With a few exceptions, each money services business must register with the Department of Treasury. This registration must be renewed every two years. Civil and criminal penalties may be imposed for violation of the registration requirement.
License requirements for money service businesses are different in each state. Commonly regulated services include check cashers, money transfers, credit unions, currency exchanges, commercial banks, and small loans. Applicants must often provide the state with businesses financial statement, corporate documents, and bonds. The state may also require biographical statements, fingerprints, and criminal history reports from each owner of the business. Each business location must be licensed and all types of money service licenses are renewable.
Business license considerations
Businesses functioning without the proper license are generally penalized based on the size of the operation and the gravity of the offense.
Business license regulatory insights: Money transmitter
Money transmitter services have become essential in today’s environment. Operating a money transmitter business requires compliance with federal and state regulations.
CT Corporation’s dedicated business license experts analyzed licensing requirements for 50 U.S. states and the federal government in a comprehensive report.
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Does Digital Currency Transmission Require a Money Transmitter License?
In response to emerging digital currencies such as Bitcoin, states have started to consider changes in state statutory language impacting cryptocurrency or digital currency transmission and its placement within “stored value” or “money transmission” statutory definitions. Many states are moving towards the inclusion of this form of currency within money transmission license requirements. CT Corporation tracks licensing changes within the money services industry. We assist our money transmitter clients with license compliance by providing customized research to identify whether their transactional activities fall under the parameters of state level money transmission licensing regimes.
Please contact CT Corporation to see how we can assist with your money services business licensing needs.
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What is a business license?A business license is an approval or permit issued by a government agency that authorizes a business to operate within a specific jurisdiction. This license is often an additional requirement beyond the registration of a business at the state level. Whether a business is required to have a specific license depends on such factors as the nature of the business, types of products sold, and location.
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How often do business licenses renew?Businesses are often reliant upon their own compliance tracking to stay on top of renewals. While the licensing jurisdiction may send a renewal notice, entities should not rely on this reminder method. CT Corporation has developed a Client License Information Center, CLiC, to help manage the renewal process and avoid delinquent charges and fines.
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How long are business licenses valid?The term of a license is entirely dependent on the type of license. Some licenses are good for the life of the business while others must be renewed annually or every two years. However, laws can change frequently so businesses must stay abreast of changes that affect the term of their license.
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What is a sales tax ID?Although Sales and Use Tax registrations would seem to be the most basic of business license filings, the requirements can vary from state to state, county to county and sometimes even by municipality. These applications can be confusing and time consuming. Contact CT Corporation for assistance.
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What is an EIN?An EIN is a unique nine digit number assigned by the IRS is used to identify business entities and is also known by other names such as 'Federal Tax Identification Number' and 'Tax Identification Number (TIN)'.