What Licences Do I Need to Operate My Business?

In Short

• Many businesses require specific licences, registrations, or permits to operate.

• Operating without the necessary licences can result in legal breaches, fines, or even criminal charges.

• Sectors such as food, alcohol, and gambling have stricter regulations and require specialised licences.

Tips for Businesses

Ensure you research and understand the licences, registrations, or permits needed for your business activities. Seeking legal advice early can help navigate complex regulations, prevent costly penalties, and ensure smooth operations. Regularly review your licences to ensure they remain valid and up-to-date throughout your business’s lifecycle.

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Table of Contents

• Key Considerations for Startups
• Determining Whether Your Business Requires a Licence
• Highly Regulated Sectors
• Types of Licences and Permits
• Why Securing the Correct Licences Is Key
• Key Takeaways
• Frequently Asked Questions

Starting a new business can offer you many exciting opportunities for innovation and growth. However, this venture also entails a wide range of legal and regulatory obligations that you must carefully consider from the outset to avoid risks and penalties. In particular, certain trading activities will require official permission in the form of a licence, registration or permit before your business can legally carry them out. A business licence generally operates as formal authorisation from a relevant public or regulatory body (thereby giving your business the right to carry out a specific type of activity). Trading without the required licences or permits can expose your business to legal breaches, enforcement action and, in some cases, criminal offences.

It is therefore critical for your business to identify which licences, registrations, or permits apply to its activities and to ensure you obtain, maintain, and renew them throughout the business lifecycle. There are several types of licences in the UK, and the type your business may need will heavily depend on its activities and aims. This article provides a high-level introduction to key legal issues for startup businesses to consider, the need for business licences in various scenarios and how legal advice can help your business understand and obtain any required licences correctly and mitigate risk.

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Key Considerations for Startups

Many startups might underestimate the vast extent of their legal and regulatory obligations. Licensing is one element of a broader range of rules that may apply, alongside the need to comply with several requirements under employment rules, data protection, company law, and other regulatory requirements. A failure to comply with legal obligations can lead to enforcement action, reputational damage, and financial repercussions, such as fines, which can be particularly damaging for a new business.

Assessing your legal and regulatory position before trading begins is vital. Licensing is one key issue to consider and needs careful thought, as licensing rules can vary depending on your intended business activities and by location. A practical first step is to check the Government’s find a licence service, which provides an overview of what approvals may apply. 

Determining Whether Your Business Requires a Licence

Put simply, a licence will give your business permission to carry out certain strictly controlled commercial activities. Some activities will require registration or a permit rather than a licence, but the key point to note is that your business must always seek the appropriate authorisation before trading in certain regulated areas. It is therefore crucial to check which permissions you need before you start your trading activities, and to seek advice from a lawyer if you are not sure.

Highly Regulated Sectors

Specific sectors are subject to tight regulation due to the risks involved. For example, businesses that supply alcohol, operate gambling services or prepare food for the public must follow specific approval processes. Certain areas that may require specialist licences include civil aviation, chemical weapons, controlled medical drugs, consumer credit and hazardous substances. Regulators may intervene if your business attempts to operate without the necessary licences, which can jeopardise your business, its financial stability and reputation.

Types of Licences and Permits

There are various types of licences or permits a business might need. Some examples of common types of permissions required can include (but are not limited to) the following:

• A business that plays recorded music in public or at its business will usually need an appropriate music licence.
• Businesses that seek to sell or supply alcohol will need a premises licence and a personal licence holder.
• Businesses that run betting, bingo, arcades, lotteries, casinos or digital equivalents will typically require gambling licences issued by the Gambling Commission.
• A business that prepares, stores, handles or sells food to the public must register with the local authority.
• Premises-based businesses (such as pubs, restaurants, night-time venues, hotels, cinemas and theatres) will often require a premises licence.
• For one-off or short events at unlicenced venues, organisers may need a Temporary Event Notice.
• Certain construction activities may require consents such as scaffolding licences or building regulation approvals.
• Specialist regulatory licences may apply in specific business areas.

It is vital that you fully understand and comply with the terms of any licence or permit you obtain, which can be strict and onerous. 

Why Securing the Correct Licences Is Key

Many everyday business activities in the UK cannot legally be carried out without a particular licence or registration, and determining which ones apply to your situation can be challenging in practice. Failing to obtain a licence before carrying out a regulated activity can result in government enforcement, financial penalties and, in severe cases, criminal charges depending on the activity involved. Investors, lenders and commercial partners often review a business’ licensing position as part of due diligence, so failing to have any necessary licences or permits can also affect commercial, funding and growth opportunities.

Licensing obligations can vary significantly across sectors, and application processes can include qualification requirements, inspections or detailed eligibility checks. 

Key Takeaways

A licence grants your business formal permission to carry out certain controlled activities. While not all businesses need one, many sectors (from food preparation and alcohol sales to gambling operations and specialist areas such as aviation or hazardous substances) will require specific types of approval before trading begins. Because licensing systems vary by activity and region, legal advice from a regulatory solicitor is invaluable to help you understand which licences you need and how to obtain them. 

If you need assistance with a licence for a new startup business in the UK, our experienced regulatory and compliance lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.

Frequently Asked Questions