Note: BBB Data Quality Consultant, Jessi Cheney, is a contributing author on this post.
Checking a BBB Business Review is the first step in vetting a company, but it’s not the only step. Additionally, potential customers should check that businesses have the required licensing before signing contracts. BBB Accredited Businesses are required to keep all licensing up-to-date in order to maintain accreditation; however, BBB does not publicly report on those business licenses.
Why is it important that businesses are properly licensed? Business licenses are required for three main reasons:
- To formally identify businesses and hold them accountable for their actions;
- To protect public health and safety;
- And, to keep track of finances for tax purposes.
Also, businesses in certain industries may be required by government agencies to purchase bonds before they can acquire licenses. Bonds protect consumers by demonstrating that businesses properly adhere to laws and other federal, state and local regulations.
To verify licenses it may be necessary to check with several different agencies. For example, if a business is in the contracting industry, it will most likely have a general business license and a contractor’s license, plus insurance and bonds. Each state has different departments that handle business licensing, and companies are required to be registered with every state in which they do business. Starting a home improvement project? Need a quick car repair? Switching doctors? Make sure the businesses that get your hard-earned money are legitimate; business licenses strive to protect you and the integrity of marketplace interactions.
- Department of Revenue; 800-647-7706; dor.wa.gov/content
- Secretary of State; 360-725-0377; sos.wa.gov
- Department of Labor & Industries; 800-647-0982; lni.wa.gov
- Secretary of State; 503-986-2200; sos.oregon.gov/business
- Construction Contractors Board; 503-378-4621; oregon.gov/ccb