A trade license is an official document or certificate issued by the Municipal Corporation of state granting permission to applicant to engage in a specified trade or business activity within a designated area.
It’s important to note that a trade license restricts the holder from engaging in any trade or business activity other than the one for which it was issued. Additionally, the license does not confer any property ownership to the holder.
The primary objective of obtaining a trade license is to ensure that business activities within a specific area are regulated and controlled. This licensing system helps local authorities maintain public safety, health, and welfare by overseeing and managing the urban business landscape. By mandating a Trade License, the government ensures that businesses do not negatively impact the surrounding environment and community.
There are various types of categories of Trade Licenses issued by the Municipality are like for food services establishments, issued to units in Manufacturing and processing and for the goods and services in high risk nature.
Before applying for the trade license, the applicant should have or provided the various details or documents as affixed in the attachment section of the application. The required docs and information are specified below:
- GST Registration Certificate
- MSME Udyam Registration
- Self-attested copy of Ownership document
- Latest Electricity bill
- Audited balance sheet, profit and loss of last 3 years
- Result of Operation of last 3 years signed by Chartered Accountant specifying UDIN number
- Banker’s Report for the financial position of the applicant
- Declaration by the applicant regarding the details provided in the application
- Pan card
The procedure for applying the trade license-
1. Filing the application form: There are 7 step in the application of the trade license. Starting from the first step to the last step, the details of the entity, details of the authorized person, branch details and details of plant and machinery are required to be filled as like shown in the attachment annexed with the application.
2. Submission of application: On the last two steps, the attachments, as defined after the process of the application, are required to be annexed along with the application, for giving a reference to the authorities about the investment of the entity in the plant and machinery, proof of the registered address of the entity and the proof of the identity of the authorized person, as specified by the applicant. After affixing the attachment, the application is submitted and a reference number is generated for further process.3. Municipal Inspection: Sometimes, before approving the application for the trade license, a municipal inspector may visit your business location to verify the details provided in your application and ensure compliance with local health, safety, and environmental standards. They can inspect the premises, checking the production process of the goods in case of the manufacturing unit and checking other safety measures adopted by the entity.
4. Obtain the License: After the application is approved, a mail is receive annexed with the entity’s trade license. The time frame for approval can vary but generally takes a few weeks.
The municipality corporation also send the copy of the Trade License on the registered address of the entity by the way of the post.
5. Renewal of Certificate: The license is typically valid for the period of one year. So it is required to be renew before the expiry of the license by paying the requisite fees.
Now, what are the advantage, get the entities for applying the trade license and why it is needed to apply. There are certain advantages for applying the trade license are-
1. It ensures the compliance of the legal framework, applied on the entity.
2. Require businesses to adhere to safety standards and regulations, contributing to the public’s overall safety.
3. Enhance the credibility of your business, instilling trust and confidence among stakeholders.
4. Helps business entity to access to the government schemes, incentives and promotions for the specified organisations.
5. It facilities expansion on applying to the government tenders and projects.
Author Bio
As far as I understand .. person registered as MSME is exempted from provisions of obtaining a trade license . Please correct me if I am wrong.