Trade License
Trade license is mandatory for businesses operating in a commercial property. Easily apply for Trade License online using IndiaFilings.
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Trade License
Engaging in any business activity within India mandates adherence to various regulations, among which acquiring a Trade License is paramount. Serving as an official document to commence specific trade or business operations within a designated locale. Trade license ensures businesses follow municipal norms and uphold public health and safety standards. With India's robust regulatory landscape, obtaining a Trade License becomes an indispensable step for businesses aiming to carve a niche in the competitive market, reinforcing the foundation for a trustworthy and lawful business.
Getting a Trade License in India involves complex steps and rules. IndiaFilings makes this easier by guiding you through the process and helping you get your license smoothly.
What is a Trade License?
A trade license is an official document or certificate issued by the Municipal Corporation of a state granting permission to the applicant (individual seeking to establish a business) to engage in a specific trade or business activity within a designated area or location.
This license ensures that the business complies with all safety standards mandated by the State Municipal Corporation, safeguarding residents from potential health hazards. Obtaining a trade license is mandatory for all businesses falling under the purview of the respective state's State Municipal Corporation Act.
It's important to note that a trade license restricts the holder from engaging in any trade or business activity other than the one for which it was issued. Additionally, the license does not confer any property ownership to the holder.
Who Can Issue a Trade License?
As mentioned above, Trade licenses are typically issued by the licensing department of the Municipal Corporation, which encompasses various departments such as industries, engineering, and health. These departments grant permission through a formal document or certificate, allowing businesses to operate within their jurisdiction. The issuance process may vary from state to state, depending on the rules and regulations of local government agencies, specifically the Municipal Corporation.
The Importance of a Trade License
In India, trade licenses were established four decades ago under the regulations of the respective state governments' Municipal Corporation Acts. These licenses are crucial in safeguarding against various trades or businesses' nuisances and health hazards.
State governments require trade licenses for conducting specific businesses or trades within designated areas to prevent unethical business practices. The government can regulate various commercial activities nationwide by mandating trade licenses. This regulatory framework promotes societal harmony by ensuring every business adheres to relevant rules, guidelines, and safety measures.
Main Objectives of a Trade License
The primary aim of a Trade License is to ensure that business activities within a specific area are regulated and controlled. This licensing system helps local authorities maintain public safety, health, and welfare by overseeing and managing the urban business landscape. By mandating a Trade License, the government ensures that businesses do not negatively impact the surrounding environment and community.
Advantages of Trade License
The advantages of obtaining a Trade License are listed as follows
Businesses Requiring Trade License Registration
Types of Trade Licenses Issued by the Municipality:
Gumasta License
In Maharashtra, a trade license is known as a Gumasta License. In other parts of the country, Trade Licenses are known by different names.
Eligibility to Apply for a Trade License
The eligibility criteria to Apply for a Trade License are listed as follows:
Documents Required for Trade License
The following documents are required to apply for Trade License :
Procedure for Applying Trade License
Trade license applications can be submitted either online or offline. They must be filed with the city municipal corporation governing the area where the business is situated. The timeline for application submission differs depending on the State Municipal Corporation Act, with some states requiring the application before business commencement, while others allow it within 30 days of initiating operations.
Step 1: Fill Out the Application Form
Obtain the application form for a trade license from the local municipal authority's office or website.
Fill in the form accurately, providing all requested information regarding your business and personal details.
Step 2: Submit the Application
Depending on the municipality's system, submit the completed application form along with all the required documents to the municipal authority, either in person or online.
Pay the application fee, which varies depending on the type of business, size, and location.
Step 3: Municipal Inspection
Sometimes, a municipal inspector may visit your business location to verify the details provided in your application and ensure compliance with local health, safety, and environmental standards.
Step 4: Obtain the License
Once your application is approved, you will receive your trade license. The time frame for approval can vary but generally takes a few weeks.
Depending on the municipal authority's process, you can collect the trade license in person or receive it by mail or online.
Step 5: Renewal
Remember that a trade license is typically valid for one year and must be renewed annually. Keep track of the renewal date and submit a renewal application and the required fee before the license expires to avoid penalties.
Penalties for Non-Compliance
Operating a business without a valid trade license or not adhering to the conditions of the license can lead to fines, penalties, and even the closure of the business.
A trade license is crucial for operating a business legally and smoothly in India. It ensures compliance with local laws and builds trust among customers and other stakeholders.
Obtain Your Trade License Easily with IndiaFilings
IndiaFilings offers comprehensive assistance in obtaining a trade license, simplifying the complex process for businesses. Our team of experts guides clients through every step, from application submission to obtaining the license. With extensive knowledge of the regulatory requirements and procedures, we ensure that all necessary documents are accurately prepared and filed with the relevant authorities.
By choosing IndiaFilings, businesses can save time and effort, ensure compliance with legal requirements, and expedite the process of obtaining a trade license.
Check Business Name Availability
Find if business name can be registered with MCA in India
To register a company in India, the first step is to obtain name approval for the business from the Ministry of Corporate Affairs (MCA). This process takes about 24-48 hours. A private limited company name in India must end with the words private limited. One Person Company ends with (OPC) private limited. LLP end with LLP and Section 8 companies can end with words like foundation, association or institution.
A company name proposed to be registered cannot be identical or similar to an existing company name. Also, every company name must include a word that denotes the activity undertaken. For example, in VERVE Financial Services Private Limited - Financial Services denote the activity undertaken. Check Business Name Availability.
Online Trademark Search
Enter a brand name to search across all trademark classes
All trademarks are registered in India with the Office of the Controller General of Patents, Designs and Trade Marks. A trademark application has to be filed under a class that denotes the type of goods or services the brand or logo represents. There are 45 trademark classes and each class represent a distinct type of goods or service.
Trademark search can be conducted using the tool above to check if any identical or similar brand or logo is registered or applied for under the same class. If there is an existing application, care must be taken while reapplying to ensure that the application is not rejected by the Trademark Registrar. Trademark Search.
Documents Required For Trade License
Trade License FAQ's
Proprietorship vs Limited Liability Partnership (LLP) vs Company
Features | Proprietorship | Partnership | LLP | Company |
Definition | Unregistered type of business entity managed by one single person | A formal agreement between two or more parties to manage and operate a business | A Limited Liability Partnership is a hybrid combination having features similar to a partnership firm and liabilities similar to a company. | Registered type of entity with limited liability to the owners and shareholders |
Ownership |
Sole Ownership
|
Min 2 Partners
Max 50 Partners
|
Min 2 Shareholders
Max 15 Directors
Max 200 Shareholders
1 Director
1 Nominee Director
|
|
Registration Time | 7-9 working days | |||
Promoter Liability | Unlimited Liability | Limited Liability | ||
Documentation |
LLP Deed
Incorporation Certificate
|
|||
Governance | - | Under Partnership Act | LLP Act, 2008 | Under Companies Act,2013 |
Transferability | Non Transferable | Transferable if registered under ROF | Transferable | |
Compliance Requirements |
Income tax filing if turnover is more than Rs.2.5 lakhs
|
Zero Late Fee Platform
Many small businesses pay lakhs in penalty every year to the Government for late filing various statutory returns. Such penalty or late fee paid is not tax deductible and is a drain on profitability. At IndiaFilings, our mission is to provide the most affordable services to our customers and help them avoid all late fee.To achieve our mission - we have built enterprise grade technology to help you proactively know the upcoming compliance and avoid penalty.Checkout our compliance services below, talk to an Advisor and stop paying unwanted late fees.
Related Business Registrations
In addition to registration or incorporation, a business may require other registrations depending on the business activity undertaken. Talk to an Advisor to find out registrations your business may require post registration.
MCA Compliance
Every registered entity must fulfill its compliance obligations at the end of each financial year. These typically encompass tasks such as auditing financial records, filing income tax returns, and submitting annual forms to the MCA.
Form | Company Compliance | Due date | Penalty |
COB Filing | Commence of Business Certificate | To be filed before 180 days of company Incorporation | Rs.50,000 for non-compliance |
DIR 3 EKYC | Any director with DIN | On or Before 30th September every year | Deactivation of the DIN A late filing fee of Rs.5,000 Disqualification of the Directors |
Form ADT 1 | Appointment of auditor | Within 15 days from the date of appointment of the Auditor | Late fees will be applicable, with fees ranging from 2 to 12 times the nominal fee, depending on the number of days of delay. |
Form AOC 4 | Filing financial statements of the company | 30 days from the conclusion of the AGM | Late fees will be applicable, with fees ranging from 2 to 12 times the nominal fee, depending on the number of days of delay. |
Form MGT 7 | Annual Returns of the Company | 60 days from the conclusion of the AGM |
In addition to the above filings, depending on the type of entity and business activity more compliance filing maybe applicable. Please check with an IndiaFilings Advisor to help you with the compliance for your company.
All Limited Liability Partnerships (LLP) registered in India are required to file statutory returns with the Ministry of Corporate Affairs (MCA) each year. IndiaFilings can help you maintain your LLP Compliance at a very affordable price.
Form | LLP Compliance | Due date | Penalty |
DIR 3 KYC | For every designated partners of a limited liability partnership (LLP) with DIN | Before 30th September every year | Deactivation of the DIN A late filing fee of Rs.5,000 Disqualification of the Partners |
Form 11 | Annual Returns | May 30th every year | Late fees will be applicable, ranging from 1 to 15 times the nominal fee for Small LLPs and 1 to 30 times the nominal fee for other than Small LLPs, depending on the number of days of delay. |
Form 8 | Statements of Accounts and Solvency | 30th October every year |
Apart from the aforementioned filings, there might be additional compliance filings that could be relevant for LLPs. Please consult with an IndiaFilings Advisor to assist you with the compliance needs of your LLP.
Entity | Form | Due date |
Private Limited Company | Annual Return (Form MGT-7) | 60 days from the conclusion of the AGM or 28th November 2024 (Which Ever is Earlier) |
Financial Statements (Form AOC-4) | 29th October 2024 | |
DIR-3 KYC | 30th September 2024 | |
Form DPT-3 | 30th June 2024 | |
Form ADT-1 | Within 15 days from the date of appointment of the Auditor | |
ITR 6 (Non audit case) | 31st July 2024 | |
ITR 6 (Audit Cases) | 31st October 2024 | |
GSTR 9 | 31st Dec 2024 | |
Limited Liability Partnership | ITR 5 (Non audit case) | 31st July 2024 |
ITR Form 5 (Audit case) | 30th September 2024 | |
Annual return - Form 11 | 30 May 2024 | |
Financial Statements - Form 8 | 30 October 2024 |
Note : Get in touch with our experts to efficiently handle your compliance filings, whether you are an LLP, a company, partnership firm or a proprietorship. Contact us to ensure your compliance is filed before the due date.
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