Trade-License -Tamil-Nadu

Trade License Tamil Nadu

Trade License – Tamil Nadu

Trade license is a government endorsement authorising a person or a party to commence a business. The document is mandated by law to ensure that the business is in concurrence with the stipulated rules and ethical codes.  A business pursued without a trade license document could endanger the validity of the business, and might as well incur hefty penalties. In this article, we look at the procedure for obtaining Trade license in Tamil Nadu.

Shop and Establishments Act

Trade license in Tamil Nadu is also as the Shop and Establishments Act license. The Act lays down stipulations based on the following criteria to businesses initiating their endeavours:

  • The permissible working hours on a daily and weekly basis, which includes rest intervals; opening and closing hours; holidays; overtime policies; closed days; allocation of work, and the likes of it.
  • Regulation of employment norms for people of all gender and age.
  • Rules and regulations about paid leaves.
  • Conditions for employment and termination.
  • Regulations about the maintenance of registers and records.
  • Regulations about the display of notices.
  • The accountability of the employer and employee towards each other, the firm and the society.

Businesses Requiring Trade License

The following kinds of business are only eligible to obtain a trade license:

  • Eating joints such as hotels, restaurants, canteen, food stall, bakeries, or outlets selling vegetables; meat; provisions, etc.
  • Traders using motives such as manufacturing industries, factories, flour mills, cyber cafes, and the likes of it.
  • Hazardous trades like a saloon, dhobi shop, timber wood, or a shop engaged in the sale of firewood, candles, crackers, etc.

Documents Required

The applicant has to proceed with the following documents along with the trade license application form:

  • Proof of identity.
  • Proof of address.
  • Documents connected with the building, which could be a property tax receipt (for an own building) or rental agreement (for a rented building).
  • Affidavit declaring the nature and location of trade in a non-judicial paper attested by a Notary Public. The non-judicial stamp paper will cost Rs. 20.
  • Passport size photograph of the applicant.
  • NOC (No Objection Certificate) from the District Fire Officer.
  • NOC (No Objection Certificate) from the Pollution Control Board.
  • Certificate from the Inspector of Factories if more than nine workers in the employment.
  • Installation license (explained further).

Installation License

The TPO issues an installation license if any machinery is involved in the trade. The applicant is obligated to submit this document for machinery above 5 HP, together with the machine specifications and installation diagram and forward the same to the council for approval. It may be noted that types of machinery above 5 HP are only allowed in the commercial zone and not in the residential zone.

Documents Required Under Special Circumstances

Apart from the above documents enclose the following documents to avail the grant for the construction, establishment or installation of the factory, workshop or workplace:

  • Document depicting the approval of the plant and building permit.
  • Details about power, machinery plant or premises.
  • Document substantiating the approval of the Inspector of Factories (if applicable).
  • Document comprising of the opinion of the Deputy Director of Public Health in Urban Local Bodies (in the absence of the Municipal Health Officer).
  • NOC (No Objection Certificate) from the Fire and Revenue Services Department.
  • Consent of the TNPCB to establish the industry/workplace/workshop.

Registration Procedure in Urban Locales

The process of availing, maintaining or cancelling the trade license varies from state to state and even from a panchayat or town to that of a city. We have elucidated the procedures about both the scenarios.

Applicants of Trade License can use any place within Municipality/Corporation limit for any of the purposes specified in schedule 5 of the Tamil Nadu Districts Municipalities Act, 1920/Schedule-4 of the Madurai City Municipal Act, 1971/Schedule 4 of the Coimbatore City Municipal Corporation Act, 1981. Let us now examine the procedure to apply for a trade license in the urban locales of Tamil Nadu:

Step 1:- Website

The applicant must visit the official website of the Tamil Nadu Government to obtain Form-1 by remitting a fee of Rs. 5.

Step 2:- Specification of Details

The details to be specified include the purpose of utilization of the particular property, the name of the applicant, the name of the father/husband of the applicant, the age of the applicant, mobile/telephone number, residential address, trade license address, name of the owner of the building, property tax ASST. Number, trade license number and date for the previous year, the timeline of license requirement, square feet for the trade or area of business, monthly rentals payable for the building, the receipt number of the license amount and date, and the details of any other licenses issued previously. The application must attest his/her signature in the application.

Step 3:- Submission

Then submit the application to the Commissioner within the stipulated timeline.

Step 4: Scrutinization  

The Commissioner will then scrutinize the submitted application in terms of suitability of the place and the likelihood of any hazards. On the satisfaction of the conditions of the process, the Commissioner will demand the license fee from the applicant.

This concludes the procedure of trade license application. Upon the fulfilment of all conditions, the applicant can collect the trade license within a week.

Renewal Norms

The applicant should apply for the renewal of the license, upon the expiry of the terms of the license, before the 1st of March in Municipalities, and 45 days before the commencement of the financial year in corporations.

Process of Registration in Panchayat

The process of registering for trade license in a Panchayat differs from that of a municipality or a corporation. The procedure of registration for the former is below:

Step 1:- Online application

The applicant must fill the application provided in the E-town panchayat website and attach the required documents.

Step 2:- Sanitary Inspector

The filled-up application will reach the sanitary inspector of the town panchayat, who will schedule the date of conducting an inspection. An intimation of the same will be sent to the applicant through SMS and email.

Step 3:- Inspection and Reporting

The inspector inspects the premise and the machinery installed in it and prepares an inspection report by specifying the details on the online portal.

Step 4:- Fees

The fee details, which are determined by the council/executive officer, are specified by the inspector in the portal.

Step 5:- Forward to Sanitary Officer

The Sanitary Inspector (SI) forwards the file and inspection report to the concerned Sanitary Officer.

Step 6: Scrutinization

The Sanitary Officer (SO) verifies the file and inspection report. He/she may choose to conduct another inspection if the need is felt for the same.  In case of any irregularities in the file will revert to the concerned officer.

Step 7:-Forward to the Executive Officer

As a part of a repetitive cycle of events, the SO forwards the file to the executive officer, who will, in turn, verify the file and endorse it.

Step 8:- Demand Notice

Post-approval of the application, a demand notice (related to the fee) is issued to the applicant.

Step 9:- Issue of License

The license is issued to the applicant after he/she makes the payment as stated in the demand notice.

Rectifications to the Document

If the concerned parties discover any discrepancies in the application, the same must be addressed to the concerned official within 15 days of receiving it. The amended certificate will then be issued in due course of time.

Winding-up Norms

The person should report the closure of any business to the concerned officer within fifteen days of the date of closure. He/she will in-turn record it in the ‘Register of Establishments.’

Post by Sreeram Viswanath

IndiaFilings is India's largest online compliance services platform dedicated to helping people start and grow their business, at an affordable cost. We were started in 2014 with the mission of making it easier for Entrepreneurs to start their business. We have since helped start and operate tens of thousands of businesses by offering a range of business services. Our aim is to help the entrepreneur on the legal and regulatory requirements, and be a partner throughout the business lifecycle, offering support at every stage to ensure the business remains compliant and continually growing.