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Chapter 13 - Small Business Law

Business licences

What types of businesses need a licence?

• making or selling food which can go off
• health or entertainment activities, such as a business involving sauna, massage, snooker, billiards, slot machines, a night club, disco or showing films
• selling alcohol

For example, Lotando has a spaza shop, which sells only dry goods like tea, washing powder, coke and so on. He sells no fresh foods so he doesn’t need a licence. Patrick sells fruit and vegetables. Joyce has a stand next to the road where she makes hotdogs and fishcakes. The things Patrick and Joyce sell can go off and so they need a licence.

But no licence is necessary if:

• the person makes and sells the food from their home
• the trader has a hawker's licence

How to get a business licence

For a licence to sell alcohol, you must apply to the Liquor Board for a liquor licence. The procedure is complicated and it is best to get a lawyer to help you.

For the other types of business licences, you must contact the local council, which will give you an application form. If you are the owner of the business you must fill in the form and give it to the local council, with a copy of your Identity Document and an application fee. (See Problem 2: Starting a business which needs a business licence)

Different government departments will contact the owner, to make an appointment to visit the business. These inspectors will visit the business:

• town planner, to see if the business is in an area that is zoned for business purposes
• health inspector, to see that the business follows all the health rules
• inspector from the Fire Department, to see that the business is not a fire hazard
• mechanical engineer

The inspectors must visit the business within 35 days after you have handed in the form. Your local council can give you guidelines of the things inspectors look at. The inspectors will visit the business and tell the council what they have found out about the business.

If the inspectors want the owner to make some changes to the business premises, the owner must apply to the local council for another 14 days. If the owner does not apply for another 14 days and the work on the premises is not finished by 30 days after giving in the form, the owner will have to apply again and the inspectors will have to come again.

The local council will give the person the licence allowing them to do business. The council can give the licence with specific conditions.

Example: Nolita applied for a licence to sell fruit and vegetables as a hawker. The council gave her the licence, but on condition that she only trades between 8 a.m. and 6 p.m. If Nolita sells fruit and vegetables before 8 a.m. or after 6 p.m., the council can take away her licence.

The council will not give a licence if:

• the place where the owner does business is unsafe or unhygienic
• the person is not considered to be a suitable person to open a business, because he or she has a criminal conviction, or has a reputation for cheating people in the community

Does the business licence have to be renewed?

Traders do not have to apply for a new licence every yea, but they do have to apply for a new licence if:

• if they move their business to other premises
• if they sell the business, the new owner will have to apply for a licence
• change the activities on the premises, where a licence for the new activity is required.

What happens if a person sells food and does not get a business licence?

It is a criminal offence to operate without a licence when this is required by the nature of the business. (See What types of business needs a licence?) The owner can be fined or given a prison sentence of up to 3 years. It is also a criminal offence to sell alcohol without a liquor licence.