Business license is a specific document that allows doing business and operating in a specific business area. Generally, the license is issued by the government, agency, or government agency. The requirement of a permit prior to the incorporation of a particular business is usually mandated by law.
Doing business without a license when the law requires you to buy is illegal and the government inspector can impose a fine requiring cessation of activity unless the required license is issued. As a rule, licenses relate to specifically regulated business areas such as banks, alcohol and cigarette trading, petroleum business, provision of taxi services, security services, etc. When applying for a licence, several conditions must generally be met in order to ensure that the trade can be carried out with a high level of security professionalism and meets the specific requirements. The general purpose of licensing is to protect public interests such as health and safety and to control strategic or relevant industries.
License and Permission
Many types of businesses require certification or approval in addition to regular licenses. Contrary to the concession, the permits relate to the authorization to carry out an activity that is related to and directly related to the activity of the company. For example, a fire permit if your business uses flammable materials or if your premises are open to the public, such as restaurants, shops and other public buildings. Permission to use the parking lot if you provide taxi services, permission to start new construction or renovation, and permission from environmental protection agencies if your business may harm the environment, etc.
Doing business that requires a license or permit
At the company formation and incorporation phase, it must be determined whether a license is required. A license is usually required when providing financial services, such as banking, as the strict regulation of EU law applies. The same applies to other monetary services, which include money transfers, financial institutions, insurance and insurance brokers, trading in bonds and securities, trading in jewelry. In some jurisdictions, a license for accountants, lawyers, notaries and bailiffs is required. A permit is required for construction work on the site. Another type of sales tax should be applied if some jurisdictions require a seller’s license plus registration in the tax register, sales tax payer register or the purchase of a tax-free certificate.
Depending on the type of products, the licenses and permits may be required for different areas, for example, for alcohol trade, you may need a wholesale or retail license, or a license for highly alcoholic beverages and beer. If the company conducts business related to the sale of excise products such as coffee, oil, tobacco, or provides storage services for the above products, these activities require the acquisition of a license.
Pharmaceutical, drug production and activities in connection with addictive and psychotropic substances also require a special license, which usually includes several criteria to be fulfilled, as the activities are directly related to human health care.
Before fully commissioning, the company should determine whether the planned activity requires a permit so that the company can submit an application to the responsible institution if necessary. In order to obtain a license, documents must be drawn up confirming that all criteria have been met. Depending on the type of license, not only conditions may be met for the company, but employees or employees of the company may also have to undergo certain procedures.
After all documents are ready, they must be submitted to the responsible institution. After revising the submitted documents, the institution checks whether the documents comply with the laws and regulations. If so, a license is granted. Purchasing a license often requires payment. The license can be issued for one year, five years or another term as well as for an indefinite period.
Possible penalties for doing business without a license
If the company does business without a license or authorization, the company can be punished by the government officials. First of all, a fine can be imposed on the company as a sanction. Company officials can also be punished. Second, the company’s operations can be suspended until the company acquires a license. If the activity is illegal and the company does not meet the requirements for obtaining the license, the company can be permanently suspended or even terminated. If the license or permit has expired, the company may be fined and asked to renew the license as soon as possible.