How Many Business Licenses? Following the Supreme Court Ruling

How Many Business Licenses? Following the Supreme Court Ruling

"Globes" Israel's Business Newspaper
Tzvi Levinson and Gil Dror, attorneys May 2005

The Supreme Court has lately referred to the question which activities  a business license in one factory has to be applied for (Case no. 4270/03 State of Israel against Tnuva – collective center for marketing agricultural products in Israel Ltd.)

Here are facts of the Tnuva case: Tnuva owns a product distribution center including a trucks washing  device. The distribution center has a business license while the washing device does not have one, although it should if being a business of its own. Tnuva was charged for operating the washing device without a license. The court had to decide if this device needed a separate business license or whether the license for the distribution center includes a license for the operation of the washing device.

The court outlined  tests to determine if a business which is part of a bigger one requires a separate business license. This issue is relevant for many industrial plants. Many factories have gas stations, repair garages, fuel tanks for generators, waste water devices, garages for trucks or hazardous waste sites. Small/medium factories have a kitchen and catering services requiring also a business license. It is the factory’s duty to examine each activity separately in order to determine the need for a separate license according to the law of businesses licensing .

The ruling is not a simple thing for business owners who have to apply for several licenses for a business that can be considered secondary within the broader business they run. The Ministry of Environment is using the issue of business license as an enforcing tool and any practice that differs from the ruling might cause closure of a factory or criminal actions against its managers.  It would be better if this issue was settled by legislation instead of case law, but in the current reality in this article we advise managers  to examine each supporting device they have, according to the Tnuva tests, for determining the need for additional licenses for their business.