What Are The Legal Requirements For Starting A Food Truck In 2021?

What Are The Legal Requirements For Starting A Food Truck In 2021?

Interested in starting a food truck?

Starting a food truck involves commitment, hard work and most importantly passion.

However, before diving into all the exciting parts of starting your business, it's critical that you understand and meet all the legal requirements.

In this guide, we'll cover all of the prerequisites you need to fulfill, such as:

  • Licenses and certificates required to start a food truck
  • Insurance requirements required to start a food truck
  • Permits needed for your food truck
  • Establishing your food truck (formation and legal)

At the end of this article, we provide you access to a step-by-step guide on how to start your food truck.

List Of Legal Requirements For Starting A Food Truck

Just like any other business, it’s critical that you establish the proper licenses, permits and insurance so you can legally operate your food truck.

Let’s dive into these requirements and regulations.

Licensing Required To Start A Food Truck

Obtain A Vendor License For Your Food Truck

  • A vendor license essentially allows a business owner to make money from selling their product
  • The cost of a vendor license ranges anywhere from $20-$50
  • Some states require different types of vendor licenses, so check with your municipality first to see the exact vendor license(s) you are required to have.
  • To apply for a vendor license, go to the website of the municipality you plan to operate your food truck in. You can learn more about applying for a vendor license here

Obtain A Vehicle License For Your Food Truck

  • This applies to all food establishments on wheels.
  • Depending on the length and weight of the vehicle, certain states may require a commercial drivers license (CDL) to operate your food truck. In most cases, a simple drivers license and registration will suffice.

Get Your Food Handlers Card

  • A food handlers card is a certificate that ensures employees handling food or beverages are knowledgeable on food safety practices. To see if your state and municipality requires this certificate, check out this list
  • The cost to take your food handlers course is relatively inexpensive, ranging anywhere from $7-$10

Permits Required To Start A Food Truck

Obtain A Health Permit For Your Food Truck

  • Depending on where you operate your food truck, you are required to have a health permit. This is a thorough inspection that verifies the safety and cleanliness of your operation
  • The cost of a health permit ranges anywhere from $500-$1,000
  • You can find local health departments and regulations specific to your area here

Obtain A Parking Permit For Your Food Truck

  • Depending on where you decide to park your food truck, you are likely required to obtain a parking permit. Most cities have zoning restrictions that only allow a food truck to park in specific areas.
  • To determine where you can and cannot park your food truck, reach out to the county clerk for this information.

Insurance To Get When Starting A Food Truck

There are three main types of general business insurance that you may want to consider getting to manage risks for your food truck:

  1. General Liability Insurance: this insurance protects your business from lawsuits.
  2. Professional Liability Insurance: covers claims of malpractice and other business errors (typically used for providers such as consultants or accountants.
  3. Workers Compensation Insurance (usually required if you have 1+ employees): provides coverage for employee's job-related illnesses, injuries, or deaths.

How Much Does Business Insurance Cost?

The cost of small business insurance depends on the type of insurance your business needs, but typically ranges between $700 and $3,800 a year.

You can get a free quote for your business insurance here.

Setting Up Your Food Truck (Formation and Legal)

When it comes to setting up your business, you may find yourself in a place where you have to make some financial and legal decisions.

The first thing you'll want to decide on is whether you want to be an LLC, S-Corp, or C-Corp.

These three options are found to be the most common when starting a small business, and all serve to protect your personal assets and also provide you with certain tax benefits.

  • LLC: All income and expenses from the business are reported on the LLC personal income tax return.
  • S corp: Owners pay themselves salaries + receive dividends from profits.
  • C Corp: C Corps are separately taxable entities that file a corporate tax return (Form 1120). No income tax is paid at the corporate level and any tax due is paid at the owners individual expense.

Depending on where you're conducting business, you'll also want to consider securing the proper permits, licenses and liability insurance.

Learn more about securing the right permits and licenses ➜

Need to start an LLC? Create an LLC in minutes with ZenBusiness.

How long will it take to form my LLC?

If you submit and make payment for the articles of the organization online, the formation will be immediate.

If you file by mail, this could take 5-7 business days.

Do I need a DBA?

A DBA is a new name a business operates under their legal name. DBA can also be referred to as a fictitious name, assumed name, or trade name.

If you are forming an LLC, you have already registered your business name and do not need a DBA.

However, if you would like to conduct business under a different name, you can register a DBA.

Learn how to file a DBA here.

Is it required to get an EIN for my LLC?

If you have operate an LLC with employees or with more than one member, it is required by the IRS that you have an EIN.

Conclusion (+ Free Guide)

As you can see, there is a lot that goes into starting a food truck. Once you have secured all the proper licenses, permits and insurance to operate your business, there is still plenty of work to be done.

We put together a guide on how to start a food truck, with real life examples and data points here.

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