• CRSPL

  • 21 Aug 2023

  • 41
  • 6 mins

Trade Licence: A Comprehensive Guide

Are you calculating all the necessary paperwork you will require as you prepare to launch a new business? One of the crucial documents to launch a business or commerce within a specific municipal boundary is a trade license. In this article, we are going to brief you on all the necessary things which you must know about the trade license. So just keep hooked till the end of this article to gain proper knowledge of trade license.

What is Trade License?

One of the crucial certifications or documents, the trade license, enables an organization or firm to engage in commercial activity within the bounds of the particular municipal area for which the trade license is issued. To oversee and control the different trade operations taking place within the city, the Municipal Corporation of Delhi, or MCD, issues Trade License Delhi to traders and establishments. In addition, the license does not give the holder any further legal authority over or protection over the premises on which the company is conducted.

Objectives of Trade License

To meet the needs of the business, the Municipal Corporation of Delhi grants Trade License Delhi. The following list outlines some of Delhi's requirements for the Trade License:

  • To impose commercial regulations on a certain municipality or area;
  • To keep an eye on corporate operations. In addition, local authorities may perform routine inspections of the operations of a business;
  • Companies with these licenses have a better reputation among customers. Customers' faith in their services would increase;
  • The use of environmentally friendly materials to carry out operations in a particular site is likewise governed by this license. Hazardous and other chemical substances are prohibited within municipal and residential boundaries;
  • A firm in Delhi would conform with the government if it issued a trade license;
  • Through this license, a local authority can inspect or investigate whether the business is breaking any laws or causing any trouble in the community;
  • Obtaining a license would prevent organizations from using their residential properties for business purposes. Consequently, this type of legislation guarantees that businesses are governed;
  • Businesses with a Delhi Trade License will take important safety precautions when performing a particular task. Businesses with this license will also adhere to any recommendations periodically published by the Municipal or Delhi Government.

Who Requires Trade License?

To operate, any kind of business would need a license. Therefore, obtaining a trade license for a certain firm is required. Trade Licenses are often issued by the state government. Any person with a trade license can run business activities without any kind of interference.

Why is a Trade License Required?

40 years ago, the government issued rules for doing specific enterprises.  As a result, a business can only use this type of license to engage in a certain activity. The government would only provide these licenses to people so they could carry out specific activities inside a specific locality. These licenses are given out by the state or municipal governments of the respective municipalities to allow enterprises to operate. For a specific person, obtaining a trade license is required. This license is a necessary and mandated document given out by a specific municipality. Businesses are allowed to conduct particular operations in a given location. These licenses are also given out so that customers may verify that the company is operating legally.

Types of Trade Licenses

There are generally three kinds of trade licenses depending on the type of trade or industry a business or an individual can apply for.

Food Establishment License

This license is required for any business that wants to operate in the food and beverage sector. The license is valid for use in cafes, eateries, butcher shops, bakeries, and vegetable stores.

Industrial License

Any business that wants to open a small or mid-sized industrial unit needs to get this type of license.

Shop License

Anyone who wants to open a shop must get this license. Often, the shop is of any type of retail.

Who issues a Trade License?

It is handed out by the municipal corporation's licensing division in a number of regions, including industries, engineering, health, etc. The license is approved by the Indian government in order to enforce regulations in all of the nation's cities. It authorizes the conduct of any business or trade where it is located through letters, documents, or certificates. According to the rules and regulations of the municipal governments at the local level, licenses are issued differently in each state.

Documents Required for a Trade License

When submitting an application for a Delhi trade license, The following listed certificates, details, records and documents must be provided: 

  • Address Proof and Identity Proof – Individual.
  • Affidavit
  • Canceled Cheque and Bank Statement.
  • Certificate of Incorporation, MOA and AOA of the company.
  • Legal Occupancy document proof of the establishment/unit or allotment letter of the government agency.
  • Documentary proof of establishment of trade.
  • Lease Deed of the Constitution.
  • Documentary proof regarding the non-existence of unauthorized construction.
  • NOC (No Objection Certificate) from the land-owning agency.

Documents and Papers Required for the Renewal of the Trade License

  • Address Proof and Identity Proof
  • Original License copy
  • Old G-8 receipt
  • Application for renewal of a license

Documents and Papers Required for the Issue of a Duplicate Trade License

  • First Information Report (FIR)
  • Indemnity Bond in the prescribed format.

Fees for Trade License
 

Category

Area of the Establishment

Fee/Charges

Category A

Conforming Area / Local Commercial Area

(i) Rs. 200/ P.A. up to 10 sq. Meter.

 

(ii) Rs.500/-P.A between 10 Sq. Meter to 20 Sq. Meter.

 

(iii) Rs. 50 per sq. Meter above 20 Sq. Meter.

Category B

Non-Conforming Area / Household


 

(i) Rs. 200/ P.A. up to 10 sq. Meter.

 

(ii) Rs. 500/-P.A between 10 Sq. Meter to 20 Sq. Meter.

 

(iii) Rs. 50 per sq. Meter above 20 Sq. Meter.

 

Validity Period For Trade License

The Trade License Certificate has validity for three years after it is issued. As a consequence of that, the trade license needs to be renewed every three years by paying the license price for that time.

Renewal of Trade License

By clicking on the "Renewal" link on the official portal, applicants can choose the Renew License link and submit an application for the renewal of their trade license. Your application for a trade license will be finished once the renewal payment has been submitted.

 

Conclusion

In the dynamic world of business, obtaining a trade license is not just a legal formality but a crucial step toward establishing your credibility and legitimacy. From navigating the intricate application process to understanding the various categories and requirements, we've covered a comprehensive guide to trade licenses. Remember, a trade license not only empowers you to conduct business legally but also opens doors to growth and opportunities.

Ready to take the next step in your business journey? Whether you're a seasoned entrepreneur or just starting out, CRSPL Business Consultancy is here to guide you through the trade license application process. Our experienced team will ensure that you navigate the complexities with ease, ensuring a smooth and successful journey. Contact us today to embark on a path of business success with the right trade license in hand. Your journey to legitimacy starts now!