License Compliance is Essential to Business Success.
Posted by Michelle Grenier on Tue, Jun 29, 2010 @ 10:00 AM
All businesses must comply with applicable licensing and permitting requirements. Failure to comply can result in significant consequences. New businesses learn quickly that compliance and dealing with governmental bodies, is not always straight-forward, and it can be extremely frustrating and time-consuming.
There are the laws, regulations, and processes that need to be dealt with, on the local city or town level and on the federal level. Licensing and permitting procedures range from an Internet filing to a full paper application with accompanying documentation and payment or the requirement that payments be made via Internet.
Subsequent filings are typically required for changes in ownership, entity structure and entity name. Some regulations required new licenses in the event of changes in control and/or ownership of the licensing or permitted entity.
Summary of Business Licensing and Permitting Goals:
- Compliance with applicable regulations and laws;
- Penalty and Fine Avoidance;
- Maintain proper records for future business expansion.
Benefits of Compliance include the following:
- Maintaining goodwill and reputation;
- Protecting the directors or managers of the entity;
- Reducing the risk of related legal issues;
- Maintaining attractive operations management for future partners and/or investors; and
- Reducing cost of compliance by avoiding penalties and fees.
There is one thing you can count on with business laws and regulations, and that is change. They are always changing and being revised. It is important that businesses keep up-to-date with regard to those changes.
Some businesses underestimate the consequences that can result from failure to comply with licensing and permitting requirements. For obvious reasons, failure to comply puts business investment at significant risk. In addition to penalties in fines on business and personal lien, such failure to comply can result in an operational shutdown.
Operational shutdowns, even temporarily, can result in overall business failure, as customers loyalty may switch to other providers if they cannot receive the goods or services when they want them. Other risks include, but are not limited to, mandated court appearances, harm to goodwill and reputation through negative publicity, investor deterrence.
Generally there are many types of licenses and permits. Payroll Withholding, Sales Tax and Workers' Compensation types are required of every business, unless exempt. Transportation, alcoholic beverages, food, catering, construction, cosmetic, massage and other licenses, may be required for certain business activities.
Each jurisdiction imposes its own rules and regulations. Thus, it is important to know what is required in your particular jurisdiction.
Want to discuss you licensing issues with an experienced Business Lawyer?
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