Every year like clockwork in January, I receive a mailing from the county commissioner of revenue to renew my business license. I simply list my gross receipts, pay the total amount due to the county treasurer and wait for my business license to arrive in the mail.
Before the deadline occurs, I receive several, reminder voice messages on my smartphone to renew my business license. Since I’m a sole proprietor and don’t use a business name, I’m not required to register my small business with the Secretary of State.
Each state has different requirements; therefore, this article provides general guidelines on maintaining your business licenses and registrations. Bear in mind, each business owner is responsible to stay on top of due dates and regulations. It’s not your county or state’s fault if you fail to make payments.
Why Do You Need to Keep Your Business Licenses and Registration Up-To-Date With the Secretary of State?
Can you imagine local authorities visiting your business and closing it down because you failed to comply with local and state regulations? It shouldn’t be a surprise if you disregard letters, emails, and phone calls asking you to take care of these renewals.
These common consequences are real possibilities when you fail to renew business licenses and business registrations:
- Fines and penalties. Depending on the circumstances, the amounts could be hefty, much more than the cost of a business license or business registration.
- Possible lawsuits from customers citing fraudulent activity due to not having a business license.
- Business closure for non-compliance to regulations. Prior to this, you would have received numerous communications from government authorities.
- Lost opportunities to bid on jobs since a business license and/or state registration may be required.
- Inability to launch a new product or service due to jurisdiction requirements relating to licensing and registration.
- Bad press causes a loss of reputation. The public, vendors, customers, and other businesses find out quickly when you don’t operate your business legally.
- Potential arrests. In some industries such as medicine or law, individuals operating illegally can be arrested.
The above outcomes are entirely possible; however, they won’t be issues for your business when you comply with local and state requirements.
How Can You Renew Your Business Licenses and Business Registration?
Before you opened your business’s doors, you chose a business structure and completed many other tasks. Depending on the type of business you own, you may have registered your business name and set up an account with your state’s division of taxation. After that, everything was in place to get a business license. Once issued, you must renew your license and State registration based on their specific requirements.
These general recommendations will help you stay compliant with your local and state authorities.
- When getting business licenses and business registrations for the first time, research your county, city and state regulations to determine what permits and licenses you need. In most instances, industry requirements, business activities, and location can vary by state. At the same time, make a note of the licensing fees you’re required to pay.
- So you renew your licenses on time, keep track of due dates by putting them on a physical or digital calendar or use a business app. Set up email or calendar alerts for 60 days, 30 days, and 2 weeks prior to deadlines to ensure you renew your business licenses and Secretary of State registrations. At the 60-day alert, make sure you have the necessary paperwork to file renewals. If you don’t, contact local and state authorities to request the necessary information so you can make timely renewal submissions. After two weeks, follow up on progress.
- Enter business licenses and Secretary of State business registration renewals as accounts payable entries in your accounting system (it’s another reminder that you need to pay them). Set them up as payables two weeks before the actual due dates. Better yet, there’s no reason you can’t remit these payment renewals as soon as you receive and complete paperwork instead of waiting for them to become due.
- Once you make the payments, verify that local and state authorities send you copies of business licenses and Secretary of State registrations. Use a reminder app or another tickler system so you don’t forget to follow up. Moreover, most states have an online system where you can verify the current standing of your business registration.
Additional Benefits of Keeping Your Records in Order
Displaying a business license in your brick and mortar store and company website indicates to the buying public that you’re a serious contender in the marketplace. Doing so reassures customers that your company is legitimate and not a scam. Besides, government officials are equally keen on protecting the public. Keeping your business licenses and Secretary of State registrations up-to-date legitimizes and safeguards your business.
Then too, if you apply for a loan with Camino Financial for the first time or plan to renew your loan, we will need a current copy of your business license and state registration. Without these documents, we won’t be able to move forward to provide financing for your business.
Just so you know, Camino Financial doesn’t require collateral, a social security number, or credit history to approve a small business loan. We offer attractive terms like these because many borrowers have just moved to the US and don’t have financial records available to review. Once you’re approved for a loan, you’ll be in a position to renew your loan and qualify for a second loan at a better rate when you make timely payments for nine months.
In the meantime, before you renew a loan or get financing for the first time with us, we invite you to explore our library of financial information to help you manage your business.