Business Licensing Requirements
By David Yount
Every business must ensure that it maintains the appropriate licenses, permits and tax registrations before doing business. Licensing requirements exist to regulate businesses and to protect the public, and can be mandated from the local, state and federal levels. These requirements apply to entities and/or individuals associated with entities.
From the perspective of businesses, compliance with licensing regulations entails a tremendous amount of paperwork, time and fees. Some companies may need to obtain multiple licenses and some regulated activities may come as a surprise to many companies.
Accordingly, the assistance of a professional service company such as LicenseLogix in managing all business licensing activities is extremely valuable, especially for determining specific licensing needs beyond general requirements applicable to all businesses. Our licensing experts will guide a business through its entire life cycle by assessing what licenses are required, aiding in the application for such licenses, and managing the renewal of the portfolio of licenses obtained. It is also vital for companies to fulfill requirements related to retaining a license and to ensure that licenses have not been revoked.
Some dramatic examples of licensing snafus starkly demonstrate the importance of proper licensing. The ramifications of a blunder can seriously impede operations, destroy good will and unnecessarily cost companies thousands of dollars. Regulators do not discriminate—an enforcement action may be imposed whether the company is a mom-and-pop corner store or an established corporation. Aside from monetary penalties, cessation of operations, and potential criminal sanctions, citations also impair the morale of businesses. These penalties can apply to both willful and ignorant violations.
Below is a compilation of unlicensed business operations featured in the media, which run the gamut of license type, operator type, and penalty type.
- In Washington D.C., a bike store was fined $2,000 for selling food items without the appropriate food license. Read more
- In another food operation absent any license, the police shut down two middle school boys for selling baked goods in a park in Chappaqua. Not only did these boys lack a license to sell food, which the town required, but they also lacked any business structure. Read more
- Even companies that do not operate solely as charities must obtain licenses for charitable sales promotions under some state charitable solicitation laws, which among other rules, establish registration and bonding requirements. Read more
- Charges were filed against one of the nation’s largest senior living companies for operating an unlicensed assisted living facility and misrepresenting its licensure status to the public. The facility was licensed to serve as a residential care facility, but lacked a license to provide nursing care. Read more
- Various unlicensed schools in Massachusetts were warned to obtain a license or cease operations because the state requires licensure by the Department of Elementary and Secondary Education for anyone operating a private business, correspondence, or trade school.
- The Better Business Bureau issued a warning to consumers that a Texas furniture and bedding retailer was operating without a required competency license from the state. Additionally, respondents to franchise opportunities with the company could also incur charges for selling bedding without proper licensing.
- Some investigations companies (commercial firms that provide evidence for use in court) have faced legal action for operating without appropriate licenses. Read more
- A funeral home was put under investigation for operating without a license. Although both the business and its director had their licenses permanently revoked, they continued to operate. The director claimed that he was unaware that his license was permanently revoked. Read more
- A gold broker was arrested for operating without a license as required under the Precious Metal Act. And this broker was a repeat offender, because according to police, this was the third time he was arrested and charged for doing business without a license in less than two months. Read more
- New Jersey fines loan modification companies for operating without a license. Read more