Trade License Online Registration

A trade license regulates trading businesses and ensures their compliance with the rules and safety guidelines issued by the government. It safeguards society against the health hazard and nuisance that a trader or business may cause. The trade license can be obtained online by filling out the online trade registration application or offline from the respective government authority.

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.

Businesses that Require Trade Licenses

All traders involved in a general trading activity or business within the territorial boundaries of a municipal corporation are mandatorily required to get a trade license. The type of trade license to be obtained varies depending on the business’s nature. 

Usually, all manufacturers and factories, including small, medium and large industries, firewood, cracker, candle manufacturers, etc., should have a trade license. All shops, such as barber shops, laundry shops, medical shops, restaurants and hotels, food stalls, canteens, bakeries, etc., must also have a trade license.

Eligibility for Trade License

• The applicant (business owner) must be a major, i.e. above 18 years.
• The applicant should not have criminal records or convictions.
• The business must not be unlawful or operate against provisions of the law in force.

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

There are three types of trade licenses issued by the municipal authority:

• Industries license: Small, medium and large scale manufacturing factories.
• Shop license: Dangerous and offensive trades (like a sale of firewood, cracker manufacturer, candle manufacturer), barber shop , laundry (dhobi) shop, computer shops, clinics, hospitals, medical stores, small businesses, etc.
• Food establishment license: Restaurants, hotels, food stall, canteen, the sale of meat & vegetables, bakeries, shopping malls, movie theatres, etc.

Online Trade License Registration Process

Below are the steps to apply for an online trade license:

Step 1: Visit the respective city municipal corporation website. For example, in Karnataka, the applicant must log in to this website.

Step 2: Click on the ‘Citizen online services’ option.

Step 3: Click on the ‘Apply for Trade License’ option. 

Step 4: Fill out the registration form by providing the required details, such as personal details, address and business details.

Step 5: Upload the required documents and click on the ‘Submit’ button.

Step 6: The local body officials will verify the application and documents.

Step 7: After verification, a unique application number is generated.

Step 8: Pay the fee, and the license number will be issued.

The trade license is valid up to 31st March every year. The applicant must renew the license before its expiry by filing an affidavit stating that the business owner is still running the trade/business and intends to continue it. The procedure for renewal of the trade license is the same as the application process for the trade license. It can be renewed online through the municipal corporation website or by filing an application offline to the respective office of the municipal authority.

Documents Required for Trade License Online Registration

• Identity and address proof of the business owner.
• Pan card of the establishment (in case of LLP or company).
• Certificate of a business establishment or certificate of incorporation.
• MOA and AOA (in case of a company) or LLP/partnership agreement (in case of LLP or partnership firm).
• Proof of business premises, such as property tax receipt or rental agreement and NOC from the building owner.
• NOC from the pollution control board and fire department, if applicable.
• Certified layout plan of the office.

Benefits of a Trade License

A trade license proves that a business is legally established and is considered a legal entity. It ensures to the proposed or interested customers that the business follows the local authority’s laws and regulations, making it safe to be associated with the business. It permits the business to function effectively within a commercial space without the fear of being forced to close by external entities. It helps to safeguard the business owner’s dignity and competence.

Disclaimer: The materials provided herein are solely for information purposes. No attorney-client relationship is created when you access or use the site or the materials. The information presented on this site does not constitute legal or professional advice. It should not be relied upon for such purposes or used as a substitute for legal advice from an attorney licensed in your state.