A trade license is a document or certificate that allows the applicant to commence a particular trade or business in a specific area or location. The holder of the trade license cannot use it for any other work or business.

A business within a state, corporation, or municipality will require trade license registration from the concerned central or state government to commence with any business in a particular area or location. To obtain registration, the applicant must first understand the jurisdiction under which they are operating the business and the applicable Act.

Eligibility for a Trade license

• The applicant must have crossed 18 years.
• The applicant should not have any criminal record.
• The type of business must be legally permissible.

Documents required for obtaining Trade license registration

To apply for a trade license, the applicant must make an application and submit the following documents to the concerned municipal authorities.

• Application in the prescribed form]
• PAN Card along with the incorporation certificate if the applicant is any firm, LLP, or company.
• Aadhar is mandatory in the case of an individual applicant.
• Latest Municipality property tax payment receipt
• Lease documents or consent letters from the owner of the property.
• NOC from an immediate neighbor
• A certified layout plan of your trade building showing the business
• Sanction plan
• Occupancy certificate

Who issues the Trade License?

The trade license is issued by the various departments of the municipal corporations like industries, engineering, health, etc.

The government of India authorizes the licenses in a manner to regulate in cities across the country. The license issuance differs from state to state depending on the local government agencies (Municipals) rules and regulations.

Different categories 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.

Important aspects related to Trade License

Application

Trade License registration application must be made to the concerned state government or corporation, or municipality. The procedure for the application would differ based on the state regulations.

Verification

In some states, the trade license is issued only in person after the verification from the concerned authorities.

Processing Time

It takes around 10-15 days, subject to government processing time. This certificate can be downloaded online after approval.

Validity

Trade licenses are issued with a validity of 1 year in most states. Trade licenses can be renewed at the end of each year by paying the renewal fee.

Penalties

There are various provisions, rules, and regulations required to be followed by a registered person if he fails to comply with the registration requirements of the trade license and commencing any trade activity before the issuance of this license.

Further, legal action can also be taken against the defaulter.