Trade license is the certificate that gives permission to the applicant to commence a particular trade or business in a particular location. It is issued by the State Government. Trade license is being regulated through municipal corporation acts by the state governments. It has been made necessary by the government so that no one is carrying out any unethical business practices. The issuance of the license varies from state to state depending on the local government agencies (Municipals) rule and regulations.
- Trade license is issued to regulate businesses within a particular locality or municipality.
- Businesses with trade license are more reputed in the eyes of consumers. Consumers would have more confidence in their services.
- By securing a license, businesses would not use their residential premises to conduct any business. Hence, this form of regulation ensures that businesses are regulated.
- Protect consumer’s interest against illicit trade activities; thereby increasing the goodwill of the of the business over time.
- The trade license issued by the authorities is valid for a period of one year and required to be renewed annually.
- In some states, the trade license is issued only in person after the verification from the concerned authorities.
- The applicant or individual must be a major. This means the applicant must be more than 18 years of age.
- The applicant should not have a form of convictions or criminal records.
- The business of the applicant must not be against any provisions of law in force.
Following are the mandatory documents needed for securing a trade license:
- Business’s address proof
- Applicant’s identity proof
- Aadhaar card
- Permanent Account Number, i.e., PAN of the applicant in case of proprietorship, else PAN of the firm.
- MOA, i.e., Memorandum of Association in case of Companies
- Incorporation certification in case of Companies
- Property tax receipt (latest ones) in case the business place is owned, else lease document or permission letter issued by the real owner where is business is registered.
- No objection certificate, i.e., NOC issued by the nearby property owners