In some jurisdictions, companies engaging in trading activities must obtain a commercial licence to conduct business within the relevant jurisdiction. The licence will be issued by the company’s registrar (or the governmental authority responsible for issuing licences within the jurisdiction) at the time of the incorporation of the company and must typically be renewed each year.
The company must ensure that the licence covers all commercial activities carried out by it, otherwise the company may be subject to penalties.
In addition to its commercial licence, a company may need other licences to conduct its business. For example, where the business is in a regulated sector it often needs a licence to carry out activities in that sector from the relevant regulator, especially if its business involves financial services or insurance. The type of licence a company needs will depend on the nature of the activities it carries out and where the company is incorporated. Licensing requirements will vary from jurisdiction to jurisdiction.