Trade license Registration:Everything you need to know

by Swarit Advisors Financial Service Consultant

Trade license or corporation license is a document that allows an individual to start a business. The business could be of any type. It is regulated by the State governments of the concerned states under the Municipal Corporation Acts. Trade License Registration is compulsory before starting any business. it is illegal to run a business without proper registration.

Trade License

Trade License Registration Process

The steps involved in the Trade License Registration process are as follows-

  •         Choosing the category of the business.
  •         Filling up and applying to the concerned Municipal Corporation along with all the necessary documents.
  •         The license will carry a validity of one year after which it has to be renewed.
  •         The application needs to be filed within 30 days of starting to operate a business.

Trade License Registration Fees

The cost of the trade the license depends on the company from where the individual is applying for the license. 

Payment methods for Trade License Registration

The payment for Trade License registration can occur in two major ways:

  •          Online
  •       At the MOH bank or office

Duration for Trade License approval

The license approval takes up to 7-10 days. In some cities, it may take longer in comparison to other cities.

Documents Required for Trade License Registration

The crucial documents for Trade License must be submitted by the applicant to the Municipal Corporation situated where he intends to start his business. After the approval of the documents, the Municipal Corporation issues the license.

  • Application of the trade license form
  • Municipality Property Tax Payment Receipt
  • Aadhaar Card
  • Katha
  • Form 353 duly filled
  • Letter of consent from the owner
  • Lease documents
  • A blueprint of the premises for certain types of businesses
  • Tax receipts
  • Sanction plan
  • Occupancy certificate (OC)
  • City survey map of the property
  • Other compulsory documents

Eligibility Requirements for Trade License

  • Individuals who are above 18 years’ old
  • Individuals who do not hold any criminal record
  • The goods sold should not be illegal

Importance of Trade License

It is a necessity for individuals to start a business only after receiving the trade license and not before it. It has been made compulsory for the purpose of regulating the business in an appropriate manner.

 An advantage of a trade license is that it ensures that the products sold in that particular business is entirely safe from all kinds of health hazards for the public.

 Once acquired, the businesses require to run according to certain rules and regulations and also maintain a certain standard when it comes to the kinds of goods sold and services provided.

Trade License Types

The individuals who wants to start a company are aware of the fact that in order to before applying for a trade license, they need to make a choice between the trade licenses as they are categorized into three types. 

1. Industries /Industrial license

Industries license is essential for the small, medium and large scale manufacturing factories.


2. Shop license

Shop license is required if the business deals with the sale of hazardous products like Firewood, Fire crackers manufacturing, candle manufacturing. Barber shops and laundry shops also need to acquire this type of license.


3. Food Establishments license

An individual or a group of individuals that want to start a food or a beverage business, require to apply for a food establishment license.

Restaurants, hotels, food stalls, canteens, bakeries, shops selling meat or vegetables all fall into the category of a food license. 

In order to start a Restaurant or any business similar to that, some other necessary licenses are required, apart from the trade license. Let’s go through some of those licenses-


  • Food Safety and Standards Authority License - FSSAI
  • Liquor License
  • Health/ Trade License
  • Eating House License – It is provided by the Licensing Police Commissioner of that city where the outlet is supposed to open.
  • Shop and Establishment Act- A compulsory registration under the Act is required before starting a food business in India.
  • GST Registration: One of the mandatory registrations is to register under GST in order to ensure a smooth and hassle-free run of the restaurant.
  • Fire department
  • Lift clearance
  • Environmental Clearance
  • Music License
  • Signage License

Advantages of Trade License

  • A business that has a Trade License enjoys goodwill and attracts a large number of customers and investors as compared an unregistered business.
  • It protects the owners against various types of liability.
  • Companies perform better with regards to business activities and thus attract many investment groups and other business organizations.
  • The business becomes legal after obtaining the License. The License ensures safety measures and guidelines.
  • If a person does not receive a Trade license and startthe business than theGovernment will impose fines and penalties on the individuals. It can also result in the closure of such businesses.

Trade License Renewal

The businesses need to renew the trade license every year. The application for renewal should be made 30 days before the commencement of the year for which the license is obtained.

Documents required for Trade License Renewal

  • Original copy of the current Trade license
  • The receipt of previous year fines
  • Receipt of the tax paid recently 

Trade License Renewal Duration

Trade license renewal is done between 1st January to 31st March every year.



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About Swarit Advisors Junior   Financial Service Consultant

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Joined APSense since, December 24th, 2019, From Noida, India.

Created on Feb 19th 2020 03:48. Viewed 538 times.


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