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Trade License – Registration / Renewal
What is Trade License
A trade license is a permit or certificate that allows an individual to start a specific business or trade in a particular location. It ensures that the business follows safety guidelines set by the state or local government and protects the community from potential health hazards. However, the license is specific to the business or trade for which it was issued and does not grant property ownership to the holder.
The validity of Trade License is for 1 year and can be renewed every year. The certificate can be renewed between Jan 1 Jan to March 31st.
The applicant needs to submit the renewal application within 30 days from the date of expiry of trade license certificate.
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Why Trade License is required
For the past 40 years, trade licenses have been implemented and regulated by state governments through municipal corporation acts. This system is in place to prevent individuals from being negatively impacted by the nuisances and health hazards caused by certain businesses. It is now a requirement to have a license to operate a specific business or trade in a particular area, and to prevent individuals from engaging in unethical business practices. The license promotes harmony in society by ensuring that all businesses comply with relevant rules, guidelines and safety measures. The main purpose of the trade license is to control the location of businesses, by preventing certain types of businesses from operating in residential areas and to maintain the business and community environment.
Different categories of Trade License
- Shop License: Small businesses and manufacturers, and dangerous businesses like sale of crackers and fireworks, etc.
- Industries License: MSME manufacturing factories
- Food Establishment License: Bakeries, Food stalls, canteens, restaurants, hotels, and sale of meat & vegetables, etc.
Documents required
Documentation required for application of the trade license are as follows:
- Address proof of the business
- ID proof of the applicant
- Aadhaar card
- PAN of the individual in case of proprietorship, else PAN of the firm or company
- Memorandum of Association (MOA) in case of Companies
- Certification of incorporating in case of Companies
- A latest municipal property tax receipt in case the premises are owned, else lease document or consent letter of the owner of the property where the business is registered.
- NOC of the neighbours (nearby property owners)
- Certified layout plan of the office
Benefits of Trade License
A trade license is a document issued by the government that allows a business to legally operate within a specific jurisdiction. Some advantages of a trade license include:
- Legal compliance: Obtaining a trade license ensures that a business is operating in compliance with local laws and regulations.
- Legitimacy: Having a trade license can help establish a business as legitimate and credible to customers and other businesses.
- Access to government services: Having a trade license may be necessary in order to access certain government services or benefits, such as the ability to bid on government contracts.
- Protection of consumers: Trade licenses help to protect consumers by ensuring that businesses meet certain standards and requirements and can be held accountable for any violations.
Eligibility for applying for Trade license
The requirements to be met in order to apply for a trade license are:
- Being of legal age (over 18)
- Having a clean criminal record
- Operating a business that is lawful