ComplianceLegalFinanceDecember 28, 2020

Keeping up with business licensing requirements

Virtually every business has to comply with a variety of business licenses, permits and registrations. Companies have to handle these tasks not only when starting out, but also when growing or expanding, and even when deciding to close or sell a business.

Depending on your business needs, you may decide to do this yourself or to outsource some or all of your licensing obligations. Outsourcing options include full outsourcing, preparation-and-filing services, and research-services-only. Business licensing software helps automate the process.

Keeping your compliance up-to-date helps to maintain your good reputation, goodwill, and positive public relations in today’s increased focus on compliance and transparency. It also heads off “paperwork” delays in opening a new location or expanding into new products or services.

License, permit and registration requirements vary by the type of business or activity, and may be imposed by authorities at the local, state, or federal levels. For a discussion of the types of licenses typically required, and tips on handling these obligations, see our related article, Neglecting business license requirements can be costly.”

In recent years, some local authorities have increased enforcement efforts against unlicensed businesses. Also, financial and budgetary constraints have prompted some authorities to consider higher fees, new types of licenses, or both.

Staying compliant with license, permit and registration requirements

Staying compliant requires keeping up with renewals plus complying with any other regulations or requirements levied by agencies.

Events that typically trigger new licensing requirements include adding new products or services, changing your entity name or structure, and changing operational activities. Expanding geographically also calls for examining any new requirements, which may or may not be the same as those in your current locale.

If you decide to do this yourself with internal resources, it’s a good idea to track all renewal dates in your calendar system and set up early reminders that provide you advance notice of due dates. Also, your business records should include copies of applications and licenses.

Each authority has its own procedures for completing forms and paying associated fees and taxes. Business license management software typically accounts for this and associates entities with locations.

For many businesses, outsourcing some or all of the business license research may be a more viable and cost-effective alternative. We offer a Business License Research service to quickly and accurately identify all the applications for licenses, permits and tax registrations that are needed for your business.

If you want to do your own preparation and filing, research services could perform a gap analysis to identify whether you are compliant or require any necessary actions. Another option is to use a provider for preparation and filing, along with the research and gap analysis. These services are typically provided on a one-time, as-needed basis (e.g., when opening a new location or launching a new line).