What is trade license | How to Register in India?

In India, it is mandatory to register for a trade license to start a business. Trade license is obtained under the shops and establishment act. In this blog, we will help you to know more about the Trade license registration process and different aspects of the Trade license.

What is a Trade license?

Trade licenses are required to start any commercial activity in India. A trade license gives you the right to operate your business in a particular area. The trade license is a means to ensure that the manner and locality in which the business is being carried on is according to the relevant rules, standards and safety guidelines. Trade license is the way to regulate specific businesses from a particular locality. Trade license registration is regulated in India to ensure that the citizen is not adversely affected by Health Hazard & Nuisance by the improper carrying of a trade.

What is the importance of a trade license?

Usually, the trade license is governed by the state governments with the help of the municipal corporations of the locality. In some states, it is compulsory while it is optional in some states. Hence, for the trade license registration, the applicant first has to understand the jurisdiction under which the business is working.

The trade license registration in India should not be confused with some kind of licensing with strict laws and regulations.

Trade licensing refers to the registration of the business, it does not involve any tight scrutiny, hard rules and regulations to comply with. Trade license in India was introduced to get the business registered so that the Indian government has the proper database of all the registered businesses.

One of the main reasons you need a trade license is that it assures the activities carried out by your company are not going to present any kind of health hazard. Moreover, a proper database is required for proper taxation being implemented in the economy. Hence, we see apart from benefiting the consumers and sellers trade license registration also benefits the Indian national government in various ways.

Rules and Regulation under the Act

Trade license is registered under Shop and Establishment Act. The Acts regulates following rules and working conditions-

The Act specifies the permissible working hours per day and per week.

Along with fixed working hours, the act also specifies the rest intervals, opening and closing hours, holidays, overtime policies, closed days, spread over of work, etc.

The Act also specifies the regulations for the employment of young people and women.

It also specifies the rules and regulations for paid leaves like maternity leave, sick leave, etc.

It also regulates the conditions for employment and termination.

It states the requirement of maintaining registers and records and the necessity of displaying notices.

It also specifies the obligation and responsibility of employers and employees towards each other, to the firm and to society.

What are the different categories of Trade license?

Food establishment license: This trade license is required for opening a hotel, restaurants, canteens, food stalls, bakeries, or to sale of vegetables and meat, etc.

Industries license: This trade license is required for small and large scale manufacturing factories, cyber cafe, etc.

Shop license: The shop license is required to open a barbershop, dhobi shop, candle manufacturer, etc.

Who can apply for the trade license?

The business must be legally permissible under the law.

The person must not have any criminal records.

What are the documents required for trade license registration?

What is the fee for the trade license registration in India?

The fee for trade license is varied in different states. Some cities gather business licenses on annual or yearly fees and other cities receive depending upon on the business annual sale. Trade license registration and permission are given by the municipal corporation of the area.

What is the validity of Trade Licenses?

The issued trade licenses have a validity period of one year which has to be renewed on an annual basis. After the authorized period of a year, the application for the renewal of such a trade license is required. This is done with the aim that the business entities will be able to continue their businesses in compliance with the contemporary and applicable provisions of local laws.