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      January 26, 2026

      Be prepared: Business licensing due diligence for corporate and M&A transactions

      Business licensing due diligence helps organizations navigate corporate changes or M&A by assessing license needs, identifying risks, and ensuring timely updates. A structured approach reduces fines, delays, and compliance issues.
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      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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      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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      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)'.

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