How Does a Company Become Licensed and Bonded?

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  • Written By: N. Madison
  • Edited By: Jenn Walker
  • Last Modified Date: 02 October 2019
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The steps a company must take to become licensed and bonded depend on the jurisdiction in which the company is located. Usually, however, a company must start by learning the licensing requirements in its area based on its specific type of business dealings. At that point, representatives of the business will typically apply for a license and pay the required fee. Once licensing is secured, company representatives may then contact a bond agency to apply for bonding. If the application is approved, company representatives sign required forms and pay a premium for the bond.

To become licensed and bonded, a company usually has to go through two separate processes. The first typically is securing the licensing that is required in the jurisdiction. The types of licensing a company needs generally depends on the types of products the company manufactures or sells, or the kinds of services it provides. Some companies may only need basic business licensing while others will need specialty licenses in addition to a basic license to run a business.


A company owner or representative can typically learn about the types of licenses that are required by contacting the Department of Licenses and Inspections or a similar organization in his jurisdiction. By doing so, he can learn not only the types of licensing his company will need, but also the requirements his company will have to meet to obtain licensing. Once the company has met the requirements, the owner or a company representative, will typically have to complete an application for each type of required licensing and pay any associated fees. In some cases, the owner or a company's primary representatives will also have to submit to background checks or allow a facility inspection as part of this process.

With licensing secured, a company may then go on to earn the description "licensed and bonded" by contacting a bonding agency for help. A bonding agency will usually collect a good deal of information from a company, including details about the business' operations and the type of bond it needs. The bond agency may also run a background check on the owner of the company and its key employees. If the bonding company feels satisfied with the answers provided and the background check, it will typically approve the bond.

After receiving bonding approval, a company may then take the last required steps to become licensed and bonded. Usually, this involves signing an official agreement with the bonding company and paying the required premium. The amount a company will have to pay will usually depend on the type and amount of the bond.


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