TRADE LICENSE
                     




WHAT IS A TRADE 
LICENSE?
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.
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.
Eligibility for getting a trade 
license
1.   Person must have crossed minimum ages (18    
years)
2.    Person must not have any criminal records.
3. Business must be capable of executing legal 
work.
3 important points before you apply it:-
1. Application has to made before you start  
running your business.
2. Renewal of application must be filled in 30 
working days before expiry of the license.
3. Once license issued and it has to be maintained 
on annual basis.

HOW IS TRADE LICENSE 
DIFFERENT FROM 
REGISTRATION?
The registration of the business is 
important for giving it a legal identity of its 
own. It depends upon the promoter to 
decide upon the type of entity he wants to 
establish depending upon his business 
scale. However, it is mandatory for every 
entrepreneur to obtain the trade license 
before the commencement of any 
business activity. If any person is found 
conducting the business activity without 
obtaining the license, the business will be 
considered as illegal and heavy penalty 
may be levied upon the owner.

BASIS OF COMPANY REGISTRATION TRADE LICENSE
DIFFERENCE
STRUCTURE The new business entity is The existing entity takes the 
formed to carry on the approval for carrying a particular 
business. type of activity.
VALIDITY Valid for lifetime once allotted. Valid for one year.
RENEWAL They are not renewed as they They are renewed after their expiry 
are valid for a lifetime.  by submission of necessary 
documents.
PROCESSING PERIOD ROC takes 3-4 days to issue Concerned authority takes 7 to 10 
Certificate of Incorporation. days for processing of an application. 
 
ELIGIBILITY Directors should not be minor. The applicant must have crossed 18 
The company should be years of age with no criminal record. 
registered with a minimum Business shall be legally authorized 
requirement of capital. by its object to carry on such other 
activity for the trade license is 
acquired.
TYPES Private Limited, Public Limited, OSP license, Drug license, etc.
OPC, etc . 
When should License be Acquired?
Every business entity planning to start i’ts business operations 
shall be required to obtain this license within 15 days of the 
commencement of any activities. The activity consists of 
manufacture, exchange or even storage of any commodity. In 
some states it is mandatory to apply for this license 3 months 
prior to the commencement of any business activity.
Who can issue a Trade 
license?
It is issued by the licensing 
department of the municipal 
corporation in various departments like 
industries, engineering, health etc.
The government of India authorizes the 
license in a manner to regulate in 
cities across the country. It grants 
permission by the way of letters or 
documents/certificates to carry on any 
business or trade where it is located. 
The issuance of the license varies from 
state to state depending on the local 
government agencies (Municipals) rule 
and regulations.
REGISTRATION 
 PROCESS
For making an application for a trade license, the applicant is 
required to submit the application to the concerned 
authority (Municipal Corporation) along with all the required 
documents. The documents required for the same are:
1.   Application in Form 353 or 354, as the case may be.
2.  If the applicant is an individual, his/her Aadhaar Card is 
mandatory.
3.  If the applicant is any Company, LLP, Firm, etc, their PAN 
Card, along with incorporation certificate or document.
4. Latest Tax Payment Receipt.
5. Consent letter or Lease documents from the property 
Owner.
Generally, Trade license application is processed within 7-10 
days in metro cities. In other smaller cities and rural areas, it 
takes longer.
RENEWAL OF TRADE 
LICENSE
Trade License Renewal
It is not a one-time license. It shall be renewed on periodical basis. The requirement of 
payment of annual fees for the continuity of the license is also mandatory in some states and 
cities. The trade license renewal is done from 1st January to 31st March of every year. The 
application for renewal shall be made atleast 30 days before the commencement of the year 
for which application is sought for. A fine of 50% of the license fees is levied in case of any 
delay in the trade license renewal process.
The following are the documents which are to be submitted with the application for trade 
license renewal:
 1. Copy of the Original License.
 2. Challans of the fees paid in the previous years.
 3.Tax Payment Receipt.
Categories of Trade License
Type A Category
These licenses are issued for the business activities related to consumable items and 
eating hubs.
Type B Category
These licenses are issued for such trades which makes use of locomotive power in order to 
function, such as industries, workshops, flour mills etc.
Type C Category
These licenses are issued for trade involving dangerous activities such as firewood, 
charcoal etc.

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.’
Online Trade License
For obtaining Trade License, an 
online application can be filed with 
the authority by the professionals. 
For obtaining online trade license, 
documents are required to be 
submitted with the prescribed form. 
After this, trade license is granted by 
the authorities.
Appeal for Denial of Online Application
In case your application for online Trade 
License is denied on any grounds, then, you 
can file a petition to Standing Committee 
(Health) with a copy of letter of denial to 
consider the matter.
What are the Documents Required?
• Utility Bill of the premises in which the business is going to be 
carried on.
• Rent Agreement, in case the premises is on rent/lease.
• Fire Department NOC.
• Municipal Tax Receipts.
• Registration Certificate under Shop and Establishment Act or 
Infrastructure development department etc.
• In case the premises is managed by any person other than the 
owner, then the photograph, ID proof and address proof of such 
manager.
• ID proof of the applicant.
• PAN card of the company, in case the applicant is a company.
• Copies of blueprint of the premise.
Penalty Provisions
The concept of trade license is introduced with a view to discourage any illegal activity and ensure the 
maintenance of the environment. This is ensured by making sure no industrial or manufacturing related 
activities are conducted in any residential area. There are various other provisions and rules and 
regulations are required to be followed by the registered people.
In case of non-registration of trade license and starting any activity before completing the pre-requisite of 
trade license, the person in violation will be liable to pay penalty and might also be liable for legal action 
against him.
Important points to be noted
a. The Trade license issued by the municipal authority is exclusively for the Trade 
or business.
b. Rules and regulations in relation to the issuance of a trade license varies from 
state to state
c. The fee structure for the issuance of the license differs based on the nature of 
the business
d. A business granted with this license will enjoy a greater goodwill than an 
unregistered entity and subsequently attracts more customers and investors.
e. This also ensures ethical business practice is performed by the traders as they 
have to follow safety measures and guidelines.
f. If a person doesn’t apply for the license or before the grant of the license as 
required under law and commences any trade or business activity than the relevant 
government (authority) can impose fines and penalty as per their rules and 
regulation. The failure to comply with pre-requisites of the trade license can also 
result in the closure of a business.

THANK YOU