The Traffic Commissioner for Scotland said she "doubted the repute" of Happy Days Out of School Care owner Gillian Geddes and whether she could be trusted to operate vehicles.
The company transported primary school children between schools and two childcare centres before and after classes.
Commissioner Joan Aitken refused the firm a transport licence after discovering it had operated vehicles unlawfully despite Mrs Geddes being told in 2016 she needed a public service vehicle operator licence.
She said: "She chose to take a chance and try to get away with not having a licence."
"Her behaviour imperils her repute and I was singularly unimpressed by her seeing herself as some sort of victim, pulled out.
"She is no victim other than the victim of her own decision to ignore the advice from the Driver and Vehicle Standards Agency to get a licence.
"I have a doubt about her repute and whether she can be trusted with an operator licence."
Miss Aitken said: “Given that her business is engaged in the transportation of children as part of its service to parents, it is to the public good and in the interests of public safety that examiners did select her vehicles and operation that day.
“Parents of children do not expect their children to be transported in a vehicle which has not had an MoT test and they expect proper licensng of business and drivers.
“This is another example of a business which to the customer will appear friendly and competent but which has been lacking in meeting road safety requirements.”