Trade License
Every commercial entity, whether it be a municipal company or a state government, needs to obtain a trade licence from authorities. This licence outlines the scope of their commercial activities, i.e., what they are permitted to accomplish or not. Accessing the government perks put in place to stimulate trade and commerce also requires a trade licence. Different levels of government, such as the municipality, district administration, or even state government, grant licences to various types of businesses. It’s important to be informed about the rules and regulations because each state in India has its own unique set.
What is a Trade License?
The idea behind the trade licence is straightforward. It is a certificate granting the applicant permission to conduct business in a certain area or industry. The certificate enables traders to actually start their business. Each company needs its own trade licence. Additionally, a new trade licence is required to continue operations whenever a business is sold or otherwise transferred from one owner to another. This suggests that business licences cannot be transferred.
Why was Trade License Introduced?
In India, trade licences first appeared about forty years ago. Various State governments’ municipal corporations are solely in charge of this area’s regulation. The government has basically checked and verified that a business is abiding by all applicable laws and regulations by providing a trade licence to it. Additionally, it makes sure that unethical commercial activities are stopped or exposed. Additionally, the granting of a trade licence implies that the cost of doing business, such as environmental contamination, does not have to be borne by the general public and that the corporation can effectively be held responsible for managing such risks.
Who is Eligible for a Trade License?
A trade license eligibility requires meeting the following criteria:
1. The applicant cannot possess any criminal records.
2. He or she must be above 18 years of age.
3. The pitched business proposal must be legally acceptable.
Who issues a Trade License?
The municipal corporation in the relevant state government, where the business will have its registered office and also where the operations will be carried out, conducts the trade licence verification. Before issuing a licence, various municipal corporations demand that the company undergo inspections relating to health and safety and other factors.
What are the Documents Required?
1.) The documents required for trade license vary depending on the kind of business intended to be set up.
2.) PAN card with incorporation certificate is required for firms, LLP’s and companies.
3.) The most recent municipality property tax payment receipt.
4.) Aadhar card is mandatory in cases of individuals.
5.) NOC form from your neighbor next door.
6.) Letter of consent or lease documents from the property owner.
7.) An authorized layout plan of your trading building, showcasing all rooms.
8.) Khata extract
9.) Khata certificate
10.) OC or occupancy certificate
11.) Sanction plan
When is the Fresh License Issued?
Once all eligibility requirements have been satisfied, trade licence checks have been completed, and the trade licence fee has been paid, the new licence will be granted. The certificate is often issued in 7–10 days in major cities. It could take longer in rural and small communities.
What is the Validity?
A trade licence status is valid for one year after which it must be renewed annually, often between January 1 and March 31. Applications for renewal must be submitted within 30 days of the license’s expiration date; otherwise, a new licence must be requested.
Renewals call for:
1.The most recent trade licence
2. Challans from previous years
3. The most recent property tax receipt