Trade license: Thing you needs to know

calendar09 Aug, 2020
timeReading Time: 4 Minutes
What is Trade license

Trade license is a must-have requirement for every business entity that aims to generate profit through its operation. Businesses that strive to operate without this license might encounter significant penalties imposed by the municipal corporation. In general, a trade license is compulsory, and it must be availed within 30 days from the commencement of the business.

For the last four decades, the municipal corporation under the State authority engaged with the issuance of trade license. Anyone who wishes to avail such license has to approach the municipal corporation with a prescribed application form annexed with mandatory documents. After obtaining this license, it becomes mandatory for the business to operate within prescribed guidelines and have to put illegal activities out of the equation.

Trade license

Objectives behind the issuance of trade license

Trade license is generally issued to the following aspects.

  • Rectify the unethical practice of trade and compliance within the organization.
  • Eliminates the illegal business activities.
  • Ensure proper sanitation protocol for the employees within the organization.
  • Stop people from converting their residential area into a commercial premise to conduct business activities.

Who can avail Trade license?

  • The applicant should be 18 years old.
  • The applicant should not have any past or ongoing criminal record whatsoever.
  • The business should fit into the legal framework.

Read our article:Penalty for Violating the Trade license in India

Trade license fees: Evaluating criteria

Unfortunately, the fees and the provisions for obtaining such licenses vary from state to state, which often triggers confusion among those who want to obtain it.  For instance, if you wish to avail this license in the Delhi region, your license fee would be evaluated based on the area of the business premises rather than the number of employees. Alternatively, if you are operating in other states, you may have to encounter different fees provisions. Hence, it becomes important for you to become accustomed to necessary details before you rush to the authority to avail of the trade license.

Trade license obtainment procedure

  • Login to municipal corporation portal
  • Fill up the application form and upload the scanned copy of the requested documents.
  • The application will then forward to the SI (Sanitary Inspector) of the concerned division. The confirmation of the same will be sent to your registered mobile via SMS.
  • Next, the authority arranges an on-site inspection of the business premises on the given date to evaluate the license fee. The investigation will be conducted under the supervision of the inspector. 
Note:The inspector would take different traits into the account for the fees evaluation,, such as an area of the premises, production volumes, and lease details.
  • The inspection report will then forwarded to the sanitary officer of the concerned divisions. After reviewing the report, the officer might issue another order of on-site inspection. Alternatively, if the report comes out to be legitimate, it will be sent to the municipal corporation’s commissioner.
  • As soon as the commissioner authenticates the report, the authority will forward the demand notice on its portal.
  • After downloading the notice, the applicant must complete the online payment formalities on the portal itself.
  • Upon receiving the requested fees, the portal will generate the applicant’s downloadable version of the certification.

Must-have documentation for obtaining the Trade license

  • Identification proof such as PAN, DL, or Aadhaar card.
  • Address proof of the applicant: Aadhaar card, passport, and utility bill.
  • Property documents regarding the business premises
  • The lease agreement of the property of the business premises.
  • Floor plan of the property on which the business will be conducted.
  • Receipt regarding the tax payments. 
  • Certificate of occupancy.

Trade License: Renewal, Validity, and Cancellation

Generally, Trade License remains valid for one year and could be raised again by completing the renewal process online. The applicant seeking license renewal needs to submit an application within 30 days of the expiration. Those who refuse to comply with these conditions may have to bear significant penalties prescribed under the law. In worst-case scenarios, the authority can also cancel the trade license of a business owner. Documents regarding the renewal are as follow:

  • Scanned copy of the Trade License
  • Challans of the previous years
  • Recent tax receipt of the property.
Note: Authority rolled out the renewed license before the end of the financial year. The renewal application would be available to the business owners from the 1st of January.

Before we conclude this article, let summarize what we have learned so far:

  • The Municipal corporation is the governing body that issues the trade license to the business owners.
  • The fee for trade license is not common pan India.
  • Such a license expires in one year.
  • The renewal of this license should be done before the end of the financial year on the portal of the respective municipal corporation.
  • Conducting unethical business practices is prohibited under a trade license.


We can conclude that a Trade License is hugely vital for the survival of the business entity who wants to operate within the legal framework[1].  The applicant need not go through the complicated procedure to avail this license. All they need to hop onto the online portal, fill up the application, and upload the scanned copy of the requested documents. It is as simple as that.

Sometimes, the applicant often runs into some complications while filling up the application on the online portal. If you want to avert those constraints altogether, give a call to CorpBiz’s helpdesk. Here you can avail exquisite support on financial, taxation, and compliance-related affairs from experienced professionals. If you really want to avert the chances of cancellation of your application, be sure to connect with CorpBiz today.

Read our article:Step By Step Guide For How to Apply Trade License Online

Request a Call Back

Are you human? : 7 + 2 =

Easy Payment Options Available No Spam. No Sharing. 100% Confidentiality