CORPORATE TRANSACTIONS & COMPLIANCE BLOG

The Joys of Managing Your Own Business Licenses

By: Teri Mayor, COGENCY GLOBAL INC. on Tue, Nov 22, 2016
Businesses face a lot of regulations, many of them on the state and local level. After determining exactly what licenses might be required when starting business in a new location, a business will need to file the initial applications and registrations and then manage the renewal dates. Is this something you should handle yourself, or would it be better to outsource? Here are some considerations…

The Benefits of Managing Your Own Licenses:

  • You get to practice your keyboarding and penmanship skills! Spend time inputting the same information (company name, EIN number, address, ownership info, etc., etc. ) into dozens of different forms, then cut checks, address envelopes and send them out to all the different licensing jurisdictions. Just think of the fun you’ll have!
  • If you don’t want to spend time doing the important tasks required to keep a healthy bottom line for your business, managing licenses is a great way to fritter the hours away, while still feeling like you’re doing something important. After all, non-compliance can cost your business quite a bit, not only in potential fines, but in the possibility of losing an important contract, or even the ability to do business at all for a period of time.
  • Travel and see the world (or at least several local government offices). In some cases, a simple business registration can mean hours of time and in-person visits to get the job done. This Slate article by Matthew Iglesias is a great example of the fun that you, too, can experience if you, for example, try to obtain a D.C. business license on your own.
  • Is your calendar looking empty, making you feel lonely and unneeded? Fill it up with license renewal reminders the whole year round. Your inbox will overflow with notifications of administrative tasks you have to take care of right away, which will be especially appreciated during common renewal times, such as near the end of your fiscal year, tax season and whenever you have lots of other things to track and manage.
  • Need some excitement in your life? Nothing adds drama to your business day like finding out you missed an important renewal and now face the above mentioned penalties, fines and the inability to continue doing business until the situation is addressed.

To be serious, there are a few reasons a business may want to manage their licenses in house:

  • License applications often require a good deal of personal information on the owners, directors and officers of the business. Outsourcing requires that you share that information not only with the licensing authority, but with a third party.

If that is a key sticking point when considering outsourcing, ask about the storage and transmission of such information. A good service provider will have procedures in place to protect this personal information.

  • Some businesses may have a very large portfolio of complex licenses that are crucial to their business model and want to maintain full control. In such a case, a department that is solely focused on maintaining the company’s licenses could be the best choice for that business. This is especially true if responsibility is shared by more than one person, so that the company does not find itself in a situation where the only person who knew what to do and when to do it is no longer with the company.

The Benefits of Outsourcing:

In a great many situations, outsourcing the filing and management of business license applications and renewals to a professional makes a lot of sense.  Here are some advantages of doing so:

  • Experience: Because a company that specializes in license filings handles them on a daily basis, they will have more knowledge about common pitfalls and requirements, avoiding rejected applications and saving valuable time.
  • Time: For a lean company with a business to run, outsourcing license filing and management is a gift of hours of time to focus on the activities that are most important to the business, what needs to be done to achieve success.
  • Cost Savings: While outsourcing isn’t free, it usually costs less than the business cost of maintaining the staff needed to manage the task.
  • Continuity: When you outsource licensing tasks to a knowledgeable, experienced company, you don’t need to worry about who will handle important licensing tasks if a key employee leaves, or takes a leave of absence or  long vacation.  The risk of missing an important deadline in these situations is pretty much eliminated.
  • Access: Companies that offer these services, usually have an online storage system where the license portfolio is kept, meaning license certificates and information are at available to those who need them 24/7.

Is outsourcing the answer for every business? No.  Small businesses with only a few licenses to manage may feel it’s not that difficult to maintain their current portfolio and so not worth the cost.  Larger businesses may feel it’s important to keep the licensing tasks in house in order maintain better control.  But for many businesses, outsourcing license filings and renewals is a good way to save time and money and to gain peace of mind.

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This article is provided for informational purposes only and should not be considered, or relied upon, as legal advice.

Topics: Business Licensing