What is trade license?

The common definition of trade license is a bit straight forward and somehow legalistic. A trade license documents allow you right to operate your business in a particular area. It does not refer to any kind property ownership and does not allow to do any other business than for it is issued.

The license department of municipal cooperation issues licenses in different departments like health, industries, and engineering.

The government authorizes legal agreement of trade license in order to regulate in domestics and international cities. It provides permission letters or documents to carry on trade or business where it is located. The issuing of trade license vary depending on state/local government agencies (Municipals) rule and regulations.

In last 40 years, trade license is introduced in India and is regulated by the state government through municipal corporation acts. It is a way to regulate and carry out any form of business from a particular locality. It has ensured that there is no severally affected by health hazard and nuisance by improperly carrying a trade. The fee for trade license is varied in different states. Some cities gather business license on annual or yearly fees and other cities receive depending upon on business annual sale.

The main goal of trade license is restricted to people to control business location from executing any kind of business from their resident areas by maintaining the business environment and locality environment.



Categories of trade license:-

  • Food establishment license: hotels, restaurants, canteen, food stall, bakeries, the sale of vegetables and meat etc.
  • Industries license: small and large scale manufacturing factories, cyber café etc.
  • Shop license: a barber shop, dhobi shop, candle manufacturer etc.

Eligibility for getting a trade license:-

  • Person must have crossed minimum ages (18 years)
  • Person must not have any criminal records
  • Business must be capable of executing legal work

Documents requires:-

  • Lease documents/agreement in case of premises are on lease
  • Occupation certificate
  • ID proof of applicant (for individual it is aadhaar card and for company, it is PAN card & certificate of incorporation)
  • Registration certificate from concerned authority

3 important points before you apply it:-

  • Application has to made before you start running your business
  • Renewal of application must be filled in 30 working days before expiry of the license
  • Once license issued and it has to be maintained on annual basis

Processing time:-

Trade license has to be obtained within 7-10 days in metropolitan cities, if documents are not filled according to the rules, it will take time as in 35- 40 working days. It has to be obtained within 30 days of commencement of business in other small cities and rural areas.

Significance of trade license:-

One who runs a business in a smooth way, he/she needs to get trade license as it is compulsory in law. You are familiar with driving license and it is quite similar to trade license. Without driving license, he will get penalty notices for it. You can analyze it with the case of trading license. In short, ‘one business who does not have trade license can be considered illegal and have to submit the massive amount of money on their nature of business.’

“Perform a free Trademark Search before applying for it.”