Yes, any business operating in the United States without a license, or with an expired license, may be subject to penalties, such as harsh fines and/or cease – and – desist orders. Some agencies will permanently revoke a license for egregious behaviour. Other agencies will force businesses to return all profits that were collected during the unlicensed period.

What is a Business License?

Business licenses are commonly referred to as government’s permission to legally conduct business on a local, state or federal level. The type of licensing depends on the nature of the business entity that applies for it and the location it is going to operate in. However, state regulatory agencies take great steps to identify and penalize unlicensed business operations.

How Much Are You Charged for Late Renewal?

The amount due depends on many factors, including the location of the business. For instance, the late – payment penalty for business license renewal in Seattle is $20 while the same demerit in Atlanta will run you a hefty $500. Although some jurisdictions will charge a flat – rate penalty for operating without a valid license, others may calculate it based on the revenue of your business.

Note that some licenses have ongoing requirements that are expected to be met to keep the license active and in good standing. The most common requirement is a renewal of the license which may be due annually or every set number of years, depending on the license. In the United States, a license renewal can be as simple as paying an annual fee, or as complex as submitting detailed financial information, bonds, or paperwork.

Note that when a renewal is late, it can result in penalty fees or worse. In some cases, if a filing is even ONE DAY late, the license is considered expired and the business must halt operations. Also note that businesses may be required to go through the initial application process again to get back in good standing. Late or missed filings can cause serious interruptions in business, late fees and other penalties.

Staying in compliance requires that you pay attention to two factors: renewal requirements and changed information related to your business. It is always advisable you set up a tickler system that reminds you of a pending renewal well in advance of the deadline. (If you are a snooze alarm type of person, set several reminders.)

You can also add “update business licenses” to your to – do list when you make any change regarding your entity or your business operations. For instance, if you change your business name, or incorporate your sole proprietorship, you will need to update your licenses accordingly.

Have it in mind that any changes in key positions in your business (such as an officer or qualifying individual) may also trigger the need for an update or even new licensure. If you expand your business—whether it is by remodelling your building, opening a second location or even launching a new product or service line, you must check to ensure you have the necessary licenses.

Aside from the financial penalties, running a business without complying with all necessary business licensure requirements can also incur legal troubles such as lawsuits or even arrest. These penalties may also affect the trust and confidence customers and vendors have for your business.

These customers and vendors who interact with your business expect your company to operate legally. If word gets out that you’ve been providing services with inadequate or expired qualifications or permits, your business partners may want to take legal action for damages or lost reputation.

Important Information about Renewing a Business License in the United States

At the most basic level, business licenses help the government keep tabs on registered companies and protect the wellbeing of the public. Therefore, a licensed company can be easily monitored for compliance with health and safety regulations, and held accountable if they are breached. So it is imperative that your business acquire all necessary permits and that they all stay current.

Also, if any information has changed since the initial time you got the permit, have that updated as soon as possible. Always have it in mind that these few hours can save time and trouble down the line. Additionally, when it is time to obtain or renew a business license, it is advisable you talk or contact more than one state or government agency. You may also be expected to file for permits and/or renewals in several locations.

Most times a business may require semi – annual, annual, or bi – annual license renewals. If the license expires, it may be necessary to re – apply. Failing to do so may incur fines. Here are crucial information about business licenses to keep in mind in the United States.

1. State License Requirements

In the United States, some states only require a one – time application for a business license. The license will remain active until the owner closes the business. It does not have to be renewed, so it cannot expire. However, this sort of license may only require the business owner to file sales tax reports or other documents on a regular basis.

Any delay in filing reports can result in the business incurring additional penalties, interest, and fees. The state still reserves the right to prosecute business owners if they avoid payments or do not cooperate.

2. Local Business License Requirements

A city or county may mandate business owners to apply for permits and register with the state. Note that this permitting process is put in place as a tracking system for zoning requirements and ensures that the businesses in the area are operating legally according to city codes and laws.

3. Expired Local Business Licenses

There are some areas or locations where the local government sends its business owners a reminder statement annually, letting them know that their registration is due for renewal. When handled properly, the business owner will either return the statement or go in person and pay the renewal fees for the business license for another year.

After ensuring all processes, the business owner will receive a license permit to post in their place of business. Statements for fees that remain unpaid may be sent to the business owner every 30 days. Also know that additional interest or fees are added to the amount owed. If not paid, the business is not in compliance by paying the renewal fee and in violation of local law. This can result in the business owner being taken to court.

4. Expired Professional Licenses

A professional license may not be referred to as a business license in the United States, but it may be required for an owner to operate certain business types. This can include businesses in trades such as real estate, cosmetology, and law.

Note that a professional license requires that the applicant take and pass an exam to prove they have completed the appropriate educational requirements. Professional licenses are managed by the state. However, a professional is expected to renew their state license on an annual basis, pay the renewal fee, and provide proof of completing continuing education requirements.

Have it in mind that when a professional license expires, the person who holds the license may be mandated to retake the state examination and pay late – fees before the license will be renewed. Typically, any individual practicing without a valid professional license is doing so illegally. This can result in being prosecuted by the state.


Not renewing your business license can result in hefty fines and penalties. In some cases, a violation carries criminal penalties, which can include the owner as well as the business. Government agencies have the right to shut down a business and seize its assets for failure to comply.

Therefore, take the time to make sure you have obtained all the necessary permits; they are all still current, and the information submitted is still accurate. Investing a few hours now may save you a great deal of time and trouble later.