What Is Trade License?
Trade License is a certificate issued by the municipal corporation to the registered applicant giving authorization of starting any type of trade or business in a particular area or location. It does not allow the license holder to use the same license for any other trade or business. It is governed by the respective state laws under the Municipal Corporation act by the state government. Trade licenses are published by the authorized departments of the municipal corporations. Starting a business without obtaining a trade license may result in penalty or even termination of business. We can say that Trade license is similar to a driving license which requires a driver to drive a car.
The license department is the authorized administration of the municipal corporation which publishes licenses after consultation with other specialized departments. It is important for business establishments to take fundamental licenses from the License department before starting manufacturing, exchange or storage of any activity/commodity. The application should be filed to the commissioner of Municipal Corporation before 30 days of the commencement of the business. The easiest way to apply for trade license is trade license registration online. You can easily register for trade license online through FinacBooks. You just need to fill a simple form online for trade license registration and the rest is our responsibility.
Why Trade license?
The main motive of issuing trade license is to control trade location by restricting the people from executing certain types of businesses from their home location. It maintains the business environment as well as the local environment. Trade license can only be issued to commercial premises where the government has not banned any trade activities. The trade license ensures that license holder is following the relevant rules, guidelines and obeying the safety measures specified by the government. It is issued to safeguard the public from the health hazards and nuisances which may rise if the license will not be issued. Another purpose of issuing trade license is to ensure that no person will carry out any sort of unethical trade practices and fulfill their responsibilities efficiently.
Eligibility for a Trade License
Trade license is issued by the municipal corporation depending upon the eligibility of a particular trader/business. Every trader/business needs to meet certain eligibility criteria to apply for trade license. Don’t fill the trade license form in case you are not eligible.
You can only apply for trade license, if you fulfill the below mentioned eligibility criteria
Licensing Authority for Trade License
Trade license is issued by the license department of Municipal Corporation in consultation with various departments such as health, fire brigade, engineering etc. Licensing authority grants permission to the traders/businesses through letters or documents/certificates to carry on their business or trade at their business location. Every state has its own local government rules & regulations and therefore the procedure of issuing trade license varies from state to state.
For Example – In case of Delhi, trade license is provided by the Delhi Municipal corporation department whereas in case of Haryana, trade license is issued by Haryana Municipal Corporation.
Types of Trade License
There are three types of trade licenses –
- Shop License – Shop license is issued to persons who want to open any type of retail businesses.
For ex – Grocery shops, Barbers shops, Dhobi shops, shops involved in selling of firewood, Candle manufacturing, Cracker manufacturing etc.
- Industrial License – Industrial license is issued to small, medium and large industrial units.
- Food Establishment License – Food establishment license (FSSAI Registration) is issued to persons who want to enter into food & beverage industry by opening cafes, bakeries, restaurants, hotels, vegetable shops, meat shops etc.
What are the Benefits of Trade License?
The benefits of trade license are as follows –
- Legal Entity – A business holding a trade license will be considered as a legal entity. It also helps in attracting new investors and enjoys greater goodwill.
- Managing of Business & Personal Finances – It helps in managing your business and personal finances separately and identify business profits & losses.
- Measure of Competence – Every business has an exclusive right to operate in his commercial space without any fear of shutting down after trade license registration. It provides confidence to the businessman to trade freely without any hassle.
- Save You From Paying Fees & Penalties – It saves you from paying any type of fine or penalty and even from business termination too.
- Ensures Safety – It provides safety measures and guidelines to businesses which can be of great importance to your business.
Documents Required for Trade License registration
Documents for trade license registration vary as per structure of your business. The documents required for trade license are as follows –
Procedure for obtaining a Trade License
Step 01 - Visit the official MCD Municipal portal - http://www.mcdonline.gov.in/
Step 02 - Select your region
Step 03 - Click on “Trade/storage license” tab given on the home page of the web portal.Click on “Trade/storage license” tab given on the home page of the web portal.
Step 04 - Click on “Application for new license” given under heading “Trade & Storage license” and you will be redirected to a new page where you will find the application form for trade license.
Step 05 - Fill all the required details given in the application form such as Applicant’s name, Address, Type of trade, Trade category, Property tax details, NOC from fire department, Fee details etc.
Step 06 - Fill the required details, upload the relevant documents and click on submit.
Step 07 - After successful submission of application, a unique application number is generated and shared with the applicant over the screen.
Step 08 - After submission of application, officials will do the verification of the documents.
Step 09 - After scrutinizing the application, the authorized officials will do the fee calculation and send the payment amount to the applicant. The payment amount is notified to the applicant via SMS on the registered mobile number or through e-mail on the registered e-mail ID of the applicant to make the requisite payment.
Step 10 - Fill the following payment details requested by the officials –
Step 11 - Do your payment online and save the acknowledgement receipt for future reference.
Step 12 - After receiving the Payment, it gets verified and the license is issued by the authority.
Validity of Trade License
Trade license is a mandatory requirement for every individual engaged in any kind of trade or business. The validity of trade license is 1 year. Every individual applying for trademark registration can easily apply online & download trade license certificate directly from the website with the help of FinacBooks. A registered person needs to follow rules, regulations and other provisions in relation to trademark registration. In case of any non-compliance or negligence or initiating business operations without a trade license will be liable for fines & penalties. However, legal action may also be taken against the defaulter.
Trade License Renewal
Trade license renewal is a process of renewing the trade license by the trader/business before the expiry date of the license. The validity of trade license registration is 1 year. Therefore, it is essential for the trader/business to renew the trade license within 30 days from the expiry date of the trade license. In case the renewal process is delayed by the trader/business, it may be liable for fines & penalties as per the rules & regulations framed by issuing authority. As per statistics, Indian licenses are renewed every year.
Documents required for renewing a Trade License
The documents required for renewing a trade license are as follows –
Procedure for Trade License Renewal
The procedure of trade license renewal is as follows –
- Visit the official state government portal - http://www.mcdonline.gov.in/
- Click on “Trade license” tab given on the home page of the web portal.
- Fill the application, upload the supporting document and click on submit.
- In the next step, application and documents uploaded will get verified by the state officials and decision of approval or rejection of application is taken.
- After submission, you can easily check your application status online with the help of application number.
Apply for a duplicate trade license
Duplicate trade license application is filed in case it is torn, stolen or lost by the applicant. It may be filed due to any other reason but you need to mention that reason to the state government officials via filing form online. You need to enter the following details in the duplicate license application form in order to get duplicate trade license –
After verification of details by the mcd officials, the duplicate copy of the trade license is issued by the Municipal Corporation.
Documents Required for Duplicate Trade License
The documents required for duplicate trade license are different from the documents required for normal trade license application. In order to get Duplicate trade license copy, you need to submit the following documents –
- Identity proof of the applicant.
- First information report (FIR) made to the nearest police station.
- Indemnity bond in a prescribed format.
Important points to be noted about Trade license
- Trade license is issued by the Municipal corporation is exclusively for the individuals engaged in trade/business.
- Every municipal corporation issuing trade license has its own rules & regulations which vary from state to state.
- The fee structure of the trade license varies depending upon the nature of the business.
- It ensures ethical business practices to be performed by the traders in accordance with safety measures & guidelines.
- It is necessary to obtain a trade license before starting business operations otherwise you will be liable for fines & penalties or it may even result in business closure.
What Is Included In Our Package?
It takes 7-10 working days to get trade license certificate in metro cities whereas in other small cities & rural areas, it may take longer time.
Yes, trade license is needed to run a restaurant under the category of food establishment license.
You need to apply for an online trade license 30 days before the commencement of business operations.
If your trade license application is denied, file the petition along with the copy of denial letter to the standing committee (Health).
It is mandatory to obtain a trade license in some states whereas it is optional in some states too.
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