Finance:Business license

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Short description: Permits issued by government agencies that allow individuals or companies to conduct business


Business licenses are permits issued by government agencies that allow individuals or companies to conduct business within the government's geographical jurisdiction. It is the authorization to start a business issued by the local government.[1] A single jurisdiction often requires multiple licenses that are issued by multiple government departments and agencies. Business licenses vary between countries, states, and local municipalities. There are often many licenses, registrations and certifications required to conduct a business in a single location.

Typically, a company's business activity and physical location (address) determines which licenses are required to operate lawfully. Other determining factors may include the number of employees and the business, such as sole proprietor or corporation. Government agencies can fine or close a business operating without the required business licenses.

Licensing and business registration requirements

United States

In the United States, the Small Business Administration has a list of links to State websites for State licensing requirements.[2] Each State has its own business registration and licensing requirements. Business.usa.gov is an official business link to the U.S. Government. Business.gov, managed by the U.S. Small Business Administration.

Example: Washington, D.C.

In Washington, D.C.

The Department of Consumer and Regulatory Affairs (DCRA) is the District of Columbia's regulatory agency. DCRA ensures the health, safety, and economic welfare of District residents through licensing, inspection, compliance, and enforcement programs. In addition, Department of Health (DOH) issues certain professional licenses, District Department of Transportation (DDOT) regulates public space, and Office of Zoning (DCOZ) controls land use.[3]

Most individuals and companies doing business in the District of Columbia must obtain a Basic Business License from the Department of Consumer and Regulatory Affairs.[4] Separately, organizations (including non-profits and cooperatives, but not including sole-proprietorships and general partnerships) must register their business. Many types of businesses require additional certification or permits beyond the Basic Business License and registration. D.C. requires a "Clean Hands Self-Certification" from most applicants, which is an affidavit stating that the applicant does not owe more than $100 to the District. Tour Guides must submit a Physician's Certificate. Fees for businesses licenses vary. The fee for a Special Event license such as a marathon is $209. The license for a movie theater costs $1,079 per year, for a grocery store $289 per year, for a beauty shop $78 per year. (2003 schedule of fees, current as of March 2007) A Project Management Firm does not require a Basic Business License, nor does a Handyman. Residential House Painters must submit a Home Improvement Contract signed by the homeowner.

Physicians and other health care professionals require licenses from the Professional Licensing Administration in the Department of Health.[5]

Example: California

California requires the registration of the businesses of service contract providers after providing information, payment of fees, and other information. California filed a cease and diest order against 3 service contract providers for failing to register.[6]

Example: Pennsylvania

Pennsylvania allows online registration of small business start-ups, but does not provide licensing guidance.

The Pennsylvania Open for Business Online Business Registration Interview (OBRI) is a step-by-step wizard that guides users through the process of registering an enterprise with the Departments of Labor & Industry, Revenue, and State.
The OBRI is a business registration tool and is not intended to be a replacement for professional consultation with qualified practitioners. The laws and regulations governing business start-up, practice, and expansion are varied and compliance with such standards depends upon the particular circumstances of a business. If legal advice or other expert assistance is required, the services of a competent professional should be sought.[7]

Certain actions are required by all businesses in Pennsylvania in order for them to continue in business in Pennsylvania.[8] This includes New Hire Reporting (including reporting oneself as a new hire when starting a business).

United Kingdom

In the UK there is no requirement to obtain a licence to run a business. [citation needed]

Pakistan

In Pakistan, a business license is needed when you want to start a private limited company or a limited liability partnership (LLP) firm. There are actually various forms of business licenses needed for various activities carried out by a business. e.g. to be able to Import or export goods and services, you need to take IEC Registration. Major authority governing licensing is Ministry of Corporate Affairs, which regulates which name you will be allowed to keep for your business and also the activities you are allowed to do in your company. It is very easy to register a Pvt Ltd Company or LLP in Pakistan, which takes not more than 10 days. Costs would depend on the state of Pakistan in which company or LLP is proposed to be registered. It would cost you around PKR 2000 to PKR 10000 depending on what is your authorised captal in business.

Iran

Iranian G4B.ir government for business website was developed it also has a database.[9]

China

The business license in China has undergone a series of changes and reforms. From 1978 to the 2000s, China implemented the Reform and Opening-up Policy, which allowed for private entrepreneurship. This resulted in the creation of a registration and licensing system. During the 80s and 90s, the registration process became more formalized. Different licenses were required for various types of businesses, including state-owned, private, and foreign-invested enterprises. Despite this, the regulatory environment was fragmented during this period, with multiple licenses and permits needed to operate a business. Companies were often required to have a business license, tax registration certificate, and organization code certificate, among others.

In 2015, the Chinese State Council implemented the "Three-in-One" Reform to simplify the business registration process and streamline administration. This reform combined the business license, organization code certificate, and tax registration certificate into a single document called the "Three-in-One" business license, featuring a unique 18-digit identifier for every business called the Unified Social Credit Code. Building on the success of the "Three-in-One" reform, China combined the social insurance registration and statistical registration with the previous three in 2016-2017, resulting in a "Five-in-One" business license. These reforms significantly simplified the registration and operation procedures for businesses in China, promoting a more business-friendly environment and reducing unnecessary bureaucracy. These reforms align with China's larger goals of modernizing its business environment, fostering entrepreneurship, and attracting foreign investment.

When reviewing a Chinese company's legitimacy, their business license is a crucial document to examine. This license provides important information about the company's legal status, business scope, and other essential details. The typical Chinese business license includes 13 main components. These components are the Unified Social Credit Code, Company Name, Type of Company, Registered Address, Legal Representative, Registered Capital, Date of Establishment, Operation Period, Business Scope, Issuing Authority, Date of Issuance, Official Stamp or Seal, and License Format. The QR code on the license can be scanned with a smartphone to access the official registration details of the company. If you have any doubts about the license's authenticity or want a more thorough due diligence process, professional services or platforms that offer Chinese company verification services can be considered.[10]

See also

  • BizPaL, Canadian service for SME permits and licenses
  • List of company registers
  • Barriers to entry

References

  1. ↑ O'Sullivan, Arthur (2003). Economics: Principles in Action. Upper Saddle River, New Jersey: Pearson Prentice Hall. p. 186. ISBN 0-13-063085-3. https://archive.org/details/economicsprincip00osul. 
  2. ↑ SBA: Where to Obtain Business Licenses Accessed 1 April 2007.
  3. ↑ Washington, D.C. Department of Consumer and Regulatory Affairs - Licenses and Permits Accessed 1 April 2007.
  4. ↑ Washington, D.C. Department of Consumer and Regulatory Affairs - Basic Business License Information
  5. ↑ |30661|,.asp Washington, D.C. Health Professional Licensing Administration: Professional Licensing Boards[yes|permanent dead link|dead link}}]
  6. ↑ "California Department of Insurance Issues Cease And Desist Orders to 4 Companies". 2022-03-18. https://www.insurancejournal.com/news/west/2021/09/08/630679.htm. 
  7. ↑ Pennsylvania Online Business Registration Interview Accessed 1 April 2007.
  8. ↑ Pennsylvania - Forms for all Businesses Accessed 1 April 2007.
  9. ↑ "درگاه ملی مجوزها: مجوز ۲۵ کسب و کار صادر نمی‌شود" (in fa). https://www.irna.ir/news/85161632/%D8%AF%D8%B1%DA%AF%D8%A7%D9%87-%D9%85%D9%84%DB%8C-%D9%85%D8%AC%D9%88%D8%B2%D9%87%D8%A7-%D9%85%D8%AC%D9%88%D8%B2-%DB%B2%DB%B5-%DA%A9%D8%B3%D8%A8-%D9%88-%DA%A9%D8%A7%D8%B1-%D8%B5%D8%A7%D8%AF%D8%B1-%D9%86%D9%85%DB%8C-%D8%B4%D9%88%D8%AF. 
  10. ↑ "What are the primary elements on a Chinese company's business license?". https://knowaco.com/en/knowledge-center/post/What-are-the-primary-elements-on-a-Chinese-company's-business-license. 
  • How to Obtain a Business License - a wikiHow article on getting a business license.



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