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Introduction



Trade license is a document which authorizes the applicant to commence business or trade in the particular area or locality. Simply, it is a registration under rules and regulations of the State Municipal Corporation. It assures that the business is being carried out by adhering all the guidelines or standard of safety issued by the State municipal corporation. Moreover, it doesn’t allow the licensee to do any other business.


To obtain the trade license, applicant must know the jurisdiction under which their business is being operated. The applicant has to do the application process within 30 days of the commencement of the business within limits of the municipal corporation. The commissioner of the Municipal Corporation grants the license. Issued license requires renewal on annual basis. If any business is being carried out without the permission of Municipal Corporation, it is considered as illegal and hefty penalties will be imposed on the business entities.


Why trade license?



Trade license is mandatory for the business entities -

  1. Provides legal protection.
  2. Increases brand value.
  3. Ensures safety of the consumers.
  4. Low tax rate.
  5. Less compliance as it follows the safety standards laid down by the state municipal corporation.
  6. Saves from the hefty penalties imposed by the department.
  7. Helps in starting and smooth functioning of the business.

Documents required for obtaining trade license:




The State Municipal Corporation has enumerated the list of documents which are as follows:-

  1. PAN card of the Applicant
  2. Aadhar Card of the Applicant
  3. Photograph of the Applicant
  4. Proof of premises- Rent Agreement/ Electricity bill/ Ownership proof
  5. A latest municipal property tax receipt in case the premises are owned, else lease document or consent letter of the owner of the property where the business is registered..
  6. NOC of the Neighbours (nearby property owners)
  7. In case of Company, Company Incorporation Certificate, MOA, AOA, PAN card, etc.
  8. Certified layout plan of the office
  9. Cancelled cheque and bank statement

Documents required for the renewal of Trade License:

In India, Trade License renewals take place between January 1 and March 1 of every year. While applying, the licensee should present the following documents for verification of the trade license-

  • The original trade license
  • All tax receipts, showing up to date payments of the taxes to the government.
  • Past payment challans.

Categories of Trade License:



Mainly, there are three categories of trade license which are listed below-

  • Industries license: Inclusive of small, medium and large scale manufacturing factories, etc.
  • Shop license: Includes Dangerous and offensive trades like a sale of firewood, cracker manufacturer, candle manufacturer, barber shop, laundry (dhobi) shop, etc.
  • Food establishment license: Applies to Restaurants, hotels, food stall, canteen, the sale of meat & vegetables, bakeries, etc.


Following conditions must be fulfilled for obtaining license-

  • The applicant must be of sound mind and more than 18 years old.
  • The applicant must not have any criminal antecedent.
  • The business should be legally permissible.

    • Procedure for getting Trade License:


    The applicant has to follow these steps: