What Is Trade License And How Can You Get It

Every trade that you do has a legal authorization associated with it. Without the approval of the government, you can’t have that legal authorization and can’t do that trade. Such authorization is often simplified in terms of license.

Trade license is an umbrella term which means permission given to the applicant to do a particular type of business in a particular location. The license can depend upon the following factors:

1. The type of business
2. The location of business
3. The hardware involved with the business.

Why trade license was introduced in India?

India is a hub of multiple types of businesses. These businesses need oversight of the state governments and municipal corporations. Without it, the traders can cross over in fraudulent territory where their employees and the customers, both can suffer. Following are some of the reasons why trade license is important in India:

1. It ensures that no trader is doing any unethical business
2. It ensures that every businessman follows the guidelines setup by the departments.
3. It provides quality assurances to the customers.
4. To protect the environment. For example, no one can establish chemical factories and industries near residential areas.

Trade License online rules even say that if a trader is seen running a business without the right trade license, the business is shut down instantly. And, there is also a possibility of prison term.

Different types of trade licenses

If you want to move forward and apply for trade license online, you should have an idea about the types of licenses that are available to you:

1. Industry Trade License: These licenses are issued to small, medium and large scale industries.
2. Shop Licenses: Shop Licenses are issued to specific niche of traders that are considered a bit dangerous like Firecracker sellers, candle sellers, Barber shops etc.
3. Food establishment licenses: FSSAI Licenses are kind of trade licenses issued to restaurants, food stalls, canteens, meat and vegetable sellers (not the ones who sell on the carts), bakeries etc.

How to become eligible to get the trade license?

Before going through the trade license registration procedure, you should be aware that not all are eligible. Following is the list of traits. If you belong to any one of them, you’ll be deemed ineligible to acquire the trade license:

1. The person(s) who is less than 18 years of age.
2. The person(s) who have criminal record.
3. The person(s) who are not running legally permissible business.

If you don’t fall in any of the above categories, you can think about acquiring a trade license.

Documents required to acquire a trade license

There are multiple types of trade licenses and as such, there are different documents required to acquire them. That said, the common trade license documents that are required are as follows:

1. Application of the trade license:
2. PAN card of the applicant
3. Certificate of Incorporation/Partnership Deed/MOA/AOA of the applicant’s company
4. Aadhar Card of the applicant
5. NOC of the neighbour
6. Katha extracts
7. Katha certificate
8. Architecture of the building of business
9. Sanction plan
10. Certificate of occupancy.

Once you file the application of trade license, you’re going to receive the answer from the respective department within 7 to 10 days. If there are issues with the application, your application can be rejected.

How to avoid trade license application rejection?

Even if you think you’ve filed the application of trade license correctly, the cloud of rejection always looms over your head. So, how to avoid it? The way is quite simple. All you need to do is contact trade license experts. Such experts know how to navigate the legal minefield of trade license registration. Additionally, the trade license fees that they ask for is near nominal.

So don’t wait, start the business of your choosing by acquiring the right trade license for it.

Also read about startup registration in India.

Author: Dushyant Sharma

Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.