Business License

Business license is a document issued by a government agency of a country, granting permission to carry on business in that country. Business license may be issued in the name of an individual or in the name of the company. In a single jurisdiction itself, a business needs various types of licenses from various governmental agencies. The types of licenses, procedures and conditions of issue differ between the various countries, states and jurisdictions.

Advantages of business license

There are many benefits in licensing and controlling business activities. Some of them are:

  • A business license gives credibility and authenticity to the business in the eyes of the public. Thus, business license helps the business to gain popularity.
  • Business license helps the government authorities to have a control on the business and it's activities.
  • Business license is easy to collect taxes and claim tax-relief.
  • Business license helps to ensure that the business does not engage in polluting or disrupting our ecology.
  • Business license helps in calculating the contribution of the business to our economy.

Disadvantages of business license

Though business licenses seem to appear beneficial to our society, there are also various disadvantages attached to it. Some of them are:

  • There are umpteen numbers of formalities to be fulfilled before getting a business license, which is an irritating task for the entrepreneur.
  • A huge amount of paperwork is also involved in the business license, which is a cumbersome task.
  • Many international businesses will be averse to start a new business in a country having stringent rules.
  • Various costs and fees are to be expended before a business license can be obtained. This will be a further burden to a new business.

Procedural aspects

The procedure for obtaining a business license differs from country to country, from business to business and also from a jurisdiction to another. Some jurisdictions may insist on only direct registration while some jurisdictions may give the option of online registration to small businesses. There are various organizations that help new entrepreneurs in the procedures and paperwork involved in obtaining a business license. These agencies charge a small fee for their services.

Some governments opt for 'Liberalization of the economy'. Such countries are very lenient towards business licenses. They do so because they want to promote local and international businesses in their country.

Some of the information required

The information that has to be provided before obtaining a business license differs between the various governmental agencies. Some of the most common data requested are:

  • Personal details like your name, social security number and driver's license.
  • Name of the business
  • Partners in the business
  • Residential address of the entrepreneur(s)
  • Business address
  • Phone numbers, fax, e-mail of the owner(s) and the business
  • Website address, if any, for the business

Conclusion - Case-study on business license

In a small locality in Pennsylvania, Mr. Peter started a manufacturing business, after obtaining the necessary licenses. Very soon, Peter's factory started emitting foul harmful smoke into the otherwise clean atmosphere. When the people of the area protested, Peter did not take them seriously. He did nothing to make the situation better. So, the people complained about the issue to the Department of Health. Immediately, they revoked the business license granted to Peter. Peter was taught a lesson. He had to cease all his activities and mend his ways, if he wants to carry on business hereafter.