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What is Trade License in India?

Trade License is a permit required to carry out trade activities or starting a business in a specific municipal area for which it has been issued.

The State Government is responsible to lay down the provisions of the trade. The provisions of the License regulate and monitor several trade activities within a particular city.

Every state has its own municipal body and different Act which governs Trade License. The License ensures that the business adheres to certain standards, rules, and safety guidelines.

A Trade License is issued by the Municipal Corporation of the particular state or place where the business is situated.

How is Trade License different from Company Registration?

A Trade License is entirely different from Company Registration. On one side, a License provides the individual an authorization to conduct a specific type of business.

However, on the other side, Company Registration provides a business with a legal identity. It’s the process of registering a business under Companies Act, 2013. Furthermore, it gives the company a suitable structure.

Eligibility criteria to get a Trade License

There are specific guidelines set by the Government to obtain a Trade License in different cities and states. The common criteria is as follows:

  • The applicant must have attained at least 18 years age;
  • The individual must not have any criminal records against him;
  • The business in which the applicant is going to engage must be legally permissible.

Different types of Trade License

Any person or company can apply for three kinds of Trade Licenses based on the nature of the business he carries out which are as follows:

  • Shop License: Such a License is essential for the individuals who wish to open a shop such as barber shop, sale of firewood, dhobi shop etc.
  • Industries License: Such License is crucial for small, medium and large scale manufacturing factories.
  • Food Establishment License: Anybody who is willing to set-up a food establishment such as hotels, restaurants etc. requires this License.

What are the documents required for Trade License?

1. Documents required for new Trade License

  • Identity and address proof of the applicant;
  • PAN card of the establishment, applicable for Company/LLP/Firm;
  • Certificate of Incorporation;
  • MOA and AOA of the company;
  • Affidavit;
  • Bank Statement and cancelled Cheque;
  • Property Tax Receipt and Income Tax Return;
  • Documentary proof of the establishment of trade;
  • Consent letter or lease documents from the property owner;
  • Proof of the premise of the establishment such as the Electricity Bill, Sale Deed, Water bill;
  • NOC (No-Objection Certificate) from the owner;
  • Other documents, as required.

2. Documents for Renewal of a Trade License

  • A copy of Original License;
  • Identity proof;
  • Address proof;
  • Old G-8 receipt;
  • Application for renewal of a Trade License.

3. Documents for the issuance of a duplicate license

  • Copy of FIR (First Information Report);
  • Indemnity Bond in the prescribed format.

How to apply for Trade License?

One can apply for a Trade License, both online and offline. The procedure to obtain a License is different for every state because all of them have different website and different Act which governs them.

Therefore, if you need a Trade License, contact Swarit Advisors. We will help you obtain the License in whichever state you want to. Just follow the simple steps:

  • Fill the enquiry form available with Swarit Advisors.
  • One of our experts will call you very soon.
  • They will understand your business and the need to obtain the License.
  • We will prepare the required documents and send it to you for review.
  • If there’s any modification, we will make it and send it to the concerned department along with the Application Form for the Trade License.
  • Once the department is satisfied with the document verification, it will issue Trade License.

Renewal of Trade License

Trade License is supposed to be renewed on a periodical basis. The Application for the renewal of a License should be made at least 30 days prior to the expiry date.

Trade License in India is renewed in between 1st January to 31st January. Generally, the validity of this License stands for a period of one year. Hence, this needs to be renewed every year.

In case, the applicant fails to renew the License in a given period, then he/she will be fined for the same.

Why Swarit Advisors?

  • 20+ years of experience
  • Ranks high in delivering License
  • 150+ team of Lawyers
  • 9 star rating by our clients
  • More than 1000 Registrations delivered
  • 99% on time delivery
  • 500+ cities served

In case you have any questions or wish to apply for Trade License, then click here or fill the inquiry form. You will get a dedicated Call from a CA /CS.

Frequently Asked Questions (FAQs)

Ans: The Municipal Authority of the particular state is the responsible body for the issuance of Trade License.

Ans: A Trade License is valid for only one year. Therefore, it must be renewed every year in order to carry the business or trade further.

Ans: No, you can’t carry several trades with a single Trade License as it is issued for a specific business.

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