There is a whole range of businesses that require the owner to buy a licence, ranging from childminding businesses, taxi companies, restaurants, hairdressers and hotels, to name a few. Your business may also require a more specific licence, for example, you need a licence to sell alcohol. 

Protection for you

Ensuring your company is properly licensed helps to bring protection to yourself, your employees and your customers. Having the correct licence will ensure your personal assets are protected in case of a lawsuit as well as providing protection for you if your business is damaged. This works the other way around too as if you are personally liable for injuring another, your businesses finances will not be available in the settlement. A licensed business is completely separate from yourself, meaning your company’s taxes aren’t filed with your own. This makes it far easier to report income as well as businesses losses.

Protection for your employees and customers

A licence will also ensure your employees are protected if they are injured as well as protecting your customers. If you sell food or sell a product that touches the human body, for example, if you own nail salon, you will be required to have a specific licence as well as be required to pass an annual inspection. This protects both you and your customers in case any incidents occur.

Privacy

If you obtain a licence for your business, you are ensuring that your personal information remains private. This includes everything from your address to your finances as they will not be associated with the business and will almost guarantee you retain a level of personal privacy.

Trust

Customers will more readily trust a company this is licensed, even if your specific company isn’t required to obtain one. You may not require a licence to play music in certain areas or to sell food on the street, but obtaining one brings security. A licence proves your company is trustworthy and stable and that you are dedicated to your company’s success.

Good for the economy

With so many new businesses appearing every day, ensuring your businesses is registered and licensed helps to formalise the economy. It ensures the businesses sector is thriving, as well as strong and protected. Small businesses can also only gain funding or protection by the law once they are registered and licensed.

Source: https://bmmagazine.co.uk/in-business/advice/importance-business-registration-licensing retrieved February 14, 2021

Image source: https://www.makemyassignments.com/blog/how-to-score-well-in-business-law-assignments/ retrieved February 14, 2021