A trade license is a document/certificate that gives the permission to the applicant (person seeking to open a business) to commence a particular trade or business in a particular area/location. However, the license does not allow the holder to any other trade or business than for it is issued. Furthermore, this license does not pass on any kind of property ownership to the holder of the license.
It has been made necessary by the government to carry some particular business or trade in a particular area and to ensure that no one is carrying out any unethical business practices.
This license was made obligatory to make sure that the government can regulate various trade activities in the country. The core objective of issuing a this is to control the locations by restricting the people from executing certain types of businesses from their home location to maintain the business environment and locality environment.
Trade license is issued by the licensing department of the municipal corporation in various departments like industries, engineering, health etc.
The issuance of the license varies from state to state depending on the local government agencies (Municipals) rule and regulations.
Kinds of Trade License
- Industries license: small, medium and large scale manufacturing factories
- Shop license: Dangerous and Offensive trades like a sale of firewood, cracker manufacturer, candle manufacturer, barber shop, dhobi shop etc.
- Food establishment license: Restaurants, hotels, food stall, canteen, the sale of meat & vegetables, bakeries etc.
Eligibility for a 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.
Documents required to be submitted for Trade License
In order to apply for a trade license, the applicant is required to make an application and submit the same to the concerned Municipal Corporation along with all the necessary documents.
There are different documents that required to be provided depending on the type of business intended to carry on.
- Application in the prescribed Form
- If the applicant is any Firm, LLP or a Company, their PAN Card, along with the incorporation certificate.
- In the case of an individual applicant, his/her Aadhaar Card is mandatory.
- Latest Municipality Property Tax Payment Receipt.
- Lease documents or consent letter from the owner of the property.
- NOCfrom your immediate neighbour
- A certified layout plan of your trade building showing the business, working or washing or resting areas
- Katha extracts
- Katha certificate
- Occupancy certificate (OC)
It takes approx7-10 days time to process the application of Trade license
Trade license Renewal
Statically, trade licenses in India are renewed in between January 1st to March 31st. The validity of a license issued by the municipal authority is for a period of one year and required to be renewed every year.
The application for renewal of the license is to be made within thirty days from the date of its expiry. In case the renewal process is delayed, then it may attract fine depending upon the rules and regulation of the issuing authority.
Following are the documents that need to be submitted for renewal of the license–
- Original copy of the trade License;
- Previous year challans;
- Up to date property tax paid receipt.
There are various other provisions, rules, and regulations that are required to be followed by the registered person. In case of failure to comply with the registration requirements of trade license and commencing any trade activity before the issuance of this license, the person in the default will be liable to pay prescribed penalty. Furthermore, legal action ca