state regulations.

Home State Agents: If you’re incorporating in your home state, you can be your own registered agent.

Agent Services: If you’re incorporated in another state, consider hiring a registered agent service. These services are affordable and ensure you don’t miss important documents.

Step 4: Obtain Your Certificate of Incorporation

With your registered agent in place, finalize your incorporation process and obtain your certificate. This certificate is your key to filing taxes, opening a bank account, and applying for other permits.

Pro Tip: If you have a foreign partner or investor, the state will issue an Apostille document, ensuring mutual recognition of business documents between countries.

Step 5: Register for Taxes

Next up, register your dance studio with the IRS and get your EIN. This is a straightforward process:

Apply Online: Visit the IRS website and fill out the EIN application. It’s free and you’ll receive your EIN immediately.

State Taxes: Don’t forget to register for state taxes. Each state has its own requirements, so check with your local tax authority.

We know the word “tax” can haunt you and give you sleepless nights, especially when you’re running your own business. But fear not! We’ve got you covered. Our in-house CPA and tax team are just a call away, ready to provide personalized assistance and banish those tax-time terrors.

Step 6: Open a Business Bank Account

A business bank account is essential for managing your studio’s finances. It separates your personal and business assets, which is crucial for liability protection.

💡 Choose a Bank: Look for a bank that offers business accounts with benefits like low fees, online banking, and bonuses for new accounts.

💡 Provide Documentation: You’ll need your Certificate of Incorporation, EIN, and possibly a personal ID.

Pro Tip: Some banks offer cash bonuses for opening a new business account. Research thoroughly for the best deal!

Step 7: Get Your Certificate of Occupancy

Before you start teaching, you need a Certificate of Occupancy. This proves your studio meets all local building codes and is safe for use.

✅ Landlord’s Role: If you’re leasing space, your landlord should handle this. Make sure it’s done before you sign the lease.

✅ DIY: If you own your space, contact your local government to schedule inspections. This process can take several weeks, so plan ahead.

Pro Tip: Minor renovations usually don’t require a new CO, but major changes do. Always check with your local authorities before starting any work.

Step 8: Comply with State Regulations

Even after you’re up and running, you’ll need to stay compliant with state regulations. This includes renewing licenses and keeping up with any changes in the law.

✍🏻 Annual Reports: Most states require businesses to file an annual report and pay a small fee.

✍🏻 Stay Informed: Regularly check with your state’s business office to stay on top of any new requirements.

Step 9: Maintain Your Business License

Finally, keeping your licenses up to date is crucial for staying in business.

✔️ File Taxes: Make sure you file your taxes annually with the IRS. Use your EIN for all tax-related documents.

✔️ Renew Licenses: Most licenses, including music licenses and your CO, need to be renewed annually. Mark these dates on your calendar to avoid fines.

Pro Tip: Consider hiring an accountant to manage your finances. They can keep track of due dates and ensure everything is filed correctly. We’d like to help you do that, and we have an in-house CPA and tax team that can file and support you with all your finance and accounting-related questions.

Build a Community Around Dance With doola

Creating your own dance studio is a thrilling journey, but it requires careful planning and the right licenses to operate legally and successfully. 

Each license serves a specific purpose, from protecting your personal assets to ensuring you comply with local regulations and copyright laws.

While obtaining these licenses might seem overwhelming, the process is straightforward if you follow the steps outlined above. 

With the right preparation, you’ll be well on your way to creating a thriving, legally compliant dance studio.

And when those inevitable doubts arise, let doola take the burden off your shoulders. Our experts are just a message away, ready to tackle all your tax, accounting, and formation concerns. 

Book a free consultation with us today and dance your way to a smooth entrepreneurial journey.