Which licenses a business may need
Licensing compliance starts with an inventory of activities rather than a guess about industry. In New York, the State Liquor Authority licenses alcohol sales, the Department of State licenses several trades and occupations, and the state tax department issues the certificate of authority a business generally needs before making taxable sales. In New York City, the Department of Consumer and Worker Protection licenses many kinds of businesses, including home improvement contractors and secondhand dealers, while other city agencies handle building, health, and fire permits. Federal permits apply to some activities as well. Expanding into a new service, location, or product line can bring a new licensing requirement.
What lapses can cost
Operating without a required license can lead to fines, closure orders, and seized goods, but the less obvious costs are often larger. In some industries, an unlicensed business may lose the ability to collect payment in court for work it performed, and home improvement in New York is a well-known example. Lapses can also put insurance coverage, government contracts, and lender covenants at risk. Renewal notices often go to whoever was listed on the original application, so turnover is a common cause of lapses. A change of ownership, a new address, or a new principal may require advance notice or approval, and some licenses cannot be transferred at all.
Keeping it under control
A simple register of every license, its issuing agency, its expiration, the responsible person, and any conditions attached usually prevents most problems. Keep copies of applications, because later renewals and inspections are measured against what was stated in them. If you discover a lapse or a missing license, get advice on how to correct it promptly, since the order of steps can affect penalties. When a business is being bought, sold, or reorganized, we review the licensing picture early so that approvals are sought on a timeline that matches the deal.
