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In which situation may a business need a licence?

Answer and explanation

Correct answer: When the law makes permission mandatory for an activity

A licence is legal permission granted by a law or government authority to carry out a specified business or activity. Therefore, a business may need a licence when the law makes such permission compulsory. Starting advertising does not by itself create a licensing requirement, although separate rules may apply in particular sectors. Exam tip: remember a licence as prior permission required by law.

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Business EnvironmentLegal EnvironmentBusiness LicensingGovernment RegulationClass 12Business StudiesClass 12 Mcq

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