To maintain the good standing of your business, it’s critical that you keep up with licensing requirements — or risk penalties, fines, or a revoked license.
In most cases, a business or individual with a revoked or suspended license is not allowed to operate until the license has been reinstated.
In this article, we explain what you must do to keep up with licensing requirements and what can happen if your business license is revoked or suspended.
A business license can be revoked or suspended for several reasons, including:
In several states, a business or professional license can also be revoked for failure to pay child support.
Heavily regulated industries have more rigorous licensing requirements. For example, states may require contractors and construction companies to report certain events or information (such as changes in business structure, personnel, bonds, and insurance) or face an automatic license suspension. A license could also be suspended if a qualifying individual for the business (if required by the state for that industry) leaves and is not replaced within a designated time frame. In some cases, the license may be revoked for one to five years, and the business can incur fines amounting to a percentage of the total contract value.
Marijuana businesses are also closely regulated. These businesses must meet numerous state and local requirements to maintain a marijuana license once that license has been approved, including original eligibility requirements, product testing, compliance reporting, and ensuring the business is operational by a certain time. In South Lake Tahoe, California, a marijuana dispensary’s cannabis and business licenses were revoked for failing to open on time! In Missouri, state cannabis regulators revoked a number of cannabis business licenses for failure to meet social-equity eligibility criteria.
If you operate without the required business licenses, you can face several penalties, including:
A revoked business license can also impact client relationships and future business opportunities. For example, contractors with a revoked or suspended license may fall into breach of contract. Contracts with general contractors often stipulate that the contractor maintain compliance with all laws. If a license is suspended it can create challenges with clients as well as with the state contractors’ board.
Your ability to have a revoked or suspended business license reinstated depends on the type of license, the violation, the licensing authority, and the jurisdiction in which you operate.
Depending on the state or municipality, you may be able to appeal the revoked or suspended license. But there are no guarantees, and the window for doing so is often limited.
In some instances, a business license can be reinstated after you take steps to correct violations and pay the imposed fees.
If a professional license or another type of license (separate from a general business license) is revoked, you may need to reapply and provide evidence that you have complied with the terms and conditions of the revocation, paid all penalties, and resolved any civil judgments and/or outstanding liabilities.
Outsourcing business registration and license research, applications, management, and renewals can help take the pressure off internal resources. By working with a full-service management provider who specializes in the efficient processing of business licenses, permits, and registrations, you can free up your time to focus on starting and growing your business while ensuring you keep up with changing compliance requirements.
For more information on CT Corporation services and how we can streamline your business licensing, contact a CT Corporation business license specialist.
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