Do you need a license to sell soap? The short answer is no. The long answer is still no, but there are vital steps you need to take in order to avoid penalties and operate a legal soap-selling business.
Many of us dream of starting our own business. The vision of seeing our brand on shelves and in checkout carts across the country is enticing to say the least. Unfortunately, as you might have already guessed, there are occasionally some logistics to tackle first. While you don’t need a special license to sell soap the same way a financial advisor needs a license to sell securities, there are some steps and research you should consider taking when forming a business.
You will need to check and see if your state requires a general business license or permit. This is not specific to homemade goods or soaps. Simply put, some states require a permit to sell goods or services. Familiarizing yourself with some terminology and U.S. FDA and USDA classifications prior to forming your business is also a good idea. With this knowledge, you’ll be able to gain trust and credibility with your customers.
Once you’ve done some research, etched out some business goals and have a silky smooth name for your soap business, now would be a good time to check in with your state and local government about paperwork! Not sure why we included an exclamation mark there, but thought we had to liven this part up a bit. Do you need to form an LLC? We are in the business of soap, not in the business of offering legal advice, so you might want to get a second opinion. There are certainly benefits to forming an LLC.
Forming a Limited Liability Company
A limited liability company, or an LLC, is one of the most efficient and easiest ways to start a business. This is especially true if you’re the sole owner and operator of your soap shop. You’ll need to select a name for your business, which will be the title of your new LLC. Each state holds its own rules and regulations regarding the name choice for an LLC. For example, some states prohibit the use of the words “corporation” or “incorporated.” You will want to brush up on your state’s LLC rules and regulations so that your name choice remains compliant with the law.
Generally speaking, you do not need an attorney to form an LLC for your soap business. The most important part of the LLC formation process is abiding by your state’s laws and ensuring your business is operating legally.
(Please note that if you are selling products to Canada, you are responsible for following the Canadian rules and regulations.)
Follow the Food and Drug Association Label Guidelines
Label requirements are fairly simple but vast. While you don’t need a special license to sell soap, you do need to adhere to specific FDA regulations when it comes to marketing your soap. For all of that information on what you can and cannot say (including any medical claims!), please refer to the FDA guidelines on Soap. Product labels must contain the product’s name, ingredients, direction for use, quantity size, and expiration date in clear and legible writing. Product ingredients need to be listed by their common or scientific name without any further information.
Use the Right Verbiage
While the FDA does not regulate the term “organic,” the USDA does. Therefore, you can not claim that your product is organic unless it is individually tested and approved by the USDA as certified organic. However, soap sellers may advertise on their label that their product is made with USDA organic ingredients, but the product itself can not be advertised as organic.
At Botanie, we use only certified organic oils for the base recipe in all our soap and we have organic certification under the USDA’s National Organic Program. We make every bar with a minimum of 85% organic ingredients. Our foaming soap and Castile soap have a minimum of 81% organic ingredients. Due to the chemistry of soap, it is almost impossible to go much higher than these numbers.
When You’re Ready to Sell
Congratulations! You have your soap, you have your business name and you’ve taken the steps to register your business with the state and any local business licenses you might need. For more tips and tricks about marketing your soap business, check out the Botanie Soap YouTube channel to view our full marketing series.