There is a tendency for Indian businesses to operate without mandatory compliances in order to gain an edge over their competitors. It is inevitable that those who engage in such activities sooner or later will be caught by the relevant authorities and compelled to pay hefty penalties for their actions. In order for every business entity to be able to do business, it is necessary for them to obtain a trade license without exception. There is a good chance that you might want to think twice if you are one of those people who consider a trade license to be a burden. Throughout this article, you will learn about the various advantages of a trade license and why it is so important for the organization to have a licence in the first place.
The benefits of having a trade license
It is important to note that a trade license has a number of benefits, including the following:
1. Enhance the credibility of your organization
All businesses generating revenue through the sale of their products and services are required to obtain a trade license, which is a well-known fact. With the help of such licenses, the customers can feel confident that the company is a law-abiding organization dedicated to ethical business practices. Additionally, this license increases the entity’s visibility in the market where it operates. this license. Therefore, the entity would be able to establish trust over time with its target market.
2. Improve financial aid exposure
To ensure growth and enhanced productivity, every organization requires funds at some point. Any entity can obtain loans from the financial institution while under the influence of the trade license. It is generally accepted that a trade license can act as a significant gateway that opens up the possibility of securing an inflow of financial assistance, in turn, triggering the development of the organization. I believe that this is one of the most valuable and powerful benefits of a trade license that you will ever come across in your entire life.
3. Build goodwill in the target market
An entity’s goodwill is also enhanced by a trade license. It’s still common for business owners to disregard compliance in order to gain extra profit. While this might benefit such business owners in the short term, they may struggle to survive in the long run. Those with trade licenses are more likely to focus on their core competencies, and gain the trust of their targeted customers. As a result, they will be able to build a solid foundation for their business, which will lead to increased goodwill in their target market over time.
Click here to know more about what is a trade license.
4. Investors need motivation
Credibility and authenticity cannot be gained overnight. An organization must follow the law and maintain compliance without a single deviation in order to reap these benefits. The business can even secure significant investments from outside entities keen to inject additional funds to reap fiscal benefits through such commitments.
5. Reduce legal confrontations
A business entity that ensures 100% compliance with compliances is less likely to get into legal trouble. Their growth would be more seamless if they were registered than unregistered firms. If the organization bypasses the law intentionally, it will never be subject to legal obligations.
6. Ensure that the organization has better sanitation
In many businesses, avoiding trade licenses is a result of maintaining hygiene within the premises. Many organizations considered sanitation management a pointless expenditure, and they sought additional funds. I would like to remind you that better sanitation could dramatically improve the working environment and increase productivity. It is important for the existing employees’ wellbeing that the company working under a trade license provides better sanitation. The organization may face hefty penalties if it fails to take this step.
7. Encourages ethical behavior
Organizations holding trade licenses are obligated to avoid unethical business practices. If an organization is found to have engaged in unfair practices such as exploitation of workers, evading tax obligations, producing faulty invoices, and disposing of waste in water and the air, it is more likely to receive a penalization from the appropriate authorities. It is, therefore, obvious that trade licenses are also able to provide indirect benefits to the entities outside the organization, which are somehow connected to the organization.
Trade licenses: some noteworthy points
- An organization that generates revenue via trading activities must acquire a trade license.
- All trade licenses are issued by municipal corporations.
- An entity must renew its trade license on the online portal after a year of validity.
- Approval of the license application typically takes seven to ten days.
- An inspector would inspect the business premises as part of the application review process.
- A trade license can be revoked if unethical business practices are engaged in.
There is no doubt that a trade license can render substantial benefits to a company, which could in turn result in substantial revenue. As a legal entity, a trade license has countless benefits for your business. You should obtain a trade license right away if you are planning to start a new business. In addition to significant penalties, those who attempt to conduct business activities without a trade license for more than a month may come under scrutiny of governing authorities. Therefore, if you really want to operate your business free of legal restrictions, you should act now and submit applications on the municipal corporation’s website.