Whether it is the municipal corporation or the state government, every business organization needs a trade license. This license specifies what they can and cannot do in terms of their business operations. In addition, online trade licenses are required to take advantage of government benefits. Various levels of government issue licenses to different types of businesses, such as municipalities, district administrations, or even states. There are rules and regulations specific to each state in India, so staying up-to-date about them is essential.
How does a trade license work?
Trade licenses have a simple concept. There are a number of certificates of permission for trading that are given to applicants in order for them to do business in a certain field or area. With the help of the certificate, traders can start their operations in an effective manner. There is a separate trade license required for every type of business. It is also necessary to have a fresh trade license in place in order for the business to continue operating if it is sold or otherwise transferred from one owner to another. It follows that trade licenses cannot be transferred from one person to another.
Why was Trade License Introduced?
Nearly forty years ago, the concept of trade licenses was introduced in India. This area is exclusively regulated by the Municipal Corporations under the jurisdiction of various State Governments on behalf of the people. An online trade license is basically the government’s way of ensuring that the business is following all the laws and guidelines that are applicable to it and has made sure that the business is doing everything in its power to comply with those laws. In addition, it is responsible for preventing or detecting unethical business practices occurring. Further, the grant of a trade license implies that the costs associated with doing business, such as pollution of the environment, do not have to be borne by the general public, and that the responsibilities associated with managing such risks can be effectively transferred to the business.
What is the eligibility for trade licenses?
The following criteria must be met in order to qualify for a trade license:
- There must be no criminal record on the applicant’s record.
- It is necessary for the applicant to be over the age of 18.
- In order to be legally acceptable, the business proposal must meet certain criteria.
What is the process for issuing a trade license?
It is the municipal corporation of the respective state government which is responsible for the trade license check in order to determine whether or not the business has its registered office in the state where it will be operating and can be inspected by the government. Prior to the issuance of a business license, different municipal corporations require a variety of inspections, such as those pertaining to health and safety, as well as other requirements.
How do I obtain the required documents?
1.) Trade license requirements vary depending on the type of business being established.
2.) PAN cards and incorporation certificates are required for firms, limited liability companies, and companies.
3.) The municipality’s most recent property tax payment receipt.
4.) It is mandatory to have an Aadhar card for individuals.
5.) A letter of consent from your neighbor next door.
6.) A consent letter or lease agreement from the owner.
7.) A copy of an authorized layout plan for your trading building, illustrating the layout of all the rooms.
8.) Khata extract
9.) Khata certificate
10.) Certificate of occupancy
11.) Plan for sanctions
How long does it take to get a fresh license?
In order to receive a fresh trade license, all eligibility criteria must be met, trade license checks must be conducted, and the trade license payment must be made. It normally takes 7-10 days for the certificate to be issued in metropolitan cities. There may be a need to spend more time in small towns and rural areas.
Is there validity to the data?
Trade licenses are issued with a validity of one year, after which they must be renewed annually, generally between the 1st of January and 31st of March, to remain valid. In order to renew a license, you must submit a renewal application within 30 days of its expiration, otherwise, you will need to apply for a new license.
Renewals require the following:
- The last trade license
- Challans from the previous year
- Tax receipt for the latest payment