Trade License Registrations – Things you must know

Trade License Registrations – Things you must know

Do you want to run your business smoothly? Then, you need to get the trade license. Getting trade license is compulsory in law, and all businesses without it considered illegal. And people without such licenses need to pay huge amount as penalty based on their nature of business.

Getting trade license is mandatory in India as it is way to control business locations. This license put constraints on those people who run some sort of businesses from their home. By getting this license, a trader ensures to maintain separate environment for his business and preserves the environment of the locality.

What is a trade License?

All business organizations needs a trade license from the concerned authorities, be it the state government or the municipal corporation to operate their business. For getting this license, the trader or business needs to adhere to all the rules and regulations laid down by the municipal corporation as well as the safety authorities of the particular state. This legal document is the way to regulate a particular business from a specific locality. By getting this license, you are permitted to carry on a particular business or trade at the premises for which it has been issued.

Why trade license registration is important?

Trade license is a legal agreement that issued by the license department of a municipal corporation in order to allow you to operate a business in a particular area. The government authorizes this license to regulate business in domestic and international cities. They regulate the specific business from a particular locality by issuing trade license. It is way to ensure that a particular business or trade not adversely affect the health of the people in a particular area or affect the environment.

When and why trade license introduced?

Trade licenses in India are regulated by the municipal corporations under various state governments. This legal document was introduced in the country nearly forty years ago. Issuing a trade license is a way for the government to check and verify whether a particular trade or business is following all the laws and guidelines applicable to it. They can easily detect businesses or trades that follow unethical business practices and prevent them by issuing trade licenses.

The different types of trade license available

Different types of trade licenses are issued by the Government of India based on the type of business or trade carried out.

• Shop License: People who want to open a shop require a shop license.
• Industrial License: You need an industrial license if you want to open a small or mid-sized industrial unit.
• Food Establishment License: For people who want to get into the food and beverage industry requires this license. You need this license to start a cafe, restaurant, bakery, vegetable shop, and a meat shop.

When you need to apply for a trade license

A business owner needs to apply for a trade license 30 days before the commencement of his business. He cannot start operations of the business without this license. If you are denied a trade license for any reason, you can submit a petition to the Standing Committee. Ensure to submit a copy of the denial letter along with the petition.

Documents required for Trade License Registration

The municipal corporation under the respective state government where your business has registered checks the required documents and issue trade license to carry out the business operation. The documents required for this legal document vary depending upon the kind of business you intend to set up. The following are the documents required for the registration of a trading license.

• PAN card with incorporation certificate for companies, firms and LLP’s
• Aadhaar Card in the case of individuals
• Recent Municipality property tax payment receipt
• NOC from your next door neighbor
• Lease document or Letter of Consent
• Duly filled form 353
• Require an authorized layout plan of the trading building with all rooms showcasing
• Sanction Plan
• Khata certificate
• Khata extract
• OC or Occupancy certificate
• Any documents demand by the Ward officer at the time of registration

Eligibility for applying to get a trade license

• The person who apply for the trade license registration must be more than 18 years of age
• Person must not have any criminal records
• His or her business proposal must be legally acceptable

Procedure for trade License Registration

All the documents required for the registration of trade license need to be submitted t the ward office the local municipality in your area. You need to duly filled form 353 with all the required details for the registration of trade license. The applicant must be ready to submit additional details as per the demand of the authority. Once you apply for the license with all the required documents in the correct format, it will be issued within 7-10 days in metropolitan cities. It may take more than a month if the documents that you provided are not filled according to the rules and regulations of the issuing authority.

Validity of a trade license and its renewal

A trade license issued by the concerned authority will be valid only for one year. Trade owners need to renew it every year. The application for renewal required to be made within 30 days of its expiry. Otherwise, you need to apply for a fresh license. A business or trade owner needs to submit the following documents for the renewal purposes:

• Your original trading license
• Challans of previous year
• All tax receipts including the receipt of the property tax paid

Non Compliance of Trade License

Trade license registration is mandatory for commencing any business. If you failed to get this legal document before commencing your business, you need to face legal formalities or liable to pay the penalty.

Each business in India needs a trade license to start a business in order to safeguard the public at large against the health hazard and other issues caused by a business or a trader. In fact, it is a way to regulate the trade and check whether the trade or business complies with the safety guidelines and rules issued by the government.

Every trader needs to obtain a trading license if he or she engaged in a general trading activity within the territorial limits of any municipal corporation. Businesses or trades can obtain this license only if it is run in the permitted area. The trade licenses are issued to businesses based on their nature. And the class of it can be varied from state to state.