Enforcing Business License Laws

State regulatory agencies take great steps to identify and penalize unlicensed business operations. Unlicensed businesses diminish the integrity of the profession, create undue competition for properly licensed businesses, and often provide inadequate goods and services. State agencies utilize many different methods of investigation to zero in on unlicensed businesses, including: task forces, sting operations, and encouraging public complaints.

Many agencies make it part of their mission to actively investigate complaints and to punish unlicensed business operations. Florida’s Department of Business and

Professional Regulation conducts quarterly stings and sweeps of all 18 different professions that it regulates1.

Their goal is to send a strong message that unlicensed activity will not be tolerated.

The New Jersey Division of Consumer Affairs has taken a proactive approach on identifying unlicensed businesses. The agency launched a sting operation where officials posed as customers on Craiglist.org to solicit the business of 25 moving companies, most of whom were not properly licensed2. The state performed similar crackdowns on predatory towing companies, misleading tax advertisements, and unlicensed contractors.

Other localities use stealth tactics to uncover noncompliant businesses. The City of Chandler, AZ assigned an employee to investigate new businesses in the area. The employee investigated home based businesses in residential neighborhoods and new tenants in business parks and strip malls3. The city’s hunt for unlicensed businesses has become quite fruitful bringing in more than $70,000 in license fees and $550,000 in ongoing tax revenue.

State agencies have also made it easier for citizens to file complaints to report unlicensed activity. Many states have online submissions available. Efforts to increase public awareness of the risks of engaging unlicensed businesses have increased the amount of complaints received.

Many examples exist of state agencies going to great lengths to find unlicensed businesses. These illegal businesses threaten states by underbidding industry professionals, evading taxes, and avoiding compliance with industry regulations. It is only a matter of time before an unlicensed business is caught. LicenseLogix will help get your business properly licensed and keep you in compliance.

1 Florida Department of Business & Professional Regulation. www.myfloridalicense.com
2 Jones, Stacy (2011, July 6) State Officials Catch Unlicensed Moving Companies in Sting. The Star Ledger.
3 Jensen, Edythe (2011, Sept. 23), Chandler’s Unlicensed Businesses Monitored. The Arizona Republic.