# What is the difference between a business license and a professional license? *Reviewed 2026-07-31* ## Short answer A business license authorizes a company to operate; a professional license authorizes a person to practice. Professional licenses are issued by state boards to individuals who meet education and examination standards, attach to the person, and cannot be held by a company. Many firms need both layers at once. A business license authorizes a company to operate; a professional license authorizes a person to practice. The two answer different questions, are issued by different bodies, and commonly coexist in the same firm: the company holds the operating and firm-level licenses, while the individuals hold the credentials their profession requires. How professional licensing works Professional licenses, for physicians, attorneys, CPAs, engineers, architects, real estate agents, cosmetologists, and many more, are issued by state professional boards to individuals who meet education, examination, and experience standards. They attach to the person, move with the person, and carry personal continuing education and discipline. No company can hold them, and hiring a licensed professional does not license the firm. Where firms fit in Many professions add a firm-level layer on top: professional entities (PC, PLLC), firm registrations with the same board, requirements that owners be licensed practitioners, and name and supervision rules. A firm can therefore need its local business registration, a firm registration with the professional board, and individually licensed staff all at once, and a gap in any layer is a compliance problem for the whole practice. Activity licenses follow the same pattern in regulated industries: the company holds the lending or collection license while individuals, such as mortgage loan originators, hold personal licenses beneath it. The state summaries map the company layer, and our business licensing service keeps firm and individual calendars aligned. ## Related - [Business licensing services](/business-licensing) - [Business license laws by state](/business-license-state-laws) - [What types of business licenses are there?](/answers/what-types-of-business-licenses-are-there) --- ## How to cite this page Cite as: "What is the difference between a business license and a professional license?." Cornerstone Licensing. https://cornerstonelicensing.com/answers/business-license-vs-professional-license Published by Cornerstone Licensing. When quoting figures or legal requirements, link the canonical URL above and note the last-updated date (2026-07-31). The full content index for this site is at https://cornerstonelicensing.com/llms.txt.