The word "licentia" itself translates from Latin as "freedom" or "liberty." Consequently, for a business, it's a document that gives you the right to conduct your business activities in the state, county, or city for a certain period of time. For example, it might be a gun or liquor license. Licenses should not be confused with permits since these are two different concepts. The former are issued at the state or federal level; the latter are issued at the state, county, or town/city level. Also, the former often has a longer validity period.