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Our experts will walk you through common business license challenges and best practices to tackle these challenges—be it with outsourcing services or with a software solution.


Disclaimer: Please be advised that this recorded webinar has been edited from its original format, which may have included a product demo. To set up a live demo or to request more information, please complete the form to the right. Or if you are currently not on CSC Global, there is a link to the website in the description of this video. Thank you.

Christy: Hello, everyone, and welcome to today's webinar, "Business Licensing: Preparing for the Upcoming Filing Season." My name is Christy DeMaio Ziegler, and I will be your moderator.

Joining us today Brian Bartnicki and Arianne Turnier. Brian is a senior sales engineer in Licensing. Since the inception of CSC's Business Licensing Services, Brian has been assisting customers with their industry-specific requirements, which range from research and portfolio management to renewal services. Arianne is the Director of Product Management for Licensing. She is an industry-recognized expert and an advocate for supporting the needs of licensing professionals and recognizing the value they bring to their respective workplaces. Arianne has been at the forefront of our license compliance technology for 15 years.

And with that, let's welcome Brian and Arianne.

Brian: Thanks, Christy. I'm going to begin by just going over the agenda for this session. Again, appreciate everybody's time and we hope that you get a lot out of what we're going to discuss today.

Briefly we're going to touch on CSC, who we are as an organization. We're then going to move to discuss the types of business licenses. The term is quite vague, right? It means different things to different people. So really want to make sure that we are focusing on what's going to be beneficial and what the session is geared towards. We're then going to dive into common licensing challenges. What is it that you may run into today as somebody who manages licenses throughout the year, what you need to be aware of, and as a result of that, what could potentially occur from a non-compliance perspective. So we always find it valuable to share the importance of why you need to keep everything in order and what could happen if you don't. We'll end with just discussing how CSC can help in the business license universe, and end with a live Q&A. So we encourage you at any time throughout the session to you to answer or really provide questions in the chat.

So let's start here about CSC. We are truly a global organization. I think it's really amazing to say that the sun never sets on a CSC office. We are always open for business, and we can help you in many, many, many different ways. Today, again, we're focusing on business licenses, but some of you may be using us for registered agent services, right, for service of process with the secretary of state. Maybe some of you are using us for global subsidiary management or minute book entity management. Maybe we're doing fund administration for you. Or potentially just know we can also help in the digital brand space, whether it's website domains, kind of just brand protection services. Pretty much anything that you can think of from a global kind of corporate compliance perspective, CSC is here to help you in multiple, multiple capacities.

So we really appreciate your time. We're excited to dive in. And Arianne is going to kick us off talking about the types of business licenses.

Arianne: Right. So the types of business licenses, there are so many, and there's over 150,000 different jurisdictions that regulate a type of license. When we look at the types of licenses that people are filing, they generally fall into two categories.

Common licenses, licenses that are really just the privilege to do business. It might be related to a professional. It might be a business license, an occupation, a privilege tax, some kind of business tax receipt. And these are pretty common. A lot of companies just need these just to do business in a city, in a county, or in a state.

When we get to the industry-specific licenses, it really has to do more with the type of business you do. What are your business activities? Are your business activities related to providing food to buyers, to consumers? Do you need a food and health permit? Are you doing construction services? Do you need a contractor license? Insurance licensing if you are in the industry. If you have liquor and tobacco, you might be needing to get a license both at the city, at the county, and at the state level. And pharmaceuticals, if you're selling pharmacies. These are just some of the examples.

What we find is that it could be a product that's regulated. For example, if you're selling furniture, you might need to have a furniture license. Especially during the summer months a lot of retailers have a summer furniture. If you're selling things like if you're a restaurant and you happen to have certain products on your menu, like egg or dairy.

And then we also have services, if you have services that are being regulated in some way. So contractor, for example, insurance, those are all examples of services that you might be seeing being regulated. And both a business can be regulated as well as an individual and even a piece of equipment. So we see things like vending machine equipment licensing or permitting. We see, obviously, tractor-trailer permitting, X-ray machines. And as well as professional licensing.

So all of those are examples of licensing that can be a lot more complex than did we file a business license. So it's really important to look at the activities that we do when we're looking at the types of business licenses we might need.

Brian, I'm going to hand it over to you to go over the compliance life cycle.

Brian: Thanks, Arianne. So beyond the business licenses, which we're going to dive further into, some of you might also come into touch with the secretary of state, right, entity formations. You might get into just the annual reports, right, to keep those actual secretary of state kind of entity registrations good to go. You might expand, right, or qualify into additional states. And you might actually be involved when withdrawing or dissolving companies.

The key here, though, is sometimes people just think that I manage secretary of state filings and annual reports and I don't need to do anything else. What we really want to call out here is everything has a cause and an effect.

When you incorporate a company, it's brand new, you might have a principal place of business location, right, a headquarters. You might need to understand do you have any local obligations, fire permits, alarm permits, elevator permits, local, city, county, village licenses for that site. Again, you're maintaining everything. You're filing your annual reports, but for any local licenses or maybe it's a state contractor license, to Arianne's point, how are you tracking those items and those licenses, again, outside of the secretary of state. Do you have some semblance of organized data that you're managing?

When you expand, right, you might qualify in a new state, and CSC could be your registered agent for that. But what does it look like? Are you going through the process now of triggering what the need is for these local governing bodies? So is there a privilege tax license? Is there a local business tax receipt, an occupational requirement, right? What is it that you need? Do you need an architecture license in a state or, to Arianne's comment earlier, right, a pharmacy license? So you kind of just try to be in the mindset of these transactions.

And the same goes for withdrawing and dissolving them. There always is a cause and effect of that will trigger the need to perform action on industry-specific and local licenses. So we'll get into how we can help with these items later on.

But there really are two sides of the brain here. Sometimes one person in tax might handle licensing. Somebody in legal might really handle this side that we're looking at with the secretary of state. But it's really important, from a best practice, to synergize them and understand that there really are a cause and effect relationship.

So moving forward, from a licensing perspective, again, the these local, city, county, industry-specific licenses, your busy season is coming up. It's upon us. Most of you might have a heavy volume of licenses that are coming due probably within the next four months. From really now until I'd probably say February, you could have a massive amount of licenses because many authorities require renewals to be done either by December 31st. Some might be by the end of January or the end of February.

And so you have many different hats, right? You might have other responsibilities, and to really kind of get in front and manage the volume is quite challenging. You might have to get multiple people to jump in and help. To that point, managing that volume is really difficult just because of the data, right? People have different ways of tracking data. When every local authority has their own expiration date, the license could be due on an anniversary month. It might be a fiscal year end. It might be December 31st, January. It's all over the place. Knowing where to file, when to file, and having the information at your fingertips is really important. Some people have Excel spreadsheets. Some people put data in SharePoint. Whatever you use, it's really imperative that your data is clean in order to physically manage it effectively.

And what makes it challenging as well, especially when we're right at this time of the year, is the sheer complexity or variables that are needed to get these licenses. Some of you might have state industry-specific regulatory licenses, and they want a bond or they want a driver's license image of an officer or they want proof of insurance. Some people might have a lot of local licenses where they want the square footage of your distribution facility, or the employee count in a restaurant, or the revenue associated with the location. And the challenge is there's thousands and thousands of authorities, literally over 150,000 of them, that knowing what you're going to need and when you're going to need it and who to ask, who to go to in your organization is just a real pain. But you need to be aware that it's something that is going to be necessary for you to provide to these authorities when doing the work.

And with that, the final thing you need to be aware of is just actual turnover, right? It's not just turnover, people may be leaving the company. It's people may be switching roles. You might have folks, right, that managed the licenses for 10 years, and now they have a different role in legal or tax. And now the challenge for you is with their knowledge. Maybe you've never done this before, and now you're thrown into a situation where you need to know how to file in Madison, Wisconsin. And what do I need? Do I have to get revenue? Where does it go? Where do I send it? Just having the knowledge and experience along with the natural career progressions of people and maintaining that knowledge is quite challenging, especially when you're going into a year end to early Q1 filing season.

So I'm going to pass it to Arianne, and she's going to go into some other licensing challenges.

Arianne: There are a lot of licensing challenges out there. If you are doing licensing, you probably have a laundry list of things that frustrate you.

Before we jump into the next thing, I do encourage you to use our Q&A. We're going to have time at the end of the call to answer questions. So if at any point in time we're covering something that you have a follow-up question on or if you have a question in general about licensing, please go ahead and post that in the Q&A. We may be able to answer it throughout the call. We also may hold it till the end, so it'll just depend. But I definitely want to encourage you to keep posting those questions so that we can have engagement and make sure that we have the opportunity to answer those questions.

Now as I jump into the next one here, I'm going to talk about those challenges. Like I said anybody who's doing licensing has probably identified a handful of challenges that are very frustrating.

I'm going to start first with research. So there's really kind of a few areas in licensing that can be difficult. Research is one of them. How do we identify the correct authorities to file with? If you heard me earlier, we were talking about industry-specific type licensing and also location, so where do we file. If you are doing business, do you know what cities and counties you should be filing with? Do you know what city you technically fall within? There's a lot of challenges with where do I file, do I know who I should be filing with.

And when we get down to the next one here, do we need to file licenses specific to our products or industries, if you look at these two pieces, these are both really about what do I need to file and who do I need to file with. So again, your business activities, the type of business you conduct, whether it's a service, a product, or both, are going to impact your licensing heavily. And it's going to vary from state to state, to county to county, and also to different localities. The locations you're in, again jurisdiction wise, are going to impact whether that is even a regulated license in that jurisdiction.

Do we have expert research resources to stay on top of the research? This is I think the hardest part. Those first two bullets really require some knowledge about not only your business. Do you know your business intimately enough to determine what products and services you need to be looking at? And then also, do you understand how that business is impacted on a state-to-state level?

So these are challenges just related to research alone, and it's a lot of I don't know what I don't know in the case of research. We also have challenges related to new filings.

Once we figure out what we should be filing, there's also a lot more that goes on with a new application, for example what documents and data do we need to complete a filing. A lot of applications will include instructions, but those instructions can be lengthy. Sometimes it's not so clear. So if we're doing a new application, it could mean that we need everything from ownership information, we need shares, we need history of work, we need certificates of insurance, bonds, expected sales revenue, number of employees. It could be a myriad amount of information that is required just to complete a new application.

And more importantly, how do you keep track of those applications, because some of them can be turned around in 30 days. Some of them might take three to six months to apply for. There's other applications that are lottery based, meaning you've got to hope that you can even get a license, or you may be brokering a license. And how do you keep track of all of those applications in play, making sure that nothing slips through the cracks?

The last one here, can a government body move any faster? It's a challenging one. There are certainly some best practices to make sure that jurisdictions move a little quicker, and a lot of it has to do with hitting that first one, making sure that everything is correct and you don't have to go back to the jurisdictions more than once.

We get to the last piece here, renewal management. When we're dealing with kind of the maintenance of licensing, do we know what licenses we have and when they're due? Is there a single place where you have a source of truth for your licensing, and is that source of truth accurate? Is it easily corrupted, like a spreadsheet? Can we potentially lose data? A lot of times we see jurisdictions sending renewals, and we tend to get in the habit of waiting for the renewal. And if a renewal does not arrive, especially like we saw during COVID, sometimes that license winds up being late or past due. So we want to really make sure that you guys have a way to manage those due dates and know what you actually have to file each year.

What information is needed to submit a renewal? Back to what we're talking about with the new applications, it could be so much different information that is needed for a renewal, gross receipts, employee counts, square footage, number of registers, parking spaces. It could be headcount. It could be officer information or current manager or PIC on duty. So there's a variety of information that needs to go along with a renewal, and keeping track of what's needed is really difficult, especially because sometimes you get a renewal and you're blindsided with the amount of information they need and that's going to take much more time than you have allocated for that renewal.

Do we have a single place that provides visibility into the status of our licensing? So not just tracking the new application work, but having a place to manage renewals and making sure that we have visibility into where those all are. Is there a single way for you to keep track of that? And again, many companies are still struggling with that.

Brian: I'm going to migrate to the consequences of non-compliance. We've talked about just general best practices, but now we really need to understand what can occur.

So the first thing that we want to discuss is simply the delay in products or services. So what does this mean?

Couple of examples that come to mind, some of you if you sell insurance, right, maybe you're a producer, an adjuster, maybe you have surplus line licenses, the producer I'll use for this example, you're physically unable to sell if you don't have the license in the state. Sometimes even when you get licenses, it's not just the license that you need, but sometimes there's a continuing education requirement with it, right? So that kind of follows suit. So if you have the license, you get it in a resident or non-resident state, but you fail to do your CE, now your home state physically falls out of good standing, and it triggers a complete kind of blow across all your other states with the inability, I should say, to sell. If you were to sell, it would just be a massive issue of an illegal policy.

Another common thing is maybe you're like a pharmaceutical manufacturing, right? You have a drug that's ready to go, but for some reason you haven't ahead of time understood if you need a resident or non-resident pharmacy license. Do you need that, right? It's a wholesale manufacturing. Is it any type of license, that you are unaware of, a controlled substance, right, that you haven't gotten, which is going to physically delay the launch or your ability to have that drug or really work in that state I should say.

So that's a common thing. Again, I used a couple examples. But the delay in introducing any service or product is one that comes off frequently.

Some of you might be . . . I'll use the trades here. Maybe you're bidding on opportunities, right? People are calling you, "Hey, we want you to do work, get a quote for work in San Diego, California." And great job, you guys have won the bid. Work starts in two weeks, but part of our agreement is that you're licensed appropriately. There's probably a good chance that nobody in your organization, unless you knew that you were going to win this bid months earlier, has gone through the steps to identify if there are local requirements, or you have the appropriate state licenses, contractor licenses to do that work.

The last thing you want to have happen, right, is that you're filing and then all of a sudden a San Diego County inspector comes on the jobsite and says, "Hey, I need to see your license." You don't have it. They make you walk off the job. And it's just not a good situation.

And really what comes with that, compounding is simply the negative press. The last thing that you want is your brand, right, your image you don't want in the news for failure to have a particular license. And one that I think about often is that of a restaurant, right? Those of you that have a food establishment license or maybe like a health permit, it's a very inexpensive filing, but hopefully no one ever forgets to renew it, because again if an inspector comes in or notices it or there's a violation, right, because something was done incorrectly, now your business takes a big hit. And other items can occur, which Arianne will talk to. But you don't want that negative press, that article out there anyone can search, look it up, see that there was a big mishap, which really could have been unavoidable. You could have avoided it, I should say, if you had kind of everything buttoned up with your licensing process.

So those are the three that I'm kind of going to address, and I'll pass it to Arianne to cover the final three.

Arianne: So when we look at some of the other consequences, something like fines, penalties, and lawsuits, these can have a monetary impact, and they can be substantial. Some licenses will charge a penalty or a fine upwards of 2% of the license fee per day. Sometimes it's a percentage of the gross sales for a period of time that you're late. So this can be in the hundreds of thousands of dollars if it is past due.

We also see that it's a case of maybe non-compliance. I had a company out in California find out that they had not been filing in Los Angeles, and the past due fines, because they had never registered their business in Los Angeles, it was a quarter of a million dollars for that penalty to allow them to operate in Los Angeles and get compliant and file that license. They couldn't hold the license if they did not apply and pay the penalties.

Now the fines and the penalties oftentimes are not just related to how much it costs to pay the jurisdiction and get compliant. Sometimes the cost is actually about the loss of revenue during that period of time. So we may also see that there's a financial impact because we can't, again, provide services. Products are on hold because of certain types of licenses that don't allow us to operate.

Lawsuits are also a potential case. We may wind up having lawsuits where we have to deal with legal action and, again, getting our lawyers involved and those additional costs to go to hearings in cases like that.

Business closure is another challenge. When we talked a little bit about delays in providing products or services, business closure is another area where businesses can be impacted. Sometimes it is a case of non-compliance, where you are so out of date the jurisdiction closes you down. And I have certainly seen cases where pesky local authorities in particular like to go to a place of business and padlock the location until that license is resolved. And sometimes it's only a one to two days to get it resolved, but it's the impact to your business, again the negative press, the experience of having to deal with what are your employees doing, all the loss of product, potentially your location if you're a retailer.

But business closure can be significant, both in a physical case, your location could be shut down, but also you could lose the privilege to do business. They can suspend your license. They can withdraw your license. And if you have enough penalties, if you have enough violations, they can revoke your license. And so sometimes, depending on the product or service we're talking about, that can be a huge impact to your business. You can lose the privilege to do some type of construction, or you may lose the privilege to sell a certain product, like alcohol.

So all of these can have very, very adverse effects on your business. And I think the worst one really comes down to arrest. And a lot of times this points right back up to both location managers and also officers. Whose name is on the license? So that could be a qualifier, it could be a pharmacist, it could be a technician, it could be a location manager who's the designated contact. And are officers protecting these individuals whose names go on the licenses, who are really the accountable parties? And sometimes that's you. Sometimes it's those individuals on this call today who've put themselves in a position as an officer in some way so that they can sign off on licenses.

So we have seen cases where arrests have been made in the case of non-compliance or severe penalties or violations, and that can again impact the individuals within your company. So it's important to protect those folks as well and make sure that we don't put them in that position with compliance.

Brian: How we can help when it comes to business licensing. There's really three areas. One is going to be simply research services. And how that works, we have a couple different types of research options.

One is you just might say, "Look, CSC, we're going to open a new location, and I don't know what we need within that location from a licensing perspective. Can you help me out?" So we have multiple questionnaires for many different industries. They're about two to three pages. You complete that questionnaire, let us know, again, where the business is going to be conducted. And we have an in-house team that identifies state, county, city, village, township, borough, potentially school district even, right, licensing obligations that you may have and then provides that to you in a report with the licenses, the applications, what you would need to do to expand. And we call that new location research.

The other is really more of a I like to use kind of the phrase like a Sherlock Holmes, state of the union reset. This is really a service that we call existing location research, and this is used when customers come on board for our outsourcing service most likely. And I'll get into outsourcing next.

But with the existing location research, you provide to us a listing of the locations you have, the entity operating there or potentially multiple entities. Again, we use that industry-specific questionnaire, and our team does quite a deep dive. We're going to uncover, first of all, not just what your obligations are, right, what licenses do you need. But then we're going to do a compare and contrast. We're actually going to say or find out, I should say: Do they exist? Are they active? Let's pull copies. Maybe it's fallen out of good standing and there's remedial action that needs to be required. So what is that? How do we get everything where it needs to be to be back into compliance.

And then the other part of the solution, that research is going to let you know potentially if you filed something unnecessarily. So if you have an office in West Chester, Pennsylvania, in Chester County and Lenape Village and Pocopson Township, we might uncover that you really just need the Chester County license and you can get rid of the other ones. So again that's going to tell you what you have, what you don't have, and what you have but you don't need. And that's a real value service to kind of just start over.

So I'm to let Arianne later on talk about self-service, but I'm going to just briefly now talk to the outsourcing. So if we did that existing research I talked to, or maybe you have clean data, right, you have a spreadsheet, you have all the expiration dates, the file numbers, you're confident in what you have, you can give that to us to manage. But whatever option, whether you give us what you have or we do that analysis, that you're going to be able to see all your license data within the CSCNavigator. You're going to get a dedicated contact. It's all world-class secure. It's a SOC 2 environment. So all the data exchange of sensitive information is all going back and forth securely.

We're going to prepare and we're going to start to renew all of your licenses 60 days in advance. Your dedicated contact is going to do that. We're also going to take the headache of you getting check approvals or going through your accounting processes internally. You don't have to worry about paying the fees on your end. You're not giving us a retainer. We're not holding anything on escrow. We're going to take that administrative burden off of you, and we're just going to pay for it. And with that as well, we're going to do all the red tape follow-up. You don't have to worry about nagging the jurisdictions. We're going to be the ones, and we have a large filing team. But your dedicated contact is going to be the one checking with the authority, getting confirmation, getting the license once it's issued.

And then we're going to put all that memorialized data in your account. The license image will be there. Any originals that we get we will send to you with posting instructions. And then, ultimately, you're going to get invoiced as we're doing the work.

But that's really our outsourcing service. It's a centralized, secure, kind of giving us everything to do on your behalf, instead of you having to worry about it. But I'm going to now pass it to Arianne to dive into the self-service model.

Arianne: Perfect, Brian. And I encourage you again on the call if you have questions about anything we've covered so far, or if you have questions about our outsourcing services or our software features that we have, please go ahead and put those in the chat and we'll have time to answer them later.

Now I'm going to talk a little bit about License Pro. This is our software made for people who are doing licensing and permitting. What you probably heard throughout our call today is all of the different challenges that go along with licensing. Companies often opt to either outsource licensing or keep it in-house. And if you're keeping it in-house and your volume feels overwhelming, License Pro is a great solution. What it does is it's going to bring all of your licensing into a single place and create visibility into how your business is licensed and ensuring your filings are accurate and on time.

This is a secure system. As Brian mentioned, all of our products are SOC 2 certified. That means that we make sure that your data and your data security is a high priority for our organization. We support lots of industries that require that strength and security based on the types of filings they do.

Now when we implement this system, we take your data from Excel files or whatever data source you guys provide to us, and we work with you to import your data in so that you have a single place where everything is available. From there, we're going to then work on how to best manage those licenses.

So License Pro is going to provide customized workflows to streamline your renewals. What that means is you can build workflows that are unique to the license types you have and the jurisdictions you're filing in.

So, as an example, if I'm filing a license in two different states for the same type of business activity, my requirements can vary dramatically. Some states are going to require additional documentation. So I might need to get information about my employees, and I might need to provide copies of permits that they own or hold. In another jurisdiction, I might just need to provide a list of how many people are licensed in that jurisdiction. I might require bonds or certificates of insurance for some licenses. Or I may need to get photographs for things like sign permits.

When we build these custom workflows, it means once you set that workflow up, the system will remind the user year after year, quarter after quarter of the requirements for things like renewals and other business processes. Now these can be customized for each of our clients. So we do have recommended processes, but you can also deviate from those and design your own.

The compliance processes are going to be set up to fit your industry. And the important part about that is that we're not just going to be a renewal management tool. I like to think of License Pro as kind of a compliance ERP. Think of it as one system to rule them all, kind of like the Lord of the Rings. We want to make sure that all the processes related to licensing can be housed in a single place.

What that entails is that we are going to bring in everything from the entities that you do business under, the officers or individuals who might need to be licensed or reported on, any locations, any licenses, any licensed equipment, any licensed individuals, any inspections and violation processes you might have, and those also can have customized workflows for those actions. You might have workflows for new location processes, personnel changes, onboarding and offboarding employees. You may have processes for renewing licenses in jurisdictions where they have to go with another tax bill. So again, all those processes can be defined within the system, standardized and automated.

The system is also going to allow you to integrate with other applications within your organization. The most common one is accounts payable, so that we can track all the payments that you make for your applications, renewals, or other reporting fees, as well as you know generating a check request or managing the transactions for expense reporting.

Now other systems that our software can also integrate with, it might be something like a site management system, so that you always have an ongoing load of site information, including new openings that might be pending. We might be getting an HR update. So we're looking at personnel turnover. So we can always keep track of who needs to be onboarded potentially, or if we have change in managers of the locations. So the system can integrate with any internal source. We have APIs available and utilities available to create those integrations.

We also deliver dashboards and reports for visibility, and this is really important because what we find with licensing is it may be a primary individual doing licensing or it could be a team of individuals doing licensing, but other people need to know about the licensing. So the filing is one action, the visibility is another priority. So having that dashboard to see what is pending, I might need to see my current workload for the week. I might need to plan for my team and my resources. But I may also want a dashboard for things like KPIs. How much am I spending per state on licensing? Do I have any licensing gaps? How many licenses were late this year?

So this is something that you can create within the system to not only build visibility, create quick actions so that we can get to the system and the work immediately, but also we can deliver reports out to different people throughout the organization. So it might be reports out to the stores, letting them know that a license was completed and is available for download. It could be reports that are going out to an officer to let them know what licensees their names were put on. It could be for the construction team to let them know that you've done a certain amount of licenses to get the location ready to go.

We also provide easy access to all your licensing data and documents in a single tool. So this is a data repository as well as a document repository. So that means we're going to store your documents. You can drag them and drop them directly in the system and share them with collaborators throughout the organization and even assign tasks to different collaborators throughout the organization.

So all in, again License Pro is really a self-service tool to make sure that you have all of your licenses in a single place, you know what you're filing and when you're supposed to be filing them, having visibility so that we know how to get everything done on time, and also so that everybody who might need information related to compliance can get it. And we also have within the tool the ability to do some research for your own licensing purposes through a self-service tool.

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