https://www.adlandpro.com/ad/42154845/PayPal-Merchant-Account-Requirements-A-Small-Guide-You-Can__Financial_219__around_elkgroveus3.aspx#.YsAs3LfMLIU

You need an official business license from the city/state where you work. Merchant account providers will take a look at your license to confirm that your business is genuine. Each state, and even city/country, has its business license of PayPal Merchant Account Requirements. This could include a state business license, local license, or DBA. Guarantee you check with your state to see what’s required.