Many companies will need to obtain a specific business licence before they can start trading. In this blog, we will explain the purpose of a business licence, consider the types of business which may require one, and provide some examples.
A business licence is an official permit that must be obtained to carry out certain types of business activity. Some business licences can be registered in the name of a company, but others are issued to specific individuals working for a business.
Different types of business licences are required depending on the nature of business activities. We highlight a few of the more common business licences below, from premises licences to street trading licences.
If a business licence is required, operating without one can lead to hefty penalties and even criminal convictions. So it is vital to find out if your business needs a licence before you start trading.
A wide range of businesses require a business licence to operate legitimately.
The most common types of licenced businesses are those which provide a service for the general public in a physical space, such as pubs and entertainment venues. Many businesses will require multiple licences, depending on the services they provide.
To find out if your business needs a licence, check out the licence finder tool on GOV.UK.
The method of applying for a business licence will generally differ according to the particular local authority. To find out how to apply, check the relevant council website for instructions.
Aside from official checks and processes, there will usually be an associated fee that may have to be paid annually. This ranges from less than £100 to in excess of £1,000.
Under the Licensing Act 2003 , businesses that sell alcohol or provide licensable activities from a particular venue are required to obtain a premises licence from their local authority. This is one of the most common types of business licence.
A premises licence is required for any business which does any of the following from a specific venue:
A premises licence is still required if the activities are for charity. But there are some forms of entertainment which do not require a premises licence, including:
Any alcohol sales within licenced premises must be authorised by a member of staff who holds a personal licence to sell alcohol. This essentially means that any establishment selling alcohol from a particular venue must have at least two business licences: a premises licence and a personal licence.
Any licenced premises must appoint a Designated Premises Supervisor (DPS). The DPS must hold a personal licence to sell alcohol.
Most businesses that play music within their premises will require a form of business licence pertaining to music, known as TheMusicLicence. This covers businesses which:
TheMusicLicence is available from PPL PRS .
Any gambling venues are required to obtain several types of business licences. The first of these is a specific premises licence, which falls into five categories:
The premises licence for gambling businesses – which is separate from the other more general premises licence – can be obtained from the relevant local authority.
Additional licences may need to be obtained from the Gambling Commission , including:
To hold an event with any licensable activities on unlicensed premises, it may be necessary to obtain a business licence known as a Temporary Event Notice (TEN).
The types of licensable activities for which a TEN is required include:
A TEN may also be required for any licensable activity which is carried out on licenced premises but which exceeds the terms of the existing licence.
Anyone who wishes to run a market stall will need to obtain a street trading licence. This will normally be subject to various restrictions, such as hours and location of trade.
The fee for a street trading licence may vary depending upon the location within a city. There are generally two types of street trading licence: a temporary and permanent licence.
Another type of business licence related to street trading is a Pedlar’s Certificate, which allows someone to trade whilst on foot, e.g. selling their wares door to door.
Depending on the local authority, a Pedlar’s Certificate may allow someone to trade in the street without a stall. Unlike other types of business licences which generally need to be obtained from the relevant local council, a Pedlar’s Certificate is obtained from a local police station.
There are different types of business licences related to taxis and private hire services, which fall into the following categories:
Residential property businesses will often rent out at least one house in multiple occupation (HMO). A HMO is defined as a single property that is rented out by at least three different people who are not from the same household. It includes at least some shared facilities such as a bathroom or kitchen.
A HMO licence is required in England and Wales in respect of any large HMOs. A property is defined as a large HMO if all of the following apply:
Any skips, hippo bags and other skip bags which are placed on public land need a specific business licence from the local council, known as a skip permit. Skip hire companies are generally responsible for obtaining these permits.
A scaffolding or hoarding licence is needed to erect any scaffolding or hoardings on, or next to, a highway. The cost of this business licence will generally depend on the length of time the scaffolding or hoarding is required.