Trade License Registration

What Is A Trade License Registration

A trade license ensures that people don’t make their residential area their business location. A business within a state, municipality, or corporation will require trade license registration from the concerned central or state government to begin with any business in a particular area or location. The applicant must first understand the jurisdiction under which the business is operating and the applicable Act.

The trade registration application must be completed within 30 days of commencement of the business. It is usually issued within 7 to 15 days of submission of the application. The application for grant or renewal of the license will be made to the commissioner of the corporation in the case of most of the states.

Who Issues The Trade License?

The trade license is issued by various departments of the municipal corporations like industries, health, engineering, etc. The issuance of the trade license varies across states based on the local government agency’s (Municipals) rules and regulations. The Government of India authorizes the licenses to regulate cities across the country.

Eligibility Criteria For A Trade License

• The applicant must be above 18 years
• The applicant should not have any criminal records
• This type of business must be legally permissible

Documents Required For Trade License

The applicant must submit the following documents along with the application to the concerned municipal authorities:

• Application in the required format
• Aadhaar is mandatory when an individual is the applicant.
• Most recent receipt for The Municipality Property Tax Payment.
• If the applicant is any firm, company, or LLP, a PAN card along with the certificate for incorporation is required.
• NOC from the nearest neighbour
• Katha extracts
• Lease documents or consent letters from the property owner.
• A certified plan for the layout of your trade building
• Katha Certificate
• Sanction plan
• Occupancy certificate

Trade License Fees

The fees for a trade license varies across states since it is issued by the government agencies (Municipals) of the respective state. The license fees are based on the rules and regulations of the respective state. In some states, trade license fees are levied annually. In yet some other states, it is computed based on the yearly turnover of the business.

Different Categories of Trade Licenses

• Shop License: Dangerous trades like a sale of firewood cracker manufacturer, dhobi shop, and barber shop.
• Industries license: Small, medium, and large-scale manufacturing.
• Food establishment license: Restaurants, hotels, food stalls, canteens, vegetables, bakeries, and the sale of meat.

Important Things Related To Trade License

• Gumasta License: Trade license is referred to as Gumasta License
• Application: The procedures for trade license registration application vary across states since state regulations differ. The trade license should be applied with the respective state government, municipality, or corporation.
• Processing Time: The turnaround time is around 10 to 15 days after getting government approval. The license can be downloaded online after approval.
• Validity: Trade licenses issued by most states are valid for 1 year. They can be renewed at the end of each year by paying the renewal fee.
• Penalties: If a person commences with trading before obtaining a trade license or if he does not comply with the rules and regulations for trade license registration, then penalties can be imposed on him. Further, legal action can be taken against the person who is at default.

Conclusion

The trade license is one of the most important documents to start a business or a trade in a particular municipal limit. If you don’t have one, you will be penalized or even legal action may be taken against you. So, ensure to obtain one before commencing any trade. Ensure to keep all the required documents ready.