How can you apply for Trade License in India?

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Now a days Trade License has become a very crucial document for an individual or a person who wants to commence or set up a new business in a certain specific area/location/site. This kind of a license allows a person to carry on its trade or a business for which such Trade License has been issued. No other kind of trade or business is allowed for which such license is not issued by regulatory authorities. Trade Licenses are issued of the place only where such business is sighted. Furthermore, to commence a new activity in an ongoing business, Trade License is necessary. In this article, we shall discuss about eligibility, documents required etc., for trade license in India.

Table of Content:

Factors that led to Introduction of Trade License in India

The main purpose of the Government behind introduction of Trade License in India is to regulate or monitor the Business sector in the country which leads to development of this sector and hence will result in the prosperity of the country. Another reason of the introduction of this kind of a license is that to make certain that no unethical practice prevails in the economy. Many people are performing various business activities from their residence itself, to control and to maintain proper business environment, Trade License becomes necessary.

Regulatory Authorities that can issue a Trade License in India

In many departments like Industries, Health, Medical, Engineering, etc., Trade License is issued by Municipal Corporation having its Licensing Department across the states. The rules and regulations related to the allocation of Trade License differs from state to state. The Government of India by virtue of Certificates or Letters permits on to carry various trades/businesses at the particular place for which such license has been issued.

Who can seek Trade License?

To be eligible to apply for the above license, the applicant has to ensure the following criteria are satisfied:

Miscellaneous Trade Licenses issued in India

  • License for establishment of food outlets like Hotels, Restaurants including mobile restaurants, Canteen in various premises, cafes, food stall, confectioneries, etc.
  • Compulsory Industrial License is required for Alcoholic beverages, Tobacco products which includes cigarettes, hookah, bidis, etc., developers of Military and commercial Aircrafts, Mechanical, Chemical and Nuclear Explosives, life threatening chemicals.
  • License issued to manufacturing industries of small, medium and large size, cyber-centers, factory establishments, flour mills, etc.
  • License issued to various shops like barber shop, laundry shops, etc.
  • Fire Safety License needs to be issue to safeguard the interest of costumers from hazards.
  • Signage License is also required to use posters, hoardings, paintings and graphics for the promotion of business.

Advantages of Trade License

There are several advantages of acquiring Trade License in India. Some of them are mentioned hereunder:

Advantages of Trade License
  • Reliability- As compared to an unregistered business, the one which has a Trade license enjoys more reputation among clients and investors.
  • Financial Assistance- It is simpler for businesses to apply for loans and financial help from various financial institutions and government.
  • High Returns- Entry to the foreign markets became possible after acquiring Trade License as it increases goodwill in the market resulting in increasing returns.
  • Virtuous Practices- Government authority keeps an eye on a business having Trade License so that no unethical business practice is being carried out.
  • Auxiliary Provisions- Trade License provides an aid to an individual to attach more facilities to its business to fascinate more customers.
  • Less Legal obligation- Entities having Legal License have less chances of indulging itself in legal affairs and can also help in raising themselves as compared to an unregistered firm.
How can you apply for Trade License in India?

Documents requirement for obtaining Trade License

The documents that are required to obtain Trade License are as follows:

  • Applicant’s ID proofs like Aadhar card, PAN card in case of proprietor otherwise PAN of firm/company needs to be submitted
  • Address proof of business concerned
  • Lease or sale deed related documents
  • Incorporation Certificate, MOA in case of companies
  • NOC from nearby business owners
  • Blue-print of business premises
  • Receipt of various tax paid to the regulators, etc.

Procedural requirement for obtaining Trade License in India

  • Visit the official website of Municipal Corporation and select ‘Citizen Services’. Thereafter, to get yourself register, select ‘Apply for online License’ and fill all the required details.
  • After submission of required details, login ID and password will be generated. Fill all the required information and also upload necessary documents with the new login ID and password, once filled click on ‘submit’ button.
  • All the information and documents are then verified by the officials of concerned licensing department and will provide an applicant with the ‘Unique Application Number’
  • The license fees (differs from state to state) shall require to be paid through the payment window and hence after successful payment license number shall be issued.
  • Such license shall be valid for a period of one year and for renewal, an application shall be submitted within 30 days of its expiration.

Imposition of Penalties for not taking License

There are grave outcomes for those applicants who do not comply with the requirements of Trade License. Some of them are:

  • Penal provisions shall be imposed by the regulatory authorities in the form of fees on such person.
  • Cessation of business may also take place for not adhering to the rules and regulations of Trade License.
  • Half of the License fees shall be imposed on the applicant if the License is not renewed within thirty days of its expiry.
  • Defaulting applicant shall be liable for relevant legal action, if required.

Renewal of Trade License

The license can be renewed subject to the following conditions:

  • Usually, these licenses are renewed between 1st January to 31st March of the respective financial year.
  • This license is valid for 1 year.
  • The applicant has to make an application for the trade license in India.
  • The application can be made thirty days before the expiry of the certificate.
  • When the certificate is renewed, documents have to be submitted to the respective authority.

The following documents are required in case of renewal:

  • Scanned copy of the trade license;
  • Challans of previous year;
  • Recent tax receipt of the property.

How can Legal Window help in securing Trade License?

  • We file the application form on your behalf to get the Trade License.
  • We monitor and track the status of the application on behalf of the client.
  • We value your time and money.

Conclusion

The conclusion from this entire write-up is that Trade License gives a right to an individual to carry on require business or trade in a locality and it also safeguards and protects the citizen from any wrong doings. The procedure to obtain Trade License is also not a cumbersome or time-consuming process. One can easily get a License if all the requirements related to documentation has been fulfilled by the concerned candidate. Getting such a License not only increases reputation of entities among investors but it also helps businesses in reducing legal litigations and penalties.

CS Urvashi Jain is an associate member of the Institute of Company Secretaries of India. Her expertise, inter-alia, is in regulatory approvals, licenses, registrations for any organization set up in India. She posse’s good exposure to compliance management system, legal due diligence, drafting and vetting of various legal agreements. She has good command in drafting manuals, blogs, guides, interpretations and providing opinions on the different core areas of companies act, intellectual properties and taxation.

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