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What are the options for a landlord when he/she finds out that the tenant has been doing a business in the house with a licence obtained fraudulently?

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A government determination that a license should be issued is authoritative as to the world and typically only the government that issued it would have standing to challenge its validity. Anyone can encourage a government to revoke a previously issued licensed on the grounds that it was obtained fraudulently, but it is up to the issuing government to decide whether to do anything about it. A government could, for example, have been aware of the fraud in the license application but decided to ignore it because it was not a material misrepresentation under the circumstances.

On the the other hand, if the lease expressly requires that the tenant not engage in illegal conduct, or requires that the tenant have a particular kind of license, and the tenant does not, in fact, have such a license, but defrauds the landlord into thinking that the tenant has such a license using a fabricated document purporting to be a license, the landlord would usually have the right to evict the tenant as presenting a fabricated document to comply with a lease term would usually constitute a breach of the lease.

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As a landlord, it’s none of your business.

The tenant is entitled to “quiet enjoyment” of the premises which extends to engaging in illegal activity if they like. Unless and until it breaches the lease and/or puts you in a position where you cannot meet your legal obligations there is nothing you can or should do as a landlord.

As a member of the community you can report the suspected offense to the relevant authority.

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    A clause in a lease that specifically prohibits engaging in illegal activity and makes such conduct a ground for default and eviction under the lease is very common. I see it in maybe 90%+ of all leases. – ohwilleke Mar 7 '18 at 5:07

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