What is trade license?

Whenever you want to run any business there are various licenses issued by the Government depending on the sector it deals in. But today we are going to brief on one of the license required before setting up the premises is Trade License.

Shop and Establishment Act governs the issue of trade license. A license which is issued by the Local Government (Municipals) signifies the Identification proof of any business trade. As it has provided the legal sanctity and also confirm that the trade is within the permissible rules and regulations of specific state.However, trade license cannot be misunderstood as the ownership certificate on the premises where such business is carried on.

Business categories for which trade license is required:

1.      Food establishment license

Issued to any trade which includes the business of serving and preparation of foods and beverages like hotels, restaurants, canteen, food stall, bakeries, the sale of vegetables and meat etc.

2.      Industrial license

Issued to any trade which includes any sought of Manufacture of industry, factory, flour mills etc

3.      Shop license

Issued to any trade which persist of hazardous substance or which came under the category of danger substance like barber shop, dhobi shop, candle manufacturer etc.

Procedure to apply for trade license:

The process of obtaining trade license has been relaxed by the Government over the period of time and the same can be done through online portal of respective states since it’s a subject matter. But the general procedure to be followed

1.      Submission of an application along with the fees to inspector for inspection along with the following details:

§  Name of the business, owner, manager of establishment

§  Address proof of the establishment

2.      After the inspection of the application, certificate of registration will be issued and inspector will register the name of premises in Register of Establishments.

Amendment to Certificate

If any kind of changes made in the certificate the owner will have to intimate about it within 15 days from date of change

Some important notes on legal technicality of trade license:

1. Application for trade license has to made before you start running your business

2.      Trade license has to be obtained within 30 days of commencement of business.

3.     This license will be required to be renewed annually or for any other period specified

4.      Renewal of the license to be done 30 days prior to expiring of license

What is trade license renewal?

If you taken a trade license make sure that it is not a one-time license. It needs to be renewed periodically. The trade license renewal period starts from 1st January to 31st March every year.

In some states annual fees needs to be paid for the continuity of the license.

The application for renewal shall be made atleast 30 days before the commencement of the year for which application is sought for.

Consequence in Delay of License Renewal

If you have made any delay in trade license renewal process fine of 50% of the license fees is levied.

Documents Submitted At Time of Renewal

·        Copy of original license

·        Challans of the fees paid in the previous years.

·        Receipt of Tax payment

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