Chicago Business Licenses: PPA v PAV: What Is the Difference?

In Illinois, all businesses need to be correctly licensed. There are many different types of business licenses, and choosing the right one can be a challenge.

Two different licenses can apply to entertainment or performing arts businesses. The first is a Public Place of Amusement (PPA) license. According to the City of Chicago’s Small Business Center (SBC), a PPA license is required when a business seeks to “produce, present, or conduct any type of amusement.” This would include all venues charging an admission fee or requiring a minimum purchase to participate. This also includes venues with a capacity of 100 people or more, even if no admission fee or minimum purchase is required. A PPA license is similarly required for any business that rents out space for use by other entities who hold events or other amusements that are open to the public.

Examples of businesses that need a PPA license include:

• Live Theaters & Concert Halls
• Nightclubs
• Dance Clubs
• Sports Stadiums
• Movie Theaters
• Bowling Alleys
• Comedy Clubs
• Karaoke & DJs
• Businesses with two or more pool tables
• Businesses with three or more arcade games

Other businesses not listed here may still require a PPA license depending on the circumstances and the types of entertainment provided.

The second type of business license required for establishments wanting to provide live performances is called a Performing Arts Venue (PAV) license. The PAV is a special class of license created specifically for smaller theaters. City regulations provide that “any establishment providing live theatrical or other live cultural performances in a venue with an aggregate maximum capacity of 500 of all assembly spaces in the building” are required to obtain a PAV license. At the same time, regulations also state that the building capacity may be up to 1,000 people (of all assembly spaces combined) if the theater is not the building’s purpose. This would include venues or entities such as a church, school, or other charitable organization. Another restriction of a PAV license is that a PAV license holder cannot provide or offer live music.

But like most rules, there are notable exceptions to the license requirements for those business owners who want to include entertainment or performing arts as a small part of their regular offerings. There are certain situations in which neither a PPA nor a PAV license is required. These include:

• Venues that have a maximum capacity of 99 people and do not charge an admission fee or minimum purchase for any entertainment or amusement.
• Musical groups of 8 performers or less performing in a restaurant, hotel, or retail establishment with no admission fee or minimum purchase requirements.
• Banquet halls possess a retail food license that provides events that are not open or advertised to the public with no admission fee or minimum purchase requirements (such as a wedding or birthday party).
• Entertainment or amusement presented within a private club or lodge solely for its members and its guests.
• Health clubs, racquetball or tennis clubs, or similar clubs organized on a membership basis for the recreation of its members and guests.
• Businesses with no more than three automatic arcade machines.
• Businesses with no more than one pool table.

In this way, these exceptions allow for entertainment or performing arts activities and events within businesses and venues that do not exist solely to provide public amusement.

Knowing which business license is required for your activities is important. 1818 can help determine the correct license and work with the City to keep your licenses up to date.

The information in this blog post is provided for informational purposes only and is not intended to be legal advice. You should not make a decision whether or not to contact an attorney based upon the information in this blog post. No attorney-client relationship is formed nor should any such relationship be implied. If you require legal advice, please consult with an attorney licensed to practice in your jurisdiction.