Setting up a new business and going through the company formations process can be an exciting experience. However, once you have set up your business and officially formed your company, you may be in need of a professional licence to operate your business legally.

If you are setting up a business that needs a licence, then it makes sense to do it as a limited company or LLP because you will be taken more seriously as a bona fide business in the eyes of the law. Plus you may even be able to secure a much better deal for your business insurance as insurance companies have more faith and trust in businesses that have officially registered themselves as a company.

In the UK, there are certain business types that need a licence to operate legally. The most obvious and common businesses needing licensing are to do with selling alcohol, tobacco and gambling. For example, a pub or club selling alcoholic drinks, and a betting shop or casino.

You may have a business that only needs a temporary licence, such as if you run a few public events each year where alcohol may be on sale, or where you are running a prize lottery to raise money for a cause. In most cases you would need to apply to your local authority for your area to obtain a licence for these uses.

There are different types of licences required for certain operations, for example for driving instructors or HGV driver training etc. These are individual licences issued by the DVLA that are required for you to legally drive vehicles and enable you to obtain insurance to cover for accidents and injuries.

In the UK, you usually need two types of licence to run a public house, restaurant or club in accordance with the Licensing Act 2003. These licences are primarily for the sale of alcohol on your premises.

You will need a premises licence that covers your building where you operate your business. This licence will be issued once your premises has been inspected and has met with all current health and safety and fire regulations. Your second licence is a personal licence. This empowers you as an individual to legally own and run the business.

These licences come with a lot of responsibility. To be able to keep your licences you will need to ensure that your business does not breach any of the laws that cover you, or else you could see yourself losing your licences and your premises being shut down. Should you fall foul of the law, then you can expect to be hit with heavy fines as a result, and may find yourself unable to obtain the same licences again in the future.

Applying for these licences

Does My Business Need a Licence? Your Company FormationsYou should apply for both of these licences through your local authority in the area where you will be running your business. You can pick up licence application forms from your local authority office, or download the licence application forms you need for your business from the website at the Department for Culture, Media & Sport, where you can find links to the different licences they cover.

If your business relates to gambling, then a licence to become a bookmaker can be obtained from the Gambling Commission .

Licence renewals:- Your personal licence will last for ten years, and it can be easily renewed each time for a further ten-year period, as long as your local authority are happy with your continued suitability to hold the licence. Most licences are ongoing, so will require renewal and further fees paid for renewal and upkeep. Licence fees vary, so make sure you check any price changes and ensure you pay the appropriate amount upon renewal to keep yourself covered.

In most cases, obtaining a licence will usually require an accredited qualification being in place that is related to the industry sector. This can mean showing a qualification in public house management in your licence application. It would be very difficult if not nearly impossible to be issued with a licence without having any related qualifications.

There are also other check that will be made on your background, such as any previous criminal convictions, where the police force may object to you being issued with a personal licence. The police can also have a current personal licence revoked should they have any serious concerns about you as an individual. You could also see your premises licence revoked by the police should any breaches in licensing laws occur. This will mean you business will be closed down.

Other forms of business where a licence will be required

Does My Business Need a Licence? Your Company FormationsThere are many business where you will need to obtain a licence to operate legally. When setting up a new business, make sure to check and see if you require a licence before going into operation. In most cases, you would not be able to obtain business insurance without holding the appropriate licence for your company.

Businesses that require licences include:

  • Child care
  • Credit and financial services
  • Dog breeding
  • Ear piercing
  • Gambling services
  • Goods haulage (HGV)
  • Import and export
  • Pet shop
  • Private coach operator
  • Security guard
  • Sports coach
  • Taxi driver

Usually, your local authority will be the first place to go to for your applicable licences, but sometimes you may need to obtain other licences from a professional trade association that is connected to your business sector.

Setting up a new business in any of the above listed industries will require a licence to be in place before you start to trade. To trade without a licence can lead to very serious consequences and can see your business being closed down, fines being applied and even a criminal conviction in some cases.

Most of the activities listed above (and other business activities not listed here) will require a CRB check (Criminal Records Bureau), or a check under The Disclosure and Barring Service ( DBS). The DBS check was set up in 2012, taking over the checks previously done by the Criminal Records Bureau and the Independent Safeguarding Authority with regard to preventing unsuitable people from working with vulnerable groups, including children.

Further reading:

A Guide to Business Financing and Loans

Do I Need Business Insurance?