A trade license is an approach to regulate specific businesses in a specified location. The State Government is the one who issues it. A trade license registration online is an easy process and authorises the conduct of a specific trade or activity at a particular location.
It does not guarantee property ownership and is not permitted to engage in any other business than that for which it issues.
However, anyone who needs a trade license must apply for company registration first.
The application for trade license registration online must be submitted within 30 days of the business’s start date.
Advantages Of Getting A Trade License
Legal Entity: A business must have a trade license to be deemed a legal entity.
Rules and Regulations: As indicated by the municipality in which the business is located.
Standard: A Trade License is a standard of competence that allows a company to operate in a commercial environment without fear of being shut down. It demonstrates the business’s and entrepreneur’s confidence and expertise.
Eligibility to Apply For A Trade License
The following are the requirements for applying for a trade license registration online:
- The applicant must be at least 18 years old.
- There should be no criminal records on the candidate.
- The company should be legally registered to operate. Therefore, apply for company registration before trade license registration online.
Why do you need a trade license?
- Trade licenses have been implemented in the country throughout the previous forty years, and they are regulated by state governments through municipal corporation statutes.
- This ensures that no one is harmed in multiple ways as a result of a trade or business’s nuisance and health danger.
- The government has made it mandatory to conduct any certain business or trade in a specific location and to ensure that no one is engaging in unethical business activities.
- This license promotes societal harmony by ensuring that all businesses follow necessary regulations, norms, and safety precautions. This license is mandatory so that the government could regulate the country’s different trading activities.
- The major goal of issuing is to safeguard the business environment and locality environment by preventing persons from conducting specific types of activities from their home location.
Who has the authority to issue a trade license?
The municipal corporation’s licencing department issues the trade license in numerous departments such as industries, engineering, and health.
The license is authorised by the Indian government to regulate in cities around the country.
It grants authority to carry on any business or trade in which it is located by letters or documents/certificates. The license issues differ in each state, depending on the rules and regulations of local government bodies (Municipals).
Types of Trade License Registration Online
- Small, medium and large-scale manufacturing factories require a license.
- Shop license: Dangerous and offensive trades such as firewood sales, cracker and candle manufacturing, barber and laundry (dhobi) shops, and so forth.
- Restaurants, hotels, food stalls, canteens, meat and vegetable sales, bakeries, and other food establishments require a food establishment license.
Documents needed for Trade License Registration Online
The following documents are mandatory to apply for a trade license:
- Proof of the business ID’s address Aadhaar card proof of the applicant
- In the instance of a sole proprietorship, the individual’s PAN is used, otherwise, the firm’s PAN is used.
- In the case of corporations, the Memorandum of Association (MOA) is mandatory.
- Certification of incorporation (in the case of corporations)
- If the premises are owned, a recent municipal property tax receipt. Otherwise, a lease contract or consent letter from the owner of the property, where the business registers.
- The neighbours’ NOC (nearby property owners)
- The office layout plan has been certified.
- The trade license can apply online or in-person at the local municipal government.
Time for Trade License Registration Online
Processing time: In metropolitan cities, a trade license must be obtained in 7-10 days. However, if documents do not fill out correctly, it can take up to 35-40 working days.
In other small cities and rural areas, it must be secured within 30 days of the start of operation.
Important points: Before you start your firm, you must apply for a trade license. Renewal applications must submit 30 working days before the license expires. Once it issues, it must renew on an annual basis.
Frequently Asked Questions
1. What is the difference between a business license and a trade license?
A trade license is a document/certificate that allows an applicant (someone who wants to begin a business) to start a specific trade or business in a specific area/location.
However, the license does not authorise the holder to engage in any other trade or business than that for which it was issued.
Furthermore, the holder of this license does not acquire any type of property ownership.
2. What is the purpose of obtaining a trade license?
Trade licenses have been implemented in the country throughout the previous forty years. Moreover, they regulate under state governments through municipal corporation statutes.
It ensures that no one harms in multiple ways as a result of a trade or business’s nuisance and health danger.
In fact, the government has made it mandatory to conduct any certain business or trade in a specific location and to ensure that no one is engaging in unethical business activities.
This license promotes societal harmony by ensuring that all businesses follow necessary regulations, norms, and safety precautions. This license is mandatory so that the government could regulate the country’s different trading activities.
Renewal of a Trade license
In India, trade permits typically renew between January 1st and March 31st. The validity of a municipal authority-issued license is one year, and it must be renewed every year.
The renewal application must submit within thirty days of the license’s expiration date.
If the renewal process delays, the issuing authority’s laws and regulations may apply, and a fine may impose.
The following are the documents that are must for renewal your license:
- An original copy of the trade license
- Challans from the previous year
- A receipt for the most recent property tax payment.