If you are planning to start your business, Trade License is a must requirement. Trade License is a certificate evidencing that the owner is permitted to commence the company in a particular region or area. Trade License and its issuance are regulated through Municipal Corporation Acts by State Government to ensure that the general public is not affected by trade or business and there is no health hazard to the safety of consumers and the public.
The government has made it compulsory to obtain a valid trade license before starting any business in India to ensure that no one is indulged in carrying unethical business. This license is evidencing that every business established in a particular area, adhere to the relevant rules, regulations, and guidelines as well as it obeys safety measures and standards.
Trade License is issued by the Authorized Department of Municipal Corporation in consultation with other specialized departments such as health, engineering, brigade, etc. having jurisdiction over the business. We have discussed in detail henceforth about Trade License and procedure to obtain the same.
Categories to obtain Trade License
These are three categories under which Trade License is issued in India:
Industrial License: This License can be applied by the manufacturing unit irrespective of its size such as small, medium or even large scale manufacturing industries.
Shop License: This License is obtained by the business involved in relatively dangerous and offensive activities such as cracker manufacturing, sale of firewood, candle manufacturing, barbershop, etc.
Food License: Applicant can apply for this license if they are planning to indulge in activities such as restaurants, canteens, food stalls, bakeries, food trucks, selling of meat or vegetables, etc.
Eligibility to obtain Trade License
For obtaining the trade license, the applicant shall meet the following eligibility criteria:
The applicant shall be of the age 18 years or more
There should be no past criminal records or criminal proceedings against the applicant
Business activity and the proposal shall be within the legal boundaries and must have been legally accepted.
Procedure to apply for Trade License
Following is the procedure to get Trade License in India:
Visit the official website to apply online for trade license
The applicant shall register online by creating user-id and password
Fill the completed form with all the necessary details and mandatory documents attached
Once the application is submitted and the payment of online fees is made, the necessary authority shall verify the application
Upon scrutinizing the application, authority, if found correct and completed, shall give the license to the owner of the business
It takes approx 7-10 days to process the application in metro cities however in small or urban cities; it takes minimum possible time
Documentation
Following documents are attached with the application of Trade License:
Application form
PAN in case of the applicant is firm, LLP, or company
If the applicant is individual, his Aadhar card will be required
Municipal property tax payment receipt
Lease Deed or Rent Agreement in case the premise is not owned. Also, NOC from the landlord will be required in such a case
Katha extracts and certificate
Sanctioned plan or layout of the premise
Occupancy certificate
Renewal of Trade License
Trade license issued remains valid for one year from the date of issue and shall be renewed every year. In India Trade licenses are renewed from 1st January to 31st March every year. Within 30 days of the expiry date of the original license, the applicant shall apply to the concerned department for its renewal. If the applicant fails to apply the same on or before the due date, it can attract a heavy penalty or fine.
For renewal of trade license, following documents need to be submitted to the concerned authority along with renewal application:
Original Trade License
Challan and bills of the preceding year
Receipt of Property tax paid up to the date
Summary
Some certain other rules and regulations need to be adhered to by the registered business owner. Furthermore, legal actions can be initiated against the defaulter. Therefore to avoid the damages or penalties, you can contact us so that our team of experts can guide you completely and you can carry on the business without any interruption. Corpbiz