Trade Licence: 100% Easy Online Process

Are you planning to start a new business and thinking about all the essential documentation you will need? Trade License, one of the important documents to start a business or a trade in a particular municipal limit.
Our Experts will help you in documents preparation and filing of Trade License Application in correct section, to start the process chat with our Experts

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Trade Licence/ Business Licence

A trade license is a document/certificate that gives permission to the applicant (person seeking to open a business) to commence a particular trade or business in a particular area/location.

It ensured that the business or trade is carried by adhering to all the standards of safety as issued by State Municipal Corporation . It protects the residents from being affected by any health hazards.

However, the license does not allow the holder to carry out any other trade or business than for it is issued. Furthermore, this license does not pass on any kind of property ownership to the holder of the license.

Key Point of Trade Licence

Why Trade Licence?

To safeguard the public at large against the health hazard and nuisance which a trader / business may cause. Trade license is a method to regulate the trade and to ensure compliance with rule and safety guidelines issued by government. The objective of Trade License is control business locations by way of putting constraints on people from running certain types of businesses from their home to maintains the separate business environment and preserves locality environment.

Who Need Trade Licence?

All commercial establishment that falls under the following categories must obtain trade license:
   1. An establishment or administrative service in which persons employed or mainly engaged in office work.
  2. A hotel, restaurant, boarding or eating house, a cafe or any other refreshment house.
  3. A theatre, cinema or any other place of public amusement or entertainment.

Licensing Authority:

Trade Licence(s) are issued by the authorised department of a municipal corporation in consultation with other specialised departments like fire brigade, health, engineering department having jurisdiction over the business.

State Wise Application of Trade Licence:

While some state has made it mandatory to obtain a trade license, but in some states it is optional. The kind of license and license fee also differs from state to state. Some states charge a monthly fee while others charge a % of the turnover.

Documents for Trade Licence

Documents Required for Trade Licence depend on type of applicants and state where you are applying for Trade Licence. however basic documents for trade licence application will be same as following – 

  1. Pan Card of the establishment in case of company, LLP or Firm
  2. Canceled Cheque or  bank statement of the establishment.
  3. Colour Photograph, Pan card and ID Proof and Address Proof of all Directors/ Partners.
  4. Site Plan/Key Plan showing the area under the occupation of the applicant or earmarking salient features of the neighbourhood of the site.
  5. Certificate of Incorporation, MOA and AOA of the company or LLP/ Partnership Agreement as the case may be.
  6. Premises Proof: Sale Deed, Electricity Bill/water bill and NOC from owner.
  7. Photograph of the establishment with front-facia, display of goods traded from the premises or the business being carried out from the premises.

Trade License Fees

The trade license fees vary from state to state since it is issued by the government agencies (Municipals) of the respective state. The license fees are determined based on the rules and regulations prevailing in that respective state. In some states, trade license fees are charged on an annual basis. Whereas, in other states, it is calculated based on the percentage of annual business turnover.

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Different categories of trade license

  • Industries license: small, medium and large scale manufacturing factories
  • Shop license: Dangerous and offensive trades like a sale of firewood, cracker manufacturer, candle manufacturer, barber shop , laundry (dhobi) shop etc.
    Food establishment license: Restaurants, hotels, food stall, canteen, the sale of meat & vegetables, bakeries etc

Eligibility for applying for Trade license

The eligibility conditions for applying trade license are as follows:

  • The applicant should be more than 18 years old
  • The applicant should not have any criminal records
  • The business should be legally permissible

Benefits of Trade Licence

Legal Entity: In order for a business to be considered as a legal entity it needs to have a trade license.
Manges Rules & Regulations: As stated by the Municipal authority in which the business is located.
A Measure of Competence: With a trade license, a business can operate in a commercial space, without fear of being shut down. This provides a display of confidence and competence, in the business and entrepreneur.

Non Compliance

Trade License is a mandatory requirement for every business. Hence, if any business owner fails to get one before starting a business, he or she is liable to pay a fine or may face legal repercussions.

FAQs on Trade Licence

A trade license is a document/certificate that gives permission to the applicant (person seeking to open a business) to commence a particular trade or business in a particular area/location.

Trade license is a permit issued by a municipal corporation granting permission to a person or entity to carry particular business at a specific premise. It ensures that the citizens are not adversely affected by health hazards and perils brought forth by the improper conduct of trade.

The whole procedure of getting a Trade License should not take more than 15 days. At Setupfiling, we will help you get your trade license within a span of 20  days, from the time you apply. Yes, the government has made it a mandatory requirement to renew this license every year. Failing to do so, can attract a penalty or a fine.

Trade Licence is valid for one year.  government has made it a mandatory requirement to renew this license every year. Failing to do so, can attract a penalty or a fine.

Yes, the government has made it a mandatory requirement to renew this license every year. Failing to do so, can attract a penalty or a fine.

Yes, a Trade License is required irrespective of which line of business you are in. Any business that exchanges goods or services for money, has to have this license. In the case of a restaurant, you require a Food Establishment license.

You can apply for it 30 days prior to the commencement of your business.

If for any reason you are denied a Trade License, you can submit a petition to the Standing Committee with a copy of your denial letter.

Yes, The government has made it mandatory for one to obtain trade license to ensure that the person is not carrying out unethical business practices and is following relevant rules, safety measures and guidelines.

No, According to law, it is mandatory for all to get the trade certificate. In case you don’t have a trade license you will be considered as illegal and need to pay penalties in form of massive amount of money according to the type or nature of their business performed.