Overview

Business license is a certificate through which an entity is allowed to open a business and start a particular business in a particular area. Through a trade license, the state government controls the operation of a specific business from a particular locality. It ensures and ensures that there is no harm to the life or health of the citizens by activities done through trade.

Business licenses are issued with standards, safety guidelines and relevant laws to ensure how business is being conducted within the state and how to protect the community. Trade licenses are monitored and issued by the state government to regulate trade and business within the city.

Business entities not complying with the rules of commercial licensing may face heavy fines. Business owners therefore have to apply for business licenses to the specific state authority without later delay. Trade license registration is time consuming and is an expensive process that is discussed.

Categories

Following are three categories under which a trade license is issued:

• Industrial license This license is granted by a business engaged in small, medium and large scale manufacturing industries.

• Shop License This license is issued to the business involved in carrying out dangerous and aggressive activities like fireworks maker, candle maker, firewood shop etc.

• Food & Shop Establishment License

  This license is obtained by the business engaged in food business such as restaurants, hotels, canteens, food stalls etc.

Importance Points

Business licenses are permitted to trade within the special area issued by the municipal authority. Trade license is important for the following reasons:

• Monitors business running in a particular area
• To ensure that the general public is not harmed due to improper conduct of business.
• It ensures applicable rules, regulations and standards, which are duly followed.
• It regulates business by banning certain business activities.
• Monitor the responsibilities of an entrepreneur in relation to the business.
• A trade license holder is certified that no immoral or illegal activity or trade has been conducted.

Renewal

The trade license is issued by the municipal authority with one year of validity and is required to be renewed every year before its expiry date. Typically, the license is renewed every year from 1 January to 31 March. The renewal is done thirty days before the end of the application, with the following documents attached:

• Original copy of business license issued
• Challan copies of previous year
• Property tax paid up to date of renewal application

Main points

Following The points for better understanding of business license:

• A business license is issued by a municipal authority that can be used exclusively for the business and occupation that is issued for it.
• The rules, procedures, timelines and fee structure for trade licenses differ from state to state.
• Registered business has better goodwill and competitive advantage than a person with any trade license.
• The business with such a license depicts the image of being ethical and carrying on legal business activity.

Registration Process

Trade license can be obtained online and offline. However, the official websites for applying online may vary by state; These are the same in all states to follow the steps given below:

• The applicant will apply to the licensing authority of a particular municipal boundary where the business is located.
• The applicant will submit the application form containing complete information such as:

• 1. Trade License Details

  2. Name and address of the applicant

  3. Business Name and Address

  4. Pre-issued license type

• Once the form is submitted along with the required documents, the applicant will have to submit the applicable fee for registration.
• After the registration process is complete, the applicant will get the transaction number on their registered mobile number for future reference.

Required documents

Various types of documents are required to be followed along with the application for Trade License registration:

• Application as per prescribed format
• In case the applicant is Company, LLP, or firm: COI, MOA & AOA is required
• Company PAN
• An individual applicant has to submit his Aadhaar and PAN
• NOC from immediate neighbor regarding any objection to carry on such trade or business.
• Paid in the form of evidence of latest municipal tax such as receipt, tax invoice, etc.
• Narrative certificate and extracts
• Layout of approval plan