Renewing a business license is just as important as getting an initial license.
Many state government departments don’t issue reminder notices about pending license expiration, so it’s important to stay on top of business license renewals or risk serious penalties.
How often do business licenses need to be renewed?
Business licenses generally need to be renewed every one, two, or three years, depending on the type of license, along with state and local requirements.
For example, a business located in Dover, Delaware, may have both state and city business license obligations. A Delaware business license issued by the Division of Revenue is available as a one-year or three-year license. The one-year license expires on December 31 each year, while the three-year license expires on December 31 of its third year. Meanwhile, a Dover city business license is active from August 1 to July 31 of the following year. A license purchased in November, for instance, would only provide about eight months of coverage before it's due for renewal.
A business with locations in more than one state, or even multiple cities within the same state, will likely encounter different license renewal deadlines for each location.
How do I know if my business license is still valid?
You can check the status of your business license by contacting the state or local licensing authority where your business is registered. Many agencies also offer an online search tool where you can look up your license by business name or license number to confirm its current status and expiration date.
What are the penalties for operating with an expired business license?
As regulation of business licenses increases, so do enforcement actions against business license violations. . The consequences of letting your license lapse can be significant.
Penalties for operating with an expired license can include the following:
- Fines:Some states impose costly fines, interest, and even personal liens.
- Negative publicity: Your business may be publicly listed by the state as operating without a license.
- Business interruption: Agencies can require that expired license holders are to cease business until the license is reactivated.
Expired license holders can also attract media attention. In Georgia, a local TV station reported on funeral homes that were operating with expired licenses. A local resident who was interviewed said he would not trust a business operating without a valid license. Along with bad press, the funeral homes faced a cease and desist order, a mandatory hearing before the Georgia licensing board, and multiple fines and fees.