LEGAL ASPECTS OF HOSPITALITY MANAGEMENT Essay Example | Topics and Well Written Essays - 2000 words - 2

LEGAL ASPECTS OF HOSPITALITY MANAGEMENT - Essay Example Licenses are valid for a particular period of time after which carrying out the business will be considered illegal. The licensee should periodically renew the license for them to continue being in operation. A restaurant license allows the prospective restaurateurs to operate within a certain locality; without the license, the business can be fined or closed down altogether(Knezevic and Assaf 392). Requirements for licenses and permits vary from state to state; the most common requirements include employer identification license, business license, foods and establishments permit, liquor license, and local permits. The Role of Small Business Administration in Restaurant Licensing The enactment of the Small Business Investment Act of 1958 officially allowed Small Business Administration to license Small Business Investment Companies (SBIC) to help in managing and financing businesses in the United State of America (Pizam 23). The SBA’s Small Business Investment Companies progra m is still live and active and continues to license small businesses across the United States. Despite the criticisms, the Small Business Administration has greatly assisted small businesses to make steps in their development processes. Small Business Administration provides extensive information and links regarding obtaining a business license. Restaurant applicants can also check with their local government with their state offices for specific regulations; the SBA website provides all state licensing divisions to enable prospective restaurants with easy license (Sherry 54). Among the information contained in the SBA website include federal licenses and permits, state licenses and permits and tools that can help businesses to determine the types of licenses they need for particular types of business. Types of Licenses Necessary for Restaurant Operators in the USA Employer Identification Number Restaurant businesses require several employees to serve their customers. The servers ne ed to operate within the purview of law in order to avoid legal liabilities. This necessitates restaurant owners to have Employer Identification Numbers (EIN). Employer Identification Numbers are essential to the government and the International Reporting Standards for proper business identification and appropriate collection of taxes (Sherry 57). The government is supposed to collect taxes from the restaurants operators, business partners, and employees. The Employer Identification Number is issued within a particular state. Restaurant operators can apply for state EIN by mail, online or fax. The online application is accessed through visiting the IRS website. The period between application and issuance is usually between two and five weeks. Business license Operating a restaurant requires the owners to be in possession of the business license. The business licenses are state-regulated and they allow restaurant operators to run businesses within specified jurisdictions. The restaur ant that carry out any type of activities that the federal government monitor and regulate are required to have a federal business license. Federally monitored and regulated activities include sale of alcohol and transport of plant and animal products. The primary purpose of business licensing is to help the government control and monitor businesses in the states in order to avoid sprouting of illegal businesses (Baum 21). The restaurants must operate within the licensed activities, otherwise the operators will be