What is a Trade License?


When starting a business, one needs to be aware of the legal regulations and compliances that are associated with its operations. One such essential license is the Trade License. A Trade License is a form of government approval provided through Municipal Corporation for a specific business in a specific locality. Such permission is granted subject to the adherence to relevant rules, guidelines, and standards as per the laws applicable in the area of operations.
Hence after the registration of the business form into a company, sole proprietorship, LLP etc, it is mandatory to obtain the Trade License before the commencement of any business activity. Operating without the Trade License is illegal and attracts heavy penalty in many states. The general time period within which the Trade License must be acquired is 15 days of commencement of operations of the business. The rule may vary for the states.

Who Regulates Trade License?

The local authority, Municipal Corporations aid the state governments in such regulations. The fees prescribed and the accepted modes of payment for the Trade License vary from one state to another. All the regulations regarding the Trade License are state-specific.  In Delhi, the Municipal Corporation of Delhi regulates the Trade License Renewal.
MCD issues a Trade License to the business establishments permitting business activities to be commenced under the DMC Act, 1957. It is mandatory for a person who intends to set up a trade in the jurisdiction of MCD to obtain trade/ storage license.
Where to apply for the Trade License?
An application for the Trade License has to be made either at a CSB or on the online portal of MCD. An applicant can submit the required documents at any CSB after mentioning the Acknowledgment Number provided upon making the online application.

What documents are essential for making an application for the Trade License?
The following documents require to be submitted for a fresh Trade License:
1.      Proof of legal occupancy of the unit
2.      Proof of establishment of trade
3.      Site plan
4.      Key Plan
5.      Proof of fire-fighting equipment existing at the unit (NOC)
6.      Proof regarding non-existence of unauthorized construction at the unit (NOC)
7.      An indemnity Bond for Rs.100/-
8.      An affidavit for Rs.10/-
9.      NOC from land-owning agency
10.  Deed of constitution, if any
An amount of Rs.500/- per application has to be submitted as processing charges.
How many days does it take to obtain the Trade License?
It takes approximately 20 working days from the date of payment of the required charges by the applicant for issuance of the Trade License renewal. It shall either be issued by hand to the applicant at the CSB or can be couriered to the provided address if it has been requested by the applicant.
Can a duplicate Trade License be applied for?
Yes. A duplicate Trade License can be applied for if the original is lost, mutilated, destroyed, etc. It can be issued upon the payment of Rs.100/- towards processing charges after the submission of the below mentioned documents:
a)      First Information Report (FIR)
b)      Indemnity Bond in prescribed format

2 comments:

  1. I have read your blog it’s very informative and helpful. Thank you very much for sharing your thoughts
    Trade license renewal Dubai

    ReplyDelete

  2. A trade licence is a paper or certificate that authorises the applicant (the individual looking to start a business) to start a specific trade or business in a specific place.

    ReplyDelete