The essential first step to managing business license compliance is to conduct proper and thorough research regarding business license requirements specific to a company’s business activities in all locations where you have nexus.
Right from the start and as your business grows, staying compliant with business licenses is important. Typical business events — including business formations, launching new products and services, changing a business name, adding a new location, and more — often trigger new business license requirements.
Maintaining compliance is no easy feat. Not adhering to these requirements can hit a business hard, leading to financial penalties or, in severe cases, even site closures. It's vital for any business, no matter its size, to keep up with these regulations.
Business license research: Fundamental and complex
Business license research can be a challenging step. Here are some reasons why.
- Across the U.S., there are thousands of local, state, and federal jurisdictions or licensing authorities, each with their own requirements.
- There are thousands of different license types.
- Information such as the correct licensing authority and how to contact them, their requirements and license types is often not easy to find. Thorough research requires extensive time either in online searches or talking directly with multiple government agencies.
- Regulatory bodies frequently alter their license requirements.
- Each licensing authority sets varying frequencies for filing requirements across different licenses. Comprehending the criteria for one business license filing might not be applicable to other mandatory filings.
- Certain straightforward business events may cause new unforeseen licensing requirements. For example, in some states, changing a business name or office location can require an entirely new license.
- Certain industries and types of business activities have special requirements for business licenses. For example, the requirements related to providing construction services can vary significantly by state.