It’s summertime, this means running through sprinklers, going to the beach or, for many children, setting up a lemonade stand.  However, four 10-year-olds who set up a lemonade stand in their front yard near Congressional County Club’s golf court (the site of this year’s U.S. Open).  The kids were fined $500 by the Montgomery County Department of Permitting for operating without a license.

What Happened To The Children’s Lemonade Stand?

The U.S. Open has created a bit of chaos for those living near the golf course.  With many neighbors willing to sell parking spaces on their lawn (by paying the county about $300 for a fine) a few children wanted to raise money for charity.  But, the fine, for operating without a license wasn’t necessarily paid by the children, the county government finally relented and allowed the lemonade stand to continue working if they moved 100 feet down the road.

What Happens If You Operate A Business Without A License?

Every state has its own laws and regulations regarding someone running a business.  However, almost every state requires a person to obtain a business license. Depending on how you formulate your business (an LLC, an S-corporation, etc), you may have to pay a different amount for a license.   For those that avoid purchasing a business license, the punishments vary from having to pay back license fees to stiffer penalties.  Many of these penalties include back license fees with high interest rates attached to money owed.

However, if you have operated a business without a license, some states do have an amnesty program or payment plan for those with past due fines.  These programs allow you to pay your business license fees without the accompanying high interest rates.  For example, in Nevada, if you fail to apply for a business license, you could be subject to a penalty for non-payment of license fees.

When starting a business, it’s important that you speak with an attorney.  They can help you figure out the best way to form your business, help you with employment issues and help you with contracts.  While some small business owners may be concerned with the cost of working with an attorney, many times an attorney is willing to work with a small business on a lower fee because of the work brought to the attorney.  A business owner can also see significant savings by using an attorney instead of trying to do everything on their own.

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