A License issued or permission granted by the municipal corporation permitting to carry on a...
Trade license is a must for every business entity that seeks to generate profit through its operation. If you are looking to start a new business and wondering about essential licenses, then trade license is one of the critical documents that you must possess to start a business or a trade. In this article, we shall discuss about eligibility, documents required etc., for trade license in India.
It is a document/certificate that allows a person to commence a particular trade or a business in a specific location or area. It ensures that the business or trade is done by fulfilling all the standards of safety as prescribed by the State Municipal Corporation. It protects residents from being affected by any health issues.
It is worth mentioning here that this license doesn’t permit the license holder to carry out any other business or trade other than for what it is issued. Moreover, the license also doesn’t pass on any kind of ownership of the property to the license holder.
In the last few years, trade license has been introduced and regulated through municipal corporation acts by the state governments. It helps in making sure that public is not severally affected by the nuisance and health hazard of any trade or business.
This license is made mandatory by the government to carry out any business or trade in a particular area and to make sure that no one carries out any unethical business practices. Hence trade license in India is highly significant.
Further, this license also creates a sense of harmony in the society, considering that every business follows relevant rules and guidelines and obeys the safety protocols. This license was made obligatory in order to ensure that the government can regulate different trade activities in the country.
The trade license is issued by licensing department of municipal corporation in different departments such as engineering, health, industries etc. The Indian government authorizes the license in a way to regulate in cities across country.
It gives permission through letters or documents or certificates to carry out business or trade where it’s located. The issuance of this license differs from state to state, depending on the local government agencies rules and regulations.
The eligibility conditions for applying this license are as follows:
Different categories of this license include the following:
The following documents are required:
Trade licenses are valid for 1 year, and it can be further raised by going through the renewal process online. The applicant desiring a renewal should submit an application for renewal within 30 days of the expiry.
The following documents are required in case of renewal:
Some essential points should be noted:
There are certain key differences between these two.
|Parameter||Trade License||Company Registration|
|Structure||It is required by an existing entity to perform business activity.||It is required to start a new business entity.|
|Eligibility||The applicant must be more than 18 years of age; The applicant shouldn’t have any criminal records; The business so desired by the applicant should be legally permissible.||Directors should not be minor; The company should be registered with a minimum requirement of capital.|
|Registration||This license is obtained by applying to the respective state municipal corporation.||It should be registered with Registrar of Companies.|
|Types||Shop License; Industrial License; Food Establishment License.||Private limited; Public Limited; One Person Company.|
|Validity||Valid for one year; can be renewed afterwards.||Valid for lifetime|
Trade license in India can be easily availed online. It is a must for businesses to commence a particular trade or a business in a specific location or area. Therefore apply for trade license today.
Read our article: Why Having a Trade License is Important?