Concept and Legal Nature of the Operating License
An operating license is an official permit or authorization that allows natural or legal persons to conduct certain commercial, industrial, or other entrepreneurial activities. Operating licenses are granted in various areas of law and are subject to extensive public and private legal requirements. The use and necessity of an operating license depend on the type of activity and the relevant statutory provisions.
Legal Foundations
The legal foundations for operating licenses are primarily found in trade law, sector-specific laws, as well as in environmental, health, safety, and economic law. Key legal bases in Germany include the Trade Regulation Act (GewO), the Federal Immission Control Act (BImSchG), the Medicinal Products Act (AMG), the Circular Economy Act (KrWG), and specific EU directives for individual economic sectors.
General Trade Law Provisions
According to the Trade Regulation Act (§ 1 GewO), the operation of a stationary trade generally does not require a special permit unless special provisions apply to certain types of trades. For trades requiring authorization, such as the security industry, hospitality industry, or real estate brokers, an operating license (‘Erlaubnis’) is legally required.
Special Statutory Operating Licenses
In addition to the Trade Regulation Act, numerous special statutory requirements or operating license obligations exist, for example for:
- banks (§ 32 KWG)
- insurance companies (§ 8 VAG)
- pharmacies (§ 1 ApoG)
- waste disposal plants (§ 4 BImSchG)
- aviation companies (§ 20 LuftVG)
- public transport companies (§ 2 PBefG)
- gambling operators (§§ 4 ff. GlüStV)
Types of Operating Licenses
Operating licenses can be classified according to various criteria, including purpose, issuing authority, and the scope of authorization.
Public Operating License
Die public operating license is a sovereignly granted permit that is subject to statutory requirements and official examination. These licenses are typically linked to conditions, requirements, or time limits and may be granted, refused, revoked, or withdrawn within the context of administrative procedures.
Private Operating License (License Agreements)
In the business sector, the term ‘operating license’ may also refer to private contractual rights of use, such as in the context of software licenses, trademark, or patent rights. This refers to a contractual permission to use protected rights, which does not replace an official operating permit.
Issuance and Procedure
Application Procedure
The issuance of an operating license is done upon application to the competent authority with subject-matter and local jurisdiction. The application process follows specific formalities and requirements. These regularly include:
- Proof of personal and professional reliability (e.g., police clearance certificate, excerpt from the central trade register)
- Proof of orderly financial circumstances (e.g., Schufa report, insolvency clearance)
- Suitable premises, equipment, or technical requirements
- Professional qualifications or certificates (e.g., certificate of expertise, master craftsman’s examination)
- Evidence of insurance or financial securities (e.g., business liability insurance, bank guarantee)
The competent authority examines whether the statutory requirements are met and makes a discretionary decision. In addition to the initial application, fees are often required.
Rejection and Legal Protection
If the application for an operating license is rejected or approved with conditions, the right to be heard applies. Administrative decisions can be appealed in accordance with the provisions of administrative law, and if necessary, an action can be brought before the administrative court.
Duration, Extension, Transferability, and Expiry
Validity Period and Extension
Operating licenses are often issued for a limited period or subject to revocation. Approvals with time limits must be renewed by submitting a new application. The renewal is again subject to compliance with all statutory and regulatory requirements.
Transferability
Whether an operating license is transferable is determined by the applicable law. As a rule, operating licenses are personal and not transferable. The transfer of an operating license to third parties is usually excluded unless the law or an official permit provides for exceptions (e.g., concessions in the transportation sector).
Expiry and Revocation
The operating license may expire by:
- Lapse of time (in the case of a temporary permit)
- Cessation of the activity
- Revocation or withdrawal by the authority
- Loss of statutory requirements (e.g., insolvency, unreliability)
The revocation of the operating license is subject to strict formal and material requirements and serves to protect public interests.
Significance and Function
Operating licenses serve to protect the general public, consumers, and market participants. They ensure compliance with statutory standards, for example in the areas of health, safety, environmental protection, or economic regulation.
The licensing requirement ensures that only those market participants participate in economic life who meet the necessary personal, material, and legal requirements. Operating licenses prevent distortions of competition, abuse, and risks to the public arising from unauthorized or improper business operations.
International Aspects
Internationally, many countries also have comparable operating licensing systems aimed at risk prevention, consumer protection, and market regulation. Cross-border business activities (for example in the financial sector, transport industry, or with international concessions) are subject to additional requirements, such as those set by the European Union or international law.
Overview and Distinctions
Difference from Permission and Concession
The term operating license is to be distinguished from the term permission (general approval for carrying out a specific activity) and concession (in particular in the area of public services and monopolized economic sectors). However, in practice, these terms are sometimes used synonymously.
Connection with Other Authorization Requirements
Other relevant legal terms associated with the operating license include:
- approval
- authorization
- registration
- notifiable trades
Summary
The operating license represents a central instrument of public economic order. It is subject to strict statutory requirements, a formalized allocation procedure, and extensive official control. Operating licenses are always linked to the protection of public interests and play an important role in ensuring law, order, and consumer protection within the economy. A violation of existing licensing requirements may be prosecuted as a regulatory offense or criminal act and may entail far-reaching economic and legal consequences.
Frequently Asked Questions
What legal requirements must be met to apply for an operating license?
Numerous legal requirements must be observed when applying for an operating license, which may vary depending on the type of business and sector. As a rule, companies must meet the general trade law requirements, especially the applicant’s personal reliability, orderly economic circumstances, and often proof of professional qualifications. In certain industries, such as the security industry, hospitality, or medical facilities, specific statutory requirements must also be observed. In addition, required documents such as a police clearance certificate, an excerpt from the central trade register, certificates of good standing from the tax office, and, if necessary, a building permit for the business premises must be presented. Further special statutory requirements, such as provisions of environmental law, labor law, or data protection law, may also apply. The process is usually overseen by the competent trade authority or a sector-specific supervisory authority, which checks all legal requirements before an operating license is issued.
What are the legal consequences of operating without a valid operating license?
Operating without the required operating license constitutes a violation of the law and can have severe legal consequences. These range from an official cease-and-desist order and immediate closure of operations to hefty fines or criminal penalties, particularly if the business involves safety-relevant or highly regulated activities (e.g. food production, healthcare, gambling). Furthermore, obtaining a future license may be made more difficult or permanently denied if illegal operation was previously detected. Other consequences may include civil law claims by injured third parties (e.g. claims for damages), while insurance coverage is regularly forfeited or may be restricted if no license was present. Authorities are entitled to impose fines, and in some cases, criminal investigations may be initiated. In addition, public law fees may be charged for the measures taken.
Can operating licenses be transferred or sold?
As a rule, operating licenses in Germany are strictly personal rights that are tied to the person or the company that applied for and was granted the permit. Transfer or sale of an operating license is therefore generally excluded. In the event of a change in ownership or operator, the new person or company must apply for the license themselves and present the required documents again. Exceptions exist, for example, in the case of inheritance or within the context of corporate structures (e.g. merger of corporations), but even here, the legal requirements for the new owners or shareholders are usually checked by the authority. The provisions on non-transferability serve to protect public interests, particularly with regard to the reliability of the license holder.
What obligations exist after an operating license has been granted?
After an operating license has been granted, the license holder is legally obliged to comply strictly with all conditions and requirements associated with the granting of the license. This includes regular obligations to provide evidence to the competent authorities, such as submitting inspection reports, compliance with maintenance and safety standards, and proper documentation of business processes, if applicable. The licensee must obtain approval or notify the competent authority of any significant change to the business—such as a change of business location, type of operation, or responsible persons. Failure to fulfill these obligations may lead to withdrawal or revocation of the license as well as other legal consequences. Furthermore, many license-requiring businesses are subject to recurrent official supervision and inspection.
Can an operating license be limited in time or revoked?
Yes, the operating license can be limited in time as well as revoked. Authorities are generally authorized to issue operating licenses with a time limit if this is indicated by the nature of the business or special circumstances. Revocation of the operating license may occur if essential requirements for the license subsequently cease to exist, obligations are breached, or official requirements are not complied with. If the operation is not commenced within a certain period or is suspended for a longer period, the license may also expire. Revocation is formally announced by a withdrawal or revocation notice, against which the license holder can generally lodge an objection or file a lawsuit. Judicial reviewability is guaranteed in a constitutional state.
What legal options are available if an operating license is refused?
If an application for an operating license is refused by the competent authority, several legal remedies are available to the applicant. After receiving a notice of refusal, an objection can be lodged within a statutory period (usually one month). If the objection is unsuccessful, it is possible to bring an action before the competent administrative court. In these proceedings, the court examines whether the refusal was based on a legally sound basis and whether all procedural rules were complied with. In individual cases, it is also possible to file an application for interim legal protection in order to commence operations until a court decision on the license addition is available. It is strongly recommended to seek advice from a legally qualified expert (e.g. specialist lawyer for administrative law) in such cases.
