Overview of Trade License
Every business nowadays has to obtain a trade license to begin its business operations. Trade license is issued either by the State Government or by the Municipal Corporation respectively. It serves as authorization for the company to conduct its roles and business activities. This license does not, however, confer upon the applicant any other right than the one specified.
It should be noted that after consulting with departments such as Land, Infrastructure, Health, and any other of the same sort, the Municipal Corporation issues a trade license.
By applying to the Municipal Corporation for the same the applicant is required to obtain a Trade License. The said application must be submitted thirty days before starting the company, along with the required documentation. In addition, any business is required to obtain a trade license online, irrespective of the business operation.
What is a Trade License?
A Trade License is a certificate or a document enabling an entity to start a trade or business in a given area. By way of a trade license, a particular entity's business operations are regulated and managed by the respective State Government.
Moreover, this license regulates and ensures that there is no harm caused to citizens' health or livelihood through trade-related activities. A Trade License shall only be given after due accordance with health protocols, regulations, and relevant laws.
Business entities are liable to face a heavy penalty if they do not comply with the prescribed trade license rules. Thus, obtaining a trade license without any subsequent pause is mandatory and necessary for any business owner.
What are the Eligibility Criteria to obtain Trade License?
Some of the Government's requirements for obtaining an online trade license are listed below:
- The applicant must have gotten 18 years of age.
- The applicant must have no prior criminal records.
- The company concerned needs to have a legal character.
Why is there a need to obtain Trade License?
- The main goal behind India 's acquisition of a trade license is to control and regulate the flourishing businesses on the market.
- The state government can in some way check and regulate the business activities by way of a trade license. The same is done to ensure that none of the business activities do any harm or injury to the citizens living in that area
- An online trade license helps keep an eye on all of the business activities.
- In addition, a trade license also serves as an assurance to both individuals and authorities that all the rules and regulations are being duly complied with.
What is the Validity Period of a Trade License?
The trade license issued to a corporate entity shall remain valid for one year. After that, timely renewal of the same license is necessary for carrying on business activities.
How to obtain Renewal of Trade License in India?
The license issued for trading is required to be renewed annually. The same is only possible after requesting renewal. The license renewal period is usually from 01 January to 31 March of each year.
The trade license renewal application shall be submitted within thirty days of the license's expiry date. Any delay caused by filing the application for the renewal of a trade license may result in the levying of late fees, which is 50 percent of the license fees prescribed.
What are the Points to be considered for obtaining Trade License?
- The Local Authority of the region in which the said company is licensed issues a trade license.
- A Trade License can be used only for the activities for which it is given exclusively.
- The rules, regulations, standard, time-limit, procedure, and charging structure for a trade license vary from one state to another.
- The company that has a commercial license would have a comparatively greater reputation, brand value, and competitive advantage than the company that has no commercial license.
- The Company that has such a license denotes that it carries out the legitimate business operations.