Trade License Registration
The authorised state government entity (usually a local municipality) issues the trade license to businesses carrying out trading activities. A trade license is one such essential document required for running a business or trade. It permits an individual or entity to carry on business or trade in a particular municipal limit.
What is Trade License?
The authorised state government entity (usually a local municipality) issues the trade license to businesses carrying out trading activities. It is a legal certificate granting permission to carry on the specific trade or business for which it is issued at the respective premises. It allows the applicant to operate a business within a certain place or area of the respective state.
The trade license certifies that the business does not use unethical practices that may endanger residents of the territory or locality. This license does not allow the applicant to operate any other business than the one for which it is issued. The businesses that must obtain the license should abide by the authority’s rules and regulations. The application for obtaining the trade license must be made before or within 30 days of the commencement of business, as per the respective State’s Municipal Corporation Act or Rules.
Eligibility for Trade License
- The applicant should be more than 18 years old.
- The applicant should not have any criminal records.
- The business should be legally permissible.
Trade License Issuing Authority
The municipal corporation of the respective state issues the trade license. Only government and municipal bodies regulate the issuance of this license. Thus, the applicant must apply for a trade license with the respective state government authority, depending on where he/she intends to start the business.
For example, when an individual wants to start a restaurant business in Bangalore, he needs to file an application for a trade license with the Bruhat Bangalore Mahanagara Palike (BBMP). It can also be applied online on the BBMP website.
Types of Trade Licenses
Three different types of trade license is issued by the municipality
Type A- This type is required for all food service establishments
Type B- Units in manufacturing and processing where machines and electricity are used, such as milling units are provided with this type.
Type C- This type is provided for High-risk activities including the manufacture of fireworks, wood and timber structures.
