Registration of Trade License

What is a Trade License?

Trade License is permission to carry on a specific trade or Business at the premises for which it has been issued.it is regulate specific business to ensures that the citizen is not adversely affected by health hazard & Nuisance by the improper carrying of a trade.

Trade License is a document/certificate that gives permission to the applicant to commence their particular trade or Business in a particular area or location. It was issued by the municipal authority is exclusively for trade or business.

Trade license prevents you from being penalized. Carrying out business without procuring a trade license is an offense in India. This also ensures ethical business practice is performed by the traders as they have to follow safety measure and guidelines.

This license is given permission to a person to carry out a particular business or trade.it is mandatory under the law to get the trade license to make sure that the person is not carrying out any unethical Business practices and is following the rules and safety guidelines as issued by the government from time to time.

Trade License is mainly required for an establishment like Hotel, restaurants, canteen, food stall, manufacturing industries, cyber café, etc.

Why Trade License Required?

Every legal business and service activity, one needs to have a Trade License. It is being made necessary by the government to carry out any particular trade or business in a particular area to ensure that no one is carrying out any unethical business practices. This License creates harmony in a society that every business is following the rules, guidelines, and preventing safety measures.

Who can Issued Trade License?

Every Trader engaged in a general tradings activity within the territorial limits of any municipal corporation is required to obtain a trade license the class of trade license differs from state to state and is based on the Nature of the business.

The trade license is issued by the licensing department of the municipal corporations in various fields like industries, engineering, health, etc.

Different Category of Trade License

1. Industries  License: Small, medium, and large scale manufacturing factories
2. Shop License: Dangerous and offensive traders like a sale pf firewood, cracker manufacture, candle manufacture, barbershop, dhobi shop, etc.
3. Food establishment License: Restaurants, hotels, food stall, canteen, the sale of meat & vegetables, bakeries, etc.

Eligibility of Trade License

• The applicant must have crossed the age of 18 years
• The applicant must not have any criminal records
• Businesses must be legally permissible.
• It is only obtained on commercial premises

Documents Required for Trade License

• If an applicant is any firm/LLP or company, their Pan card along with Certificate of Incorporation
• Canceled cheque and bank statements of the establishment.
• MOA and AOA, Certificate of incorporation of the company or LLP, partnership Agreement.
• In case of Individual applicant, his/her Pan card and Aadhar card is mandatory
• Latest municipality Property Tax Department receipts
• Lease documents and consent for the owner of the property
• NOC from the neighbor
• A certified layout plan of your trade Building showing business, working or washing or resting
• Sanction Plan
• Occupancy Certificate(OC)

Documents Required for Trade License Renewal

•  Original Copy of the trade license
•  Previous years challan
•  Up to date property tax paid receipt.

When should License be Acquired?

Every Business entity planning to start running their business operations shall be required to obtain the license within 15 days of the commencement of any activities. The activity consists of manufacture, storage, exchange of any commodity. In some states, it is mandatory to apply for this license 3 months prior to the commencement of any business entity.

Benefits of Trade License

Legal Entity :

Trade License is essential for any business to be considered as a legal entity.

Follow up of Rules and Regulations :

As agreed in the application to obtain the license, the business has to follow all the rules, and regulations laid down by the municipal corporation. Rules or regulations in relation to the issuance of trade license varies to the state to state.

Goodwill

A business granted with this license will enjoy greater goodwill than an unregistered entity and subsequently attracts more customers and investors.

Importance Point before Apply for the License

1. An application has to make before starting running the business.
2. Renewal of application must be filled in 30, working days before the expiry of the license.
3. Once the license issued and it has to be maintained on an annual basis.
4.  It is only valid for one year.
5.  The fee structure for the issuance of the license differs based on the nature of the business.

FAQs

What is Trade License?

A Trade License is permission to carry on a specific trade or business of the premises for which it has been issued.the business owner must apply for a trade license if required in a particular area without any delay.

When did Trade License Applied?

Trade License can be applied before the commencement of the activity.it is mandatory to apply for this license 3 months prior to the commencement of any business entity

Who can issue a trade license?

it is issued by the municipal corporation in various departments like industries, engineering, health, etc.

What is processing time for trade license?

It generally takes 7-10 days’ time to process the application of trade license in urban cities while In Rural areas and small, it takes a longer time.

What is the eligibility for trade license?

• The applicant must have crossed the age of 18 years
• The applicant must not have any criminal records
•  Business must be legally permissible.
•  it is only obtained on commercial premises

It is compuslory to renew a trade license?

Yes it is mandatory by the government to renew the license before 30 days expiry of License