What is a Business Licence and Who Needs One?

Starting a new business comes with lots of obligations that must be fulfilled before business operations. One of such is obtaining a business licence. While some businesses require a business licence, others do not. So, you would want to find out if your business needs a licence and the specific ones it needs.

Getting a licence helps ensure that your business stays in compliance with the regulations of your local authority and the industry in which you operate. Moreover, it shows to your customers and the public that your business is legit and credible.

Not every business within the UK needs a licence. However, you need to be sure and be mindful so you don't miss out on getting the necessary licence. It is therefore important to understand who and which type of business needs a licence, why it is crucial to obtain one when needed, and how to go about applying for it. So, let's explore.

What is a Business Licence?

A business licence is a legal document obtained from a government agency or a local authority in order to allow permission to operate and begin a business activity in a given jurisdiction or area. It is a kind of permission given to certain types of businesses for them to carry out business operations legally.

Obtaining a business licence helps ensure that your business complies with the regulations of the authority and it means your business is also aware of the protection of human health and safety, and keeping it intact. Failure to obtain a business licence comes with a penalty, as such, every business owner must know the licences that are required and get it.

While some business licences are required to be obtained for the business itself, others are required to be obtained by the individual who is in charge of carrying out the business operations.

The type of business licence you will obtain will depend greatly on the nature of your business, the industry your business operates in, your business location, and lots more. Several types of businesses need different types of licences. In the later part of this article, you will get to understand who needs a business licence.

How to Apply for a Business Licence

Obtaining a business licence involves some processes and steps.  Although these processes could vary depending on the type of licence you are obtaining. However, the below steps would be needed by all businesses regardless of the type you want to get.

1. Research the type of license you need

The first step would be to find out which specific business licence you would need based on the nature of your business. For example, if you will be operating a business that serves alcohol in the UK, you would need to obtain a premises licence and probably a personal licence for those in charge of serving the alcohol.

So it's important to understand the type of licence you will need before any other thing. The UK Government has a licence finder tool that you can use for this research.

2. Find out the Licencing body in charge

Once you've recognized the licences you will need, it is important to find out the authorities in charge of issuing the licences. In most cases, the location of your business will determine the authorizing body as you are expected to get the licence within your business jurisdiction. You can also use the UK government licence finder tool to do this research.

3. Familiarize yourself with the Licensing Requirements.

Different licencing bodies have their own unique licensing requirements. You should understand this before beginning your application. If your business deals with food, alcohol, or childcaring, health and safety requirements are key and you must ensure you meet up with these standards before beginning your application.

4. Prepare for and make your Applications

At this stage, you would need to gather all the important documents and start your application. You would be required to fill and submit some forms as required by the licencing body. You must provide accurate and detailed information so there won't be a delay when your application is reviewed.

You might need to provide documents to prove your identity, explain your business operations, and so on. You might also be required to provide documents like a professional qualification, business plan, health and safety assessment documents, and so on.

5. Prepare for Inspections if necessary

If you are obtaining certain types of licences like premises licences, you might go through some inspections to ensure that your business is ready to comply with the set-out regulations.

6. Pay the Application fee

You would be required to pay a fee to obtain a licence. The amount to be paid will greatly depend on the type of licence you are obtaining and the authorizing body issuing the licence. You should prepare for this in your business plan and budget and be ready to make the payment.

7. Wait for Approval

Once you've submitted the application and paid the fee, you should await a decision from the authority. Some licencing bodies issue the licence fast enough while some go through a more thorough review process. As such you need to begin your application process early to allow enough time for the waiting period.

You'll be notified after the review if the application is approved. However, if the application is rejected, you can always appeal the decision. You will find how to go about this in the rejection notification received.

Who Needs a Business Licence

Several types of businesses and individuals need one or more licences to carry out operations within the UK. The specific type of licence you will need for your business or personally as an individual depends on your business activities.

You should know that your business might need more than one or just one. That being said, now we will look at the category of business and business activities that need a licence within the UK.

Premise licence

Premise licences are required if your business provides some kind of service from a particular venue. If your business sells alcohol and involves theatre, dancing, music, entertainment, boxing, or film play from a specific venue, then you need a premise licence.

Even if the activities done in the venue are for charity, a premise licence is still required. There could be some exemptions in some cases when your business is showing educational or promotional films or films shown as part of an exhibition in a gallery.

Street Trading Licence

If your business involves trading in some public areas like a street, then you will need to get a street trading licence. This licence will give you the freedom to trade in public space.

You can get a temporary or permanent street trading licence depending on your needs. However, you'll need to contact your local authority to be sure of the requirements and limitations to how you could operate.

Personal licence for the sale of alcohol

If your business serves people alcoholic drinks, then this type of licence is needed. Whether you own a bar, restaurant, or cafeteria, so far you serve alcohol to the customer, you will need a personal licence for the sale of alcohol. This licence must be particularly obtained by the employee serving the alcohol

Music licence

A music licence is needed if your business plays or uses music as part of its business activities. If you are into theatre and entertainment, stage live music events, etc, you will need this. Even if your business operates from an office, church, salon, cafe, store, etc, you will need a music licence as much as you use some forms of sound recording as part of the business activities.

The price for a music license generally varies depending on your business location and your use of music.

Gambling licence

For gambling activities, a unique premise licence needs to be obtained. This is different from the general premises licence and it includes casino, betting, bingo premise licences, and so on. Apart from that, you would need to obtain an operating licence and a personal management licence from the gambling commission.

Temporary Event Notice

If you intend to carry out business activities in a particular unlicensed premises, then you need a temporary event notice. You could obtain this type of licence to sell alcohol and provide entertainment within a particular location.

Taxi and Personal Hire Licence

If your business involves using a taxi or personal hire car or vehicle, then you need this licence. To drive a taxi or render personal car hire services, you would need a separate licences for both. Apart from that you would obtain a licence for the vehicles used.

Food Licence

A food licence is also needed if your business operations deal with food. This involves cooking, selling, storing, distributing food, etc. You would need to make the necessary registrations with your local authority. You'll also need a premise licence for the venue in which you operate.

Child Caring Licence

To provide a childcare service within the UK, you will need to obtain licences from the government. Whether you will be caring for the children in your home or somewhere else, the premises you will use for this service will be inspected.

Waste Carrier Licence

You will also need a licence if your business deals with waste. If you buy, sell, or dispose of waste, you will need a licence to provide this service. Failure to obtain this licence before operating could lead to a serious fine. You can get this licence by registering through the government website.

Tips to Ensure a Smooth Licencing Process

1. Begin the licencing process on time before your business activities start. This will allow you to obtain your licence right on time even if the licencing review process takes longer than expected.
2. Be sure to consult your local authorities if you need guidance. Do not hesitate to ask questions if need be.
3. Ensure that you meet all the requirements and industry standards before beginning your application.
4. Provide accurate documentation and be sure to provide all the necessary information as needed.
5. Keep the records of your licence intact and safe always. Do not forget to renew your licence once needed.

Why Do I Need a Business Licence

Obtaining a business licence before commencing your business operations is crucial. Here is the importance of obtaining one.

1. Protect the customers and public

The public in general is the recipient of the products or services that your business offers. As such their safety must be ensured at all times. Licences therefore serve to promote the interest of the public by ensuring that your business operations don't tamper with the safety and protection of your customers and the public in general.

2. Ensures you're Operating within a legal framework

Business licences are there to ensure that you are operating your business within legal standards. Obtaining these licences helps you to be in compliance with the regulations thereby preventing you from fines and penalties.

3. Provide access to resources

Through some specific types of licences, you could be provided some training and resources within your industry. Through this training, you can potentially connect and network with other businesses in your field. If your business is new, this could be a great way to meet valuable individuals within your industry.

4. Helps build trust

Customers trust you and your business more when they know your business is licenced. It helps build confidence and shows you are legit and professional. As such your business could easily attract more clients, suppliers, partners, and investors who will be willing to go into an agreement with you.

5. Boost the economy

With so many businesses out there today, obtaining the needed licences means you are operating formally. With this, it is easier to recognize which business within the economy is doing well and which needs support from the government and other agencies.

How Much Does a Business Licence Cost?

The cost of a business licence depends on a variety of factors. Thus we can't ascertain the exact amount you will need to obtain a licence.

If your business is within the UK, then you would consider the specific local authority you are obtaining the licence from. Moreover, the industry your business will be operating in also has a say here.

While some businesses could need only one licence, others might need up to two or more types of licenses to operate legally. Generally, you would need the application fees, so it's crucial you include this in your business budget.

Conclusion

Getting the required business licences before beginning your business operations helps you stay in compliance. While we've covered several types of business operations that need licences within the UK, it is important that you find out the specific type of licences that your business needs. So you can always refer to the UK Government licence finder tool to understand the licences that are required. Do you have any questions about business licence? Incorpuk has the answers to your questions. Kindly contact one of our experts for help today