Trade License

Trade License

  • Document collection
  • Drafting and filing application for trade license
  • Advisory on the regulatory requirement
  • Application to local authority
  • Frequent follow-up with the department
  • Document collection
  • Drafting and filing application for trade license
  • Advisory on the regulatory requirement
  • Application to local authority
  • Frequent follow-up with the department

Trade License - An Overview

Nowadays, every business must obtain a Trade License for commencing its business operations. Trade license is issued either by the State Government or by respective Municipal Corporation. It acts as permission for the business to carry out its functions and business activities. However, this license does not confer any other right on the applicant than the one specified.

It shall be noteworthy to take into consideration that the Municipal Corporation issues a trade license only after consulting with the departments like Estate, Engineering, Health, and any other of the same type.

The applicant is required to obtain a Trade License by applying for the same to the Municipal Corporation. The said application is required to be submitted along with the necessary documents thirty days before starting the business. Moreover, every business regardless of the business activity is required to obtain a trade license.

What is a Trade License?

A Trade License is a certificate or a document by way of which an entity is allowed to start a trade or business in a particular area. By way of Trade License, the respective State Government regulates and administers the business operations of a particular entity.

Moreover, this license regulates and makes sure there is no harm caused to the health or the living of the citizens, by way of the activities carried out through trade. A Trade License is issued only after the due abidance of safety guidelines, standards, and pertinent laws.

The Business entities who are not complying with the prescribed rules of the trade license will be liable to face a heavy penalty. Thus, it is obligatory and compulsory for every business owner to obtain a trade license without any subsequent delay.

What are the Eligibility Criteria for Trade License?

The following listed are some of the requirements prescribed by the Government for obtaining online trade license:

  • The applicant must have attained the age of 18 years.
  • The applicant must not be having any previous criminal records.
  • The Business concerned must be of legal nature.

Documents Required

The documents required for the Trade License are as follows:


Benefits of Trade License

It’s a well-known fact that a trade license is compulsory for all the businesses generating revenue through their product and services. Such a license gives the customers assurance that the organization is a law-abiding entity committed to ethical business practices. Also, this license increases the visibility of the entity within the market in which it is operating. Consequently, this would let the entity establish trust among its target consumer over time. 

Every organization needs funds at some point in time to ensure growth and enhanced productivity. Under the influence of the trade license, any entity can secure loans from the financial institute without messing up any constraints. Generally speaking, a trade license can act as a substantial gateway that ensures the seamless inflow of financial aid, which, in turn, triggers the organization’s development. Perhaps this is an unparalleled benefit of a trade license that one could ever come across. 

Increasing entity goodwill is another blissful benefit of a trade license. There are still many business owners out there who are willing the put compliances out of the equation just to gain extra profit. Keep in mind that this might render some short-term benefits to such business owners, but they might struggle to survive in the long run. Whereas, entities with trade license have a high chance of focusing on their core competencies, and garnering the targeted customers’ trust. This would further let them lay a strong foundation for their business, which inevitably ensures the improved goodwill in the target market in the long run.

Authenticity and credibility is something that you can’t gain overnight. To reap such benefits, an organization has to work in the direction of the law and maintain compliances without the slightest deviation. Such commitments can even help the business secure significant investments from the outside entities that are keen to inject additional funds to reap fiscal benefits.

Apparently, business entities that ensure 100% conformity with compliances are less likely to mess up the legal affairs. It would allow them to flourish some seamlessly than unregistered firms. Under no circumstance, the organization would come across legal obligations unless they intentionally bypass the law.

Maintaining hygiene within the business premises is one of the key reasons why most businesses try to skip trade licenses.  Sanitation management seeks additional funds, and nearly every organization considered it irrelevant expenditure. Remind you better sanitation could dramatically improve the working environment and ensure increased productivity. The entity that works under the canopy of trade license needs to provide better sanitation for the existing employees’ wellbeing. Any failure in this direction could force the organization to address hefty penalties.

Practically, every organization that holds a trade license is under the obligation to avert unethical business practices. The organization that indulges with unfair practices such as exploiting workers, avoiding tax liabilities, generating faulty invoices, and disposing of waste in water and air is more likely to get penalized by the concerned authorities. Henceforth, trade licenses also render indirect benefits to the outside entities connected with organization in one way or another.

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Frequently Asked Questions

A Trade License is used for carrying out the trade activities for the Industrial Business, Food Establishment Business, and for the local shops.

If for any reason the applicant has been denied of the Trade License, he can then submit a request to the Standing Committee along with a copy of his denial letter.

Yes, getting the license renewed has been made compulsory requirement by the government. Failing to do so, will attract either a penalty or a fine.