Trade License

Mostly persons in today’s time want to start their own business. If anyone is planning to start a business, they will need a Trade license before begin of business. Trade License validates the ability of a person to perform certain activities. Tax and Services provides you simple and easily understandable information related to Trade License.

Trade License is a license issued by the Municipal Corporation that gives the permission to the applicant to commence or start a particular Trade or Business in a particular area or location. Trade License is an important and mandatory registration required to start a business in India. It is needed by a trade or business in order to legally carry out various operations or activities.

The Primary Objective of issuing Trade License is to control the businesses thriving in an area. It is regulated to ensure that citizen is not adversely affected by Health Hazard and Nuisance by improper carrying of a trade. The means of providing the Trade License is to ensure that the manner and locality in which the trade or business is carried on is according to the relevant rules, standards and safety guidelines. Trade License is also needed if you are applying for credit or capital for your business and if you want to open a business checking account.

Trade License is only good for the activity it was originally granted for. This License is a permission to carry on a specific trade or business at the premises for which it has been issued. This License does not provide any special permission to carry out an activity or business operation other than the one it was issued for.

Categories of Trade License

Various Categories of Trade License issued by the government are as follows:-

§  Shop License

 Shop License issued to various types of businesses like manufacturers of toys, candles, crackers, dhobi shops and barber shops, so that they are able to perform various activities of businesses from a particular locality.

§  Industries License

Industries license is a type of License that is issued for Small, Medium and Large Industries and Manufacturing Units.

§  Food Establishment License

 Food Establishment License is issued to Bakeries, Canteens, Food Stalls, Restaurants, Hotels and Sale of Meat and Vegetables etc. to carry on their trade.

Eligibility for a Trade License

·       The Age of Applicant must be at least 18 years

·       No Criminal Records found under the name of applicant

·       Business or Trade must be legally permissible

·       Application needs to submitted before 30 days from the start of Business

Documents Required for Trade License

Documents that are needed for Trade License are listed below:-

Ø  Application form

Ø  Pan Card of the establishment in case of Company, Firm or LLP

Ø  A Cancelled Cheque or bank statement of the Establishment

Ø  Certificate of Incorporation, MOA and AOA

Ø   Establishment’s Premises Proof in the form of Sale deed, Electricity bill/ Water bill and NOC from Owner

Ø  Color Photograph, ID Proof, PAN Card and Address Proof of all Directors and Partners

Ø  Front-facial photograph of the establishment with the display of goods traded from the premises

Ø  Key plan and Occupancy Certificate

Procedure for Application of Trade License

     Procedure for the application of Trade License is very easy. To apply for trade license, applicants of trade or business are required to visit the official Website of their Specific state and fill in the Application form.

     Once the Application form is filled and submitted along with required documents, the specified Municipal Corporation of that particular state will verify and approve the loan application if satisfied with all documents.

     Applicants check their status online by entering the application number with the registered mobile number using official website of their state.

     Generally the Application gets processed within 7-10 days in major cities and bit longer in small cities.