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When Do You Have to Update Your Business Licenses?

When Do You Have to Update Your Business Licenses?

In today’s highly regulated environment, keeping up with your business licensing is not only beneficial from an operational standpoint—it’s good for your reputation as well.  To stay compliant, a business needs to first obtain the right licenses, permits or registrations, and then monitor and comply with renewals and any other regulations or requirements levied by government agencies.

Consequences of noncompliance can range from fines to criminal sanctions to operational shut-down. In addition, proper licensing helps you avoid delays in expansions, mergers, and other transactions.

CT Note: Laws and regulations are continually changing, along with the varied number and types of licenses, permits or registrations a business may need. Maintaining proper compliance requires staying up-to-date with the different license, permit and registration procedures of the various governmental authorities.

Evolving Business Licensing Needs

Obtaining the licenses, permits or registrations you need to run your business is only one piece of the license management puzzle. As your business evolves, and as regulations change at the federal, state, and local levels, your licensing needs can change as well.

Here are some common trigger events that can result in the need to update existing or obtain new licenses, permits or registrations:

► Adding a new product or service line (e.g., a restaurant starting to sell alcohol; a hair stylist also selling beauty products)

► Starting a new business

► Remodeling

► Hiring minors

► Change in hours or days of operation

► Name change

► Officer change

► Address change

► Ownership change



► Incorporating a sole proprietorship

►Changing business entity forms (e.g. changing from a corporation to an LLC)

► DBA name change

► Opening or adding a new location

► Moving headquarters 

► Merger or similar transaction between two companies

► Regulatory or other changes at the federal, state and local levels

The impact of these and other changes varies—especially at the local level—and is dependent on the type of business, location, municipality, and other factors.

Business Closing / Company Dissolution

If a business closes a location, or if the company—if it is a corporation or LLC—dissolves, existing licenses should be canceled accordingly. As with the initial filings and renewals, this may need to be done at some or all of federal, state and local levels.

Conclusion

When making a change regarding a business or its operations, it is best to look into any impact on the business’ licenses. There may be a need for new licenses or for an update or cancellation of existing licenses. Also, in light of ongoing changes at the federal, state, and local levels, it is good to regularly re-evaluate business licenses, permits, and registrations. 

See our related articles for more on business licensing:

 

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