Overview of Trade License
A trade license refers to a legal document that renders a permit to the applicant (individual seeking to set up a business) to start a specific trade or business in a particular locality/area. It ensured that the trade or business was performed by complying with all the relevant safety provisions as rolled out by State Municipal Corporation. It safeguards the residents from being hampered by any health hazards. However, the license does not permit the business owner to perform any business activities that fall outside the ambit of the license. Moreover, this license does not pass on property ownership to the license holder.
Objective of Trade License
Trade license came into existence nearly four decades back and is being governed via Municipal Corporation Act. The Trade license promotes fair trade practice and seeks to safeguard the public from health hazards of any trade, and it has been made mandatory by the Indian government to conduct any kind of business or trade-in particular locality & to ensure that no one is leveraging unethical business practices.
The license seeks to instill harmony in society and mandates business owners to comply with underlying guidelines. The license also provides business owners with the requirement of following safety measures.
Benefits of Trade license
- Avert exploitation of workers serving the premises
- Intact relevant safety measures against Fire related accidents
- Compel Businesses to adopt fair trade practices and preserve everyone’s interest
- Protect consumer’s interest against illicit trade activities; thereby increasing the goodwill of the business over time.
- Aid business growth and escalate credibility to a considerable level
Who Needs to Obtain a Trade License?
Following business entities are mandated to secure trade license from the respective Municipal Corporation before commencing business operations:
- Metropolitan city centre
- Local commercial
- LSC (Local Shopping Complex)
- CSC (Commercial Shopping Complex)
- Community centres
- District centres
- Service market/ Service centre
- Pedestrian shopping streets
- Commercial areas
- MLU (mixed land use)
Which Authority Confers Trade license in Respective State?
- A trade license is granted by the licensing department of the municipal corporation in several departments such as engineering, industries, health, etc.
- The Indian government authorizes the license in a way to govern in cities across the nation. The government of India authorizes the license in a manner to regulate in cities across the country.
- It confers consent via letters or documents/certificates to conduct any business or trade where it is located. The grant of Trade license is done on a state-wise basis and as per the regulations set out by the Municipal Corporation.
Eligibility Criteria for Securing Trade license
The eligibility conditions for securing a trade license in a particular state are as follows:
- The applicant should not be a minor – he/she must have attained legal age, i.e. 18 years.
- The applicant must have a crime-free past record.
- The business should have legal status.
- Done on a state-wise basis and as per the regulations set out by the Municipal Corporation.
Common Documents Required for Obtaining a Trade license
Following is the list that encloses all the mandatory documents needed for securing a trade license:
- Business's address proof
- Applicant's identity proof
- Aadhaar card
- Permanent Account Number, i.e. PAN of the applicant in case of proprietorship, else PAN of the firm.
- MoA, i.e. Memorandum of Association in case of Companies
- Incorporation certification in case of Companies
- Property tax receipt (latest ones) in case the business place is owned, else lease document or permission letter issued by the real owner where is business is registered.
- No objection certificate, i.e. NOC issued by the nearby property owners
- Certified Site or floor plan
Steps Followed to Secure Trade license Online
Head over to the Municipal Corporation Website:
The first process is to visit respective Municipal corporation website. ‘Citizen Service’ Option from the respective Municipal Corporation website.
Then applicant needs to register his/her details such as Name, email ID, mobile number etc. Once the details are registered then system generates the User ID and password.
Once the user ID and password is generated, login using the same the application form will come up in which all information asked need to be filled.
All relevant documents are required to be prepared in the prescribed manner and must be duly signed by the concerned authority.
Once all the documents are ready it is required to be uploaded online. The application form and Documents are the verified by the Urban Local Bodies officials.
Unique Application Number
After verification a Unique Application Number will automatically be generated.
Once all documentation are done the payment of fees is to be done by going to ‘Make Payment’ option, there are different modes of payment to choose from.
Issue of license Number
When all the documentation and online process is done successfully then the License number for Trade will be issued.
Note: The Licensing Process May Involve The Requirement Of On-Site Inspection. In Such A Case, The Concerned Authority Appoints An Official To Inspect The Business Place To Ensure That Everything Is In Line With Underlying Conditions.
Get in Touch with Corpbiz support for Hassle-free Obtainment of Trade license
Dealing with registration legalities could leave any applicant baffled and overwhelmed. Our experts can help you mitigate those circumstances by rendering unmatched support. We are playing a pivotal role in strengthening licensing space by providing end-to-end support to our esteemed clients pan India.
Frequently Asked Questions
What is a Trade License? A trade license is a document/certificate that permits the applicant (person seeking to open a business) to commence a particular trade or business in a particular area/location. However, the license does not allow the holder to any other trade or business than it is issued.
Yes, an applicant seeking a trade license must secure fire NoC in the first place.
Conducting trade activities without a trade license could incur heavy penalties for the defaulter. Thus; it is important to secure the same before commencing the business operation,
Licensing cell of the municipal corporation deals with the legalities of trade license.
It entirely depends on the amount to paperwork (accompanied with form) to be processed.
Identification proof & last receipt of payment, MOA, board resolution, partnership, & rent agreement, lease deed or layout plan
ID proof, bank passbook enclosing applicant's signature, copy of the last receipt of the license fee, and scanned copy of original trade license
Anybody conducting a business or trade in commercial premises is mandated to apply for a Trade license.
Municipal Corporation generally issues the trade license with the validity of 1 year.