Regulated trade licence

What it means

A regulated trade licence covers a notifiable trade for which, besides age, legal capacity and a clean record, proof of professional competence is required. Driving schools and tour operators are examples; keeping books for clients is not one of them, as that sits among the free trades.

What sets it apart from a free trade is precisely that condition, and from a craft trade the way competence is proved: an apprenticeship certificate is not enough, as the Trade Licensing Act lists the specific education, experience, certificate or examination for each activity.

A regulated trade is still a trade licence that arises on notification, not on permission from an authority. That sets it apart from licensed trades, where the authority grants the permit, and from activities that are not trades at all, such as tax advice, audit or legal practice, which special laws govern and professional chambers supervise.

How it works in practice

It is notified at the district office, trade licensing department, which acts as the single point of contact and passes the data on. Without documents evidencing competence, no trade authorisation for that activity comes into being.

If the entrepreneur does not meet the conditions personally, a responsible representative who does must be appointed. A company always appoints one for a regulated trade; usually it is the managing director, where the education or experience is there.

When setting up an s. r. o. with a regulated trade we collect, along with the founding documents, the responsible representative’s papers: a diploma, proof of experience or a certificate, and their consent to the appointment. The notification goes in together with the application to the commercial register, so one missing document delays the whole company.

What to watch out for

A company holds only free trades in its registered scope and does the regulated work alongside them because the order arrived at once. That is trading without authorisation: the trade licensing office can impose a fine, and the customer gains an argument for not paying the invoice for work the supplier had no licence to do.

When the responsible representative leaves, the obligation does not end with their resignation: the business must report the departure and appoint a new one within the short period the Trade Licensing Act sets. Without a new representative the activity has to be suspended or removed from the business activities, otherwise it is trading without a licence.