A trade license is a document/certificate that requires the applicant (person wanting to start a shop) to begin a certain trade or business in a specific area/location. The certificate, however, would not authorize the holder to engage in any other trade or business except the one for which it was given. Furthermore, the holder of this license does not acquire any form of land possession.
The government has made it mandatory to carry out any particular industry or trade in a certain region and to ensure that no one is engaging in illegal business practices. This license encourages social peace by ensuring that all companies obey applicable laws, protocols, and safety precautions. This license was made mandatory in order for the government to be able to control different trade practices in the region. The primary goal of issuing this is to regulate the locations by excluding individuals from conducting such types of businesses from their home area in order to preserve the market climate and locality environment.
Trade licenses in India are usually renewed between January 1st and March 31st. A local authority-issued license is valid for one year and must be renewed next year. The application for license renewal must be submitted within thirty days of the license's expiration date. If the renewal process is postponed, a fine can be imposed, depending on the laws and regulations of the issuing body. The following are the forms that must be sent for license renewal– a. An original copy of the trade license; b. Previous year challans; and c. A receipt for the most recent property tax payment.