Governmental authorization: Overview, definition and example
What is governmental authorization?
Governmental authorization refers to the official approval or permission granted by a government or regulatory body that is required for certain actions, transactions, or operations to be legally valid. This could involve permits, licenses, or certifications that must be obtained before conducting specific business activities, such as starting a business, making investments, or engaging in regulated industries.
Why is governmental authorization important?
Governmental authorization is important because it ensures that businesses and individuals comply with local, state, or national laws and regulations. It helps prevent legal issues, fines, and penalties that can arise from operating without the necessary approvals. Additionally, obtaining the proper authorization ensures that the business is operating within the legal framework set by the government.
Understanding governmental authorization through an example
Imagine a company looking to open a new manufacturing facility. Before they can begin construction, they must apply for and receive environmental permits from the local government to ensure that the building and its operations comply with zoning laws and environmental standards.
Similarly, a company that plans to import goods may need governmental authorization in the form of customs clearance or an import license before they can legally bring products into the country. Without these authorizations, they could face fines, penalties, or the seizure of goods.
An example of a governmental authorization clause
Here’s how a governmental authorization clause might look in a contract:
“The parties agree that this Agreement is contingent upon the receipt of all necessary governmental authorizations and permits required to perform the obligations set forth herein. If such authorizations are not obtained within [specified time frame], this Agreement shall be terminated without liability to either party.”
Conclusion
Governmental authorization is a crucial aspect of business operations, ensuring compliance with relevant laws and regulations. Understanding when and how to obtain necessary permissions helps businesses avoid legal complications and maintain smooth operations.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.