Starting business without a license, how serious are the consequences of being u
2024-04-18
49 CommentsRegistering a company is quite straightforward, as the registration process has become increasingly simplified over time. Some business owners, for the sake of convenience, even enlist the help of other agencies to assist with the registration, which can be completed in just a few days.
The essential steps for company registration include name verification, confirming the business address, establishing the company's articles of association, stamp engraving, and obtaining a business license. Missing any of these steps will prevent successful company registration.
Among the aforementioned steps, "obtaining a business license" used to be a source of headache for many business owners. This is because they felt that there were just too many documents required to start a company, and they had no idea which ones they actually needed to handle.
However, obtaining a business license is not as complicated as it seems, and the documents required for different industries are not as numerous as one might think. Let's delve deeper into the intricacies of business licenses together...
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A business license is a permit issued by the industrial and commercial authorities to a company, allowing it to engage in certain production and business activities. It is only with a business license that a company can prove its legitimacy in conducting business operations.
Issuing such a document is also a method used by authorities to regulate the market, a practice that has been in place since ancient times.1. During the Ming Dynasty, there was already a concept equivalent to business licenses.
According to the "Ming History · Treatise on Food and Goods," it is recorded: "At the beginning, the Emperor ordered merchants to buy tea in the tea-producing areas and pay money to request a seal."
The term "request a seal" here refers to obtaining a business license.
2. By the Qing Dynasty, businesses like commercial firms needed to obtain a "ya tie" to operate, which was the rudimentary form of a business license during that era.
3. In the 30th year of the Guangxu era (1904), after the Ministry of Commerce in the late Qing Dynasty promulgated the "Preliminary Regulations on Company Registration," the number of entities required to obtain business licenses increased.
Not only domestic traders and businesses but also various companies from both within the country and abroad needed to register.
4. Subsequently, as times evolved, the business license continued through periods such as the Beiyang Government and the Republic of China.
Even during the period of the Anti-Japanese War and liberation, the business license did not vanish.
At that time, the absence of a unified market entity did not affect the validity of the business license.
Various levels of districts, revolutionary bases, and liberated areas all accepted applications and issued similar operational certificates akin to business licenses.5. It was not until after the founding of the People's Republic of China that the Central Private Enterprise Bureau was established under the Financial and Economic Committee of the State Council, taking on the administration of industrial and commercial affairs. From November 1952, the Central Administration for Industry and Commerce was newly established.
However, due to the market environment still being in a state of recovery, there was no unified standard for business licenses.
As a result, a large number of various styles of "certificates" and "licenses" were issued by local authorities across the country at that time.
6. By 1988, the Administration for Industry and Commerce standardized the size and style of various types of business licenses (including duplicates) across the country, with the addition of ethnic scripts in minority areas.
Since then, business licenses have had a basic standard, and different documents such as "Partnership Business License" and "Farmers' Professional Cooperative Society Legal Person Business License" have emerged with the implementation of relevant laws, and have been used continuously for 26 years.
7. It was not until 2014 that the commercial registration system reform began, introducing a new version of the business license, which is the basis for the business licenses we use today.
This version of the business license integrates more licenses such as the Unified Social Credit Code, Organization Code Certificate, Tax Registration Certificate, Social Insurance Registration Certificate, and Statistical Registration Certificate.
8. Now, the procedure for handling business licenses is becoming increasingly simple and convenient, and electronic business licenses have also come into being.
All changes related to business licenses are aimed at simplifying registration steps and improving operational efficiency.
What would be the consequences if a company were to operate without obtaining the necessary documents?What is unlicensed operation?
Unlicensed operation refers to the illegal act of carrying out business activities that are required to obtain administrative permission according to the law, without having obtained a permit or approval document.
What is operating without a business license?
Operating without a business license refers to the illegal act of conducting business activities without having obtained a business license.
Speaking of which, it is necessary to analyze the relationship between the business license and the operating permit.
Business License
A business license is an important certificate for all enterprises to operate legally. With a business license, the enterprise has the "qualification" to start the industry, and only with this "qualification" can it operate normally.
Operating Permit
An operating permit is required only for industries with special regulations, which is clearly stated in the definition as "certain industries that require an operating permit according to the law."
In simple terms, all industries must obtain a business license before they can operate.Some specific industries require not only a business license but also an operating permit to conduct business.
Back to the main topic, what exactly are the situations of operating without a license or a business license?
There is a misconception we need to clarify: not all operations conducted without documents are illegal.
Specific situations:
The following two situations can operate without documents.
1. In specific places and times designated by the local people's government at or above the county level, selling agricultural and sideline products, daily necessities, or individuals using their own skills to engage in convenient labor services that are legally exempt from obtaining permits.
2. Engaging in business activities that are exempt from obtaining permits or registering according to the provisions of laws and administrative regulations.
Next, let's discuss the consequences of operating without a license or a business license:
1. Companies operating without a license or a business license: The company registration authority shall order correction or prohibition, and may impose a fine of up to 100,000 yuan.
2. Sole proprietorship enterprises operating without a license or a business license: The registration authority shall order to stop business activities and impose a fine of up to 3,000 yuan.3. Partnership enterprises operating without a license or business permit: The enterprise registration authority shall order a cessation of operations and impose a fine ranging from 5,000 to 50,000 yuan.
4. Individual operations without a license or business permit: The department responsible for administrative management of industry and commerce shall order a cessation of illegal activities, confiscate any illegal gains, and impose a fine of up to 10,000 yuan.
Additionally, if a company has previously conducted business activities without a license or permit, such illegal records will be recorded by the regulatory authorities in the credit history and publicly disclosed.
At that point, it may also affect the company's other business collaborations.
Therefore, under any circumstances, it is imperative for a company to properly handle the necessary documentation!