Trade License

Trade Licence is a license or permission issued by municipal corporation granting permission to carry on a particular business at the particular address. It ensures that the citizens are not adversely affected by health hazard and nuisance by the improper carrying of trade. The provision of trade license is laid down by the State government in order to monitor and regulate the trade within a city. It is issued by the municipal corporation of the place where business is located. It is basically a permission to carry on trade or business at the premises for which it is issued. An unauthorised trade is an offence. Setindiabiz helps you to obtain trade license..

Trade License

  • Trade license is the way to regulate any person to carry out any specific business from a particular locality. It is regulated to ensure that the citizen is not adversely affected by Health Hazard & Nuisance by the improper carrying of a trade. The trade license is a means to ensure that the manner and locality in which the business is being carried on is according to the relevant rules, standards and safety guidelines.
  • Trade licence is regulated by State Government through their municipal corporations State Act. Some state has made it mandatory and in other states it is optional. The fee for Trade License is also different in different states. Some cities collect a business license fee on an annual basis, some even receive a percentage of the business gross sale. Delhi Government has recently relived the MSME from the compulsion of getting a trade license.
  • The objective of Trade License is control business locations by way of putting constraints on people from running certain types of businesses from their home to maintains the separate business environment and preserves locality environment.
  • One must apply for a trade license within 15 days of starting a business but in some states, it must be applied 3 months prior to the start of an activity. Licenses are issued by the authorised department of a municipal corporation in consultation with other specialised departments like a fire brigade, health, engineering.
  • Trade License imposes a number of specific responsibility on the entrepreneur in the failure of which, an authority may impose the heavy fine.

The Minimum Criteria for getting a Trade Licence is:

  • Person seeking TL must have completed 18 years of age.
  • The business must be capable of performing legal work.
  • The person must have a clean criminal record.

Documents Required for Trade Licence

  • Lease Agreement in case of premises is on lease/rent.
  • Occupation Certificate for premises as commercial building.
  • NOC from Fire Department.
  • Municipal tax receipts
  • Registration Certificate from either of the following District Industry Centre/state Industrial Infrastructure Development department/Shop and Establishment.
  • Photograph, ID & address proof of the manager of the premises as well as authority letter in his favour.
  • ID proof of applicant ( In case of Company It is the PAN card & Certificate of Incorporation)

As per Trade category, Three Kinds of Trade Licence are Issued

Type A :- For businesses of consumable products and eating houses.

Type B :-Trades using motive power to run and to manufacture, like industries, workshops, power rooms, flour mills, cyber cafe etc.

Type C :- It is required for Offensive and dangerous trades like charcoal depot, sale of fire wood, timber wood etc.

  • Trade license registration is often a time consuming and expensive process as it may be the case that setting up a single business requires multiple types of licenses, depending upon the sector, type of business ownership, a number of employees...etc. Localised licenses are often required in different geographical units with respect to the various taxes imposed on such units.
  • Before entering into business, the first step should be to check out about the licensing requirement and the application procedure. This will save both money and time. If one fails to comply the licensing and permission requirement specified for that locality, you would have to face the complicated situation for your business.