The Legal Importance of Business Licensing

Depending on the type of law you practice, you may need to help your client with some kind of license. Proper licensing can save your client from a world of trouble in many different situations. Some people, though, don’t truly grasp the importance of having proper certification. With the rise of start-ups and home businesses, there are many ways that business owners may be working in a legal grey area. Operating a business without proper licensing could lead to legal trouble for your client.

So how do you help with proper documentation and help your client understand the legal necessity? Here are some important points and how you can help.

Acquiring the Right Documentation

Truthfully, this differs depending on the industry. As the legal adviser to a company or individual, you need to be aware of all the rules and type of licenses, so you can better help your client.

For instance, for many construction projects, your client may need a contractor’s license. The need for one varies by state and the size of the project. Even when working on their own home, they may need one. The process starts by submitting your application, but that isn’t the endpoint. A contractor may need to take some courses and possibly the NASCLA exam. As a legal adviser, you can help determine the type of permit your client needs or whether they need one at all.

Other common licenses in the commercial sectors include a handyman certification, or licenses for businesses, stylists, plumbing, and more. Helping your clients understand if they need one and how they can get one is a necessity. Your job is to help clients stay on the right side of the law and ensure their legal safety.

Establishing an LLC

For some states, it is illegal to operate a business without a business license. Licenses such as the Limited Liability Company (LLC) are not a requirement to run a business in all states. However, they may be necessary for the company to register as an LLC with the state.

As a legal consultant, you’ll need to understand the particulars of business law in your state and, in some cases, your city. From there, you’ll need to work with the client to ensure they have filled out and submitted the necessary paperwork. This includes filing for an Employer Identification Number, filing for a DBA, applying for a seller’s permit, opening a business bank account, and insuring the business.

Why a License Matters

As a lawyer, you need to help your client understand the consequences of not complying with the law in regards to permits. You also need to know how your client’s business operates like the back of your hand.

For example, your client may own a business. For business owners, not having the correct permits is against the law. Penalties can range from anything to fees (plus interest), suspension of business pending the acquisition of documents, or closure of business for failure to comply. Businesses could even be at risk for lawsuits.

The penalties for operating without the right permits can range from a warning to jail. It all depends on the situation and what type of certification should have been used. Help your client research whether what they want to do requires permission from the government, and if it does, where to get it. Provide legal advice and understanding of the process, and you will be fulfilling your legal duty.


Licensing is a necessity in many states. It’s imperative that you and your client know what is needed for their company to operate within legal boundaries. Assisting them in staying on the right side of the legal system is the most basic requirement of an attorney. Help them get what they need, and they will help you, in return.

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