The Trade License is an essential document for beginning your own company or trade. Without it, you will not be permitted to operate or run a shop within any corporate limits. We will be taking a glance at how trade licenses can be prepared and on the trade license renewal.
What is a Trade License in India?
A Trade License is a kind of certificate or sort of legal document that permits individuals to open a trade or business within the boundaries of a particular area. It is a specific report or document and the applicant is not authorised to open any business, other than the one specified in the certificate. Hence, it does not operate like a general license or permit that enables people to own businesses, but as a specific certificate that permits a very particular business. Moreover, it only allows the applicant approval to open a business, and does not verify any ownership of the property to the applicant.
Why Apply for a Trade License?
- It allows the state government to keep track of the companies operating within the state
- Assists in keeping a record of the compliance and control of such businesses
- Assures that no unauthorised trading is occurring within the country
- Secures nuisances and health hazards to people
- Excludes unwanted and unfair business practices
- Develops social harmony by placing a standard for opening a business
- Makes sure that all the companies working within the state follow certain rules and regulations
- Helps the government control trade activities within the country
Things to Know About Trade License Renewal
- Trade licenses are assigned by the licensing department which operates under the control of the municipal corporation
- The licensing authority has multiple departments under it, such as health, engineering, and even industries
- The government itself allows such permissions in order to improve trade and commerce within the nation
- While the correct scheme for license renewal ranges from state to state, the fundamental method remains the same throughout India
- Normally, the complete process takes anywhere between 7 to 10 days to complete. In case it needs more than 2 weeks, consult the municipality to identify if there are concerns with your request
Types of Trade License
- Industries license: applicable for all kinds of factories ranging from small and medium to large scale production facilities
- Explosives license: applicable for factories producing dangerous commodities such as firewood, firecrackers, candles, and the like
- Food establishment license: applicable if the applicant wishes to set up any business dealing with eatables, such as restaurants, food stalls, hotels, canteens, bakeries, and meat or vegetable stalls
- Shops and Establishment license: applicable for literally every sort of trade establishment, along with the other requisite licenses
Eligibility Criteria for Trade License Renewal
- The applicant must be an adult, above the age of 18 years, and not a minor
- The individual applying for Trade License Online Renewal must not have any criminal cases against him or a criminal background
- The business for which the applicant is seeking the trade license must be legally acceptable within India and must not deal in illegal items
- The applicant must be an Indian citizen
- The application must be registered at least 30 days before starting the business in most states
Documents Required for Trade License Renewal
- Duly filled application for a trade license in the prescribed form
- In case the license renewal is for a firm, a private limited company, partnership, or LLP, they must submit their PAN and incorporation certificate
- Aadhaar card if the applicant is an individual
- Property tax receipt from the municipality
- In case the business occurs in a rented property, the rent agreement/lease agreement
- Neighbour’s NOC
- Blueprint of the building where you want to start the business
- Katha extracts and certificate
- Sanction plan for the blueprint from the municipality
- Occupancy certificate
For renewal, the applicant must also submit a copy of the trade license, challans from last year and tax receipts from the previous year.
Trade license Renewal Process
- Most of the license renewal takes place between 1 January and 31 March
- Trade licenses are valid for one year. After that, they must renew in order for the applicant to continue his or her business
- The application for license renewal must be put in at least within 30 days after the expiry of the old license
- If the process is delaying beyond reasonable limits, the applicant will have to pay a fine as per the rules of the municipality
- To apply for the license, the applicant must visit the state government’s official website
- From the homepage, go to the ‘Trade License’ tab and load the application for the same
- After filling the application, upload the supporting documents
- The state officials will then verify the application, go through the documents and decide on whether to approve or reject the application
- You can check the status of your application online via the official state website by using the application number
