Renewing a business license is just as important as obtaining an existing one. Renewal periods vary based on each license but typically range from one to three years.
Many state government departments don’t issue reminder notices about pending license expiration. As such, it’s important that you are diligent about properly renewing the license(s) or risk serious penalties.
How do I know if my business license is still valid?
You can check the status of your business license by phone or by visiting the state or local government website where the business is registered.
What are the penalties for operating with an expired business license?
Because government agencies are always looking for new revenue streams, business license violations are increasingly put under the microscope.
Penalties for operating with an expired license can include the following:
- Fines: Some states impose costly fines, interest, and even personal liens.
- Negative publicity: You may find that your business is publicly listed by the state as operating without a license.
- Business interruption: Agencies can require that expired license holders cease business until the license is reactivated.
Expired license holders can also attract media attention. In Georgia, a local TV station revealed a number of funeral homes that were operating with expired licenses. A local citizen was interviewed and stated that he would not trust a local business operating with an expired license. Besides bad press, these businesses faced a voluntary cease and desist order, a mandatory hearing before the Georgia licensing board, and multiple fines and fees.
What steps do I need to take to reactivate my license?
The process of reactivating a business license varies by state and depends on your circumstances. Here are some steps you may need to take:
- Reinstate your business: If your business has lost good standing with your domestic state or a foreign state and has been administratively dissolved, you may need to reinstate your business entity. Be sure to check with the Secretary of State to confirm that it was officially dissolved. If your business is still in good standing, the process of reinstating your entity registration will be easier.
- Check state tax accounts: Contact your state department of revenue to confirm that any business tax accounts for which you are liable are still valid and in good standing. If you’ve missed any tax filings, you will be required to bring your account into good standing.
- Check your EIN: Your EIN acts like a Social Security Number. It will forever be assigned to your business by the IRS. Even if your close your business account with the IRS, the EIN will still belong to the business entity. You should contact the IRS to see what steps you need to take regarding your EIN.
- Find out your renewal options: If you hold an expired license, find out what your options are from the issuing board. In some cases, there may be a window in which a renewal can be submitted late. In others, you could be subject to a penalty fee. Some licensing boards might cancel a license as soon as it has expired and require a reinstatement application to bring the license back to active status.
Get on top of entity compliance
Whether your business is large or small, getting your business licenses in order —and ensuring ongoing maintenance — is more important than ever. Regulations are constantly changing, and enforcement is on the rise. To lower the risk of falling out of compliance, create a compliance plan and develop a strategy to ensure your compliance portfolio offers long-term protection.
CT Corporation can help
CT Corporation offers a business license verification service to ensure that all your business licenses are active and in good standing. If we find one that is not active, we can complete the license application and make sure your business is legally compliant.
For more information on CT Corporation services and how we can streamline your business licensing, please contact us or call us at (844) 701-2064
