Trade License, is required to commence a business during a particular municipal limit. Further, the appliance for Trade License Renewal is to be filed within thirty days of license expiry.

1. MARCH 24, 2020
Trade License
An Enterslice Comperhensive Guide

2. If you plan to establish a business of your own and you have no idea where to
start and what approval is needed, then the first thing you need to look is that –
whether you want to deal in goods or services and secondly- what will be your
place of business. After being clear about the above mentioned points, the next
thing on your to-do list is getting a license.By the way of this license,
The government regulates any specific business in a specific locality. The
Municipal Corporation of the place grants permission or trade license to carry
on a particular trade in a particular locality. It ensures adherence to relevant
rules, standards and safety guidelines prevailing in the land.
What is Trade License?
An Easy Definition

3. The registration of the business is important for giving it a
legal identity of its own. It depends upon the promoter to
decide upon the type of entity he wants to establish
depending upon his business scale. However, it is mandatory
for every entrepreneur to obtain the trade license before the
commencement of any business activity. If any person is
found conducting the business activity without obtaining the
license, the business will be considered as illegal and heavy
penalty may be levied upon the owner.
How Trade
License is
different from
Company
Registration?

4. When should
License be
Acquired?
Every business entity planning to start i'ts business
operations shall be required to obtainthis license within 15
days of the commencement of any activities. The activity
consists of manufacture, exchange or even storage of any
commodity. In some states it is mandatory to apply for this
license 3 months prior to the commencement of any
business activity.

5. Generally, the state governments regulate in the state with the
help of Municipal Corporations of the area. In some states, it
is mandatory while it is optional in other states. The fees
prescribed for the online trade license also varies from one
state to another. The manner of collection of the fees is also
different. In some cities it is charged as the annual fees while
in the other, it is calculated and charged on the basis of
percentage of business turnover. Some states have
exempted certain departments from getting a license, eg.
MSME in Delhi.
Who Regulates Trade License?

6. Minimum Requirements for Getting a Trade License?
The Government has prescribed certain minimum requirements for obtaining online trade
license in various states and cities. Some of the general conditions are as follow:
The individual applying
for license must be
atleast 18 years of age.
The activities in which
the business is going to
get engaged shall be
legal.
The applicant shall be of
clean image and shall be
free from any criminal
background.

7. CATEGORIES OF TRADE LICENSE
Type A Category
These licenses are issued for the
business activities related to
consumable items and eating hubs.
Type B Category
These licenses are issued for such
trades which makes use of
locomotive power in order to
function, such as industries,
workshops, flour mills etc.
Type C Category
These licenses are issued for trade
involving dangerous activities such
as firewood, charcoal etc.

8. DOCUMENTS REQUIRED
FROM TRADE
LICENSE
PAN cardTax Receipts.
ID proof
ID proof
manager
Certificate under
Shop and
Establishment
Fire NOC
Rent Agreement
Utility Bill

9. It is not a one-time license. It shall be renewed on periodical
basis. The requirement of payment of annual fees for the
continuity of the license is also mandatory in some states and
cities. The trade license renewal is done from 1st January to
31st March of every year. The application for renewal shall be
made atleast 30 days before the commencement of the year for
which application is sought for. A fine of 50% of the license
fees is levied in case of any delay in the trade license renewal
process
Trade License Renewal

10. The following are the
documents which are to be
submitted with the
application for trade license
renewal:
Copy of the Original License.
Challans of the fees paid in the
previous years.
Tax Payment Receipt.

11. In case your application for online Trade License is denied on
any grounds, then, you can file a petition to Standing
Committee (Health) with a copy of letter of denial to consider
the matter.
Appeal for Denial of Application

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