Almost every business will need some form of license to legally operate, whether it be a business, professional, or industrial license. Such licenses may impose important responsibilities on business owners; most importantly, ensuring compliance with any licensing registration or reporting requirements to avoid penalties, fines, and other legal and financial risks.

Compliance is necessary for every business; however, licenses can be complex, as some licenses may require passing an examination or satisfying certain criteria. Additionally, licensing requirements vary by state, so proper research and planning is necessary to ensure compliance.

Licensing Requirements

Depending on the jurisdiction, licensing requirements are issued by state or local authorities. State-level licenses usually cover all work conducted throughout the state; however, local-level licenses may be needed in each city or county in which a business is operating. As such, it is important to research the requirements for professional licenses, business licenses, and tax registrations to ensure that your business is compliant.  Food and beverage, healthcare, and the trades are especially intensive on licensing requirements.

Maintaining Compliance

It is important to note that compliance with licensing requirements does not end once requisite licenses are obtained. Events such as the retirement of the licensed professional, expansion of locations, and administering new fields of work, as well as corporate changes such as conversions, mergers, withdrawals, and dissolutions can impact licensing requirements and trigger the need for additional licenses. Further, many licenses require periodic inspections of facilities, or ongoing education or certification renewals.

Implementing a plan to strategize how your business will stay compliant with ever-changing laws and regulations is necessary to avoid fines and sanctions. At a minimum, a compliance strategy should maintain records of obtained licenses, licensor authority information, copies of documents, and renewal deadlines.

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This Blog was written by Hunter Business Law Legal Assistant Kayla Crider. 

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