Launching a New Business – Avoiding Regulatory Pitfalls
ComplianceLegalMay 14, 2024

Keeping up with business licensing requirements

Virtually every business must comply with various licenses, permits or registrations. Not only do these tasks need to be handled when starting out, but also when growing or expanding an existing business, and even when deciding to close or sell a business.

License, permit and registration requirements vary by the type of business and may be imposed by authorities at the local, state, or federal levels. For tips on handling these obligations, see our related article, Understanding business license requirements and obligations.

This article addresses the importance of keeping your licenses up to date and active by renewing or updating your information. 

Staying compliant with business license, permit and registration requirements

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

If you decide to do this 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.

Why keep up with business license renewal requirements

After your business license application is accepted and you receive your license, you're legally authorized to operate that business for a specific duration. Nevertheless, several business licenses require renewal, so be sure to take note of any renewal prerequisites to prevent your license from lapsing. The renewal term can vary, for instance, annually or every five years, depending on the kind of license.

Keeping your compliance up-to-date helps to maintain your business’ good reputation and goodwill, in today’s increased focus on compliance and transparency. It also heads off potential delays in opening a new location or introducing or expanding new products or services.

Failing to renew your business license can lead to penalties, fines, and even business closure until the matter is resolved. During this process, your business may lose revenue and still be responsible for expenses such as rent, salaries, utilities, and more.

Easily manage complex requirements
There are over 75,000 federal, state, and local jurisdictions.  As their compliance requirements become more complex, we’re the partner that can help you manage them all.

When should you update your business license?

Not only do licenses need to be updated prior to their expiring, they also need to be updated any time there is a change in information regarding your licenses such as:

  • Changes to business ownership: If there is a change in the ownership structure of your business, such as a sale or transfer of ownership, you may need to update your business license.
  • Changes to business name: If you change your business name or adopt an assumed business name, you will need to update your business license.
  • Changes to business location: If you move your business to a new location, you may need to obtain a new business license or update your existing license with the new address.
  • Changes to business activities: If you add or change the types of products or services you offer, you may need to update your business license.
  • Changes to business structure: If you change the legal structure of your business, such as from a sole proprietorship to an LLC or corporation, you may need to obtain a new business license or update your existing license.
  • Expiration of license: If your business license has expired, you will need to either reinstate it or file for a new license in order to continue operating your business legally.
  • Changes to responsible party:If your license is filed with a regulatory board or department such as construction or insurance and your responsible party changes, you will need to update your existing license.

See our related article: My business license is expired. What do I do?

General steps to business license renewal:

The specific steps to renew a business license may vary depending on your location and the type of license you have, but here are some general steps that may apply:

  • Determine when your licenses expire: Check the expiration date of your current business license to ensure you have enough time to renew before it expires.
  • Review the renewal requirements: Check with your local government agency or department to find out what documents or information is required to renew your license. This may include providing updated business information, proof of insurance, or additional permits.
  • Complete and submit the renewal application: Fill out the renewal application and provide any necessary documents or information. Some local governments may allow you to renew online, while others may require an in-person or mailed application.
  • Pay the renewal fee: There is usually a fee associated with renewing your business license. Be sure to pay the fee in full and on time to avoid any late fees or penalties.
  • Wait for processing: Once you have submitted your renewal application and payment, wait for your application to be reviewed and approved by the relevant government agency.
  • Receive your renewed license: If your renewal is approved, you will receive a new license with an updated expiration date. Keep the license in a safe place and make sure to display it prominently.

It's important to note that renewal requirements and deadlines can vary depending on your location and industry. Licensing authorities change their renewal rules, forms and processes on a regular basis.  Make sure that your contact information (e.g. contact name, email address, corporate office address) is up-to-date with the authority so that you can receive timely updates on any regulatory process changes.  Staying informed of any changes or updates to the renewal process will ensure that you can renew your business license on time and continue operating your business legally.

For more information, read the related article: The six steps of business license compliance

CT Corporation can help

Outsourcing business license research, applications, management, and renewals can help you take the pressure off internal resources. By working with a full-service management provider who specializes in the efficient processing of business licenses, permits, and registrations, you can free up your time to focus on growing your business while ensuring you keep up with changing compliance requirements.

Learn more

Business license management is challenging. It can be confusing to understand exactly what type of license you need, how to register your business, and when and how to renew a license. CT Corporation is here to help.

For more information on CT Corporation services and how we can streamline your business licensing, contact a CT Corporation business license specialist.

John Randazzo, Business Consultant
Business Consultant
John has been consulting with corporations and law firms on corporate legal transactions and business entity compliance since joining CT Corporation in 1994.
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