Why is having a Trade License Important?
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.
Who issues a Trade License?
The trade license check is done by the municipal corporation in the respective state government where the business will have its registered office and also where the operations will be carried out. Different municipal corporations require the business to pass various checks, such as those regarding health and safety etc. before the license is issued.
What are the Documents Required?
1.) The documents required for trade license vary depending on the kind of business intended to be set up.
2.) PAN card with incorporation certificate is required for firms, LLP’s and companies.
3.) The most recent municipality property tax payment receipt.
4.) Aadhar card is mandatory in cases of individuals.
5.) NOC form from your neighbor next door.
6.) Letter of consent or lease documents from the property owner.
7.) An authorized layout plan of your trading building, showcasing all rooms.
8.) Khata extract
9.) Khata certificate
10.) OC or occupancy certificate
11.) Sanction plan
When is the Fresh License Issued?
The fresh license is issued when all the eligibility criteria are met, trade license checks are carried out and the trade license payment has been made. Metropolitan cities normally take 7-10 days to issue the certificate. In small towns and rural areas, more time may be needed.
What is the Validity?
A trade license status issued remains valid for one year and thereafter must be renewed every year, generally, between 1st January and 31st March every year. Renewal applications need to be made within 30 days of expiry otherwise, a fresh license has to be applied for.
Renewals require:
1.The last trade license
2. Previous year’s challans
3. Latest receipt of paid property tax
