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Tuesday, May 28, 2024

7 Major Points to Keep in Mind While doing Trade License Renewal

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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


  1. Trade licenses are assigned by the licensing department which operates under the control of the municipal corporation
  2. The licensing authority has multiple departments under it, such as health, engineering, and even industries
  3. The government itself allows such permissions in order to improve trade and commerce within the nation
  4. While the correct scheme for license renewal ranges from state to state, the fundamental method remains the same throughout India
  5. 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


  1. The applicant must be an adult, above the age of 18 years, and not a minor
  2. The individual applying for Trade License Online Renewal must not have any criminal cases against him or a criminal background 
  3. The business for which the applicant is seeking the trade license must be legally acceptable within India and must not deal in illegal items
  4. The applicant must be an Indian citizen
  5. The application must be registered at least 30 days before starting the business in most states

Documents Required for Trade License Renewal


  1. Duly filled application for a trade license in the prescribed form
  2. In case the license renewal is for a firm, a private limited company, partnership, or LLP, they must submit their PAN and incorporation certificate
  3. Aadhaar card if the applicant is an individual
  4. Property tax receipt from the municipality
  5. In case the business occurs in a rented property, the rent agreement/lease agreement
  6. Neighbour’s NOC
  7. Blueprint of the building where you want to start the business
  8. Katha extracts and certificate
  9. Sanction plan for the blueprint from the municipality
  10. 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


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