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You must adhere to several kinds of legal criteria when establishing a business. Notifying the government that you are starting a business at this specific area is one of the main criteria. Business operations may be impacted if you don't notify the government and local authorities. IN addition, you will have to close the business. As a result, Trade License is used to notify the government about business. Every village or city government demands the registration of a trade license.
You need a current trade license in Delhi if you already operate a business there or wish to do so.
The Municipal Corporation of Delhi is able to monitor and control business operations at the local level thanks to the Trade License.

What is a Trade License?

A trade license is an official certificate or legal authorization that grants you permission to engage in business or
trade activities within the defined jurisdiction of the municipality where the license has been granted.
A trade license is like a special approval from the government that says you can start your business in a specific locality or region.
It also makes sure your business follows safety rules made by the municipal corporation.
When you get a trade license, it's only for one specific type of business.
You can't start any other business using that license, just the one it was given for.
It also guarantees that an individual cannot acquire ownership or establish a legal claim to the property or
any other form of entitlement where business activities are conducted.

Importance of Trade License in Delhi

  • Protects the Residents:Delhi's Trade License regulations prevent persons from conducting business in residential areas.
    Therefore, a trade license shields residents from the annoyances and disturbances brought on by commercial activities.
  • Boosts the Credibility of the Business: In Delhi, it is a well-known fact that every company needs a trade license.
    Trade licenses allow customers to be certain that a company is committed to operating legally and ethically.
    Additionally, the company becomes more well-known in the market where it competes thanks to this license.
    As a result, doing so would help the company to progressively gain the trust of its target customer.
  • Get Investment Easily:Investors only support companies that adhere to the law.
    Additionally, if your startup is young, developing accountability and trust can be difficult.
    Here, licenses like trade licenses in Delhi are helpful for you to establish legitimacy.
  • Reduce legal disputes:The company would never be subject to legal penalties while having a trade license in Delhi unless they deliberately break the rules of Trade License.
    It is understandable that companies that guarantee complete compliance with regulations are less likely to encounter legal troubles. They might grow more easily than unregistered businesses.
  • Sustainability in the Long Run:Many entrepreneurs still want to ignore regulations in order to boost their revenues.
    Remember that while this can give these entrepreneurs some short-term advantages, they might find it difficult to succeed in the years to come. Businesses who have a trade license, however, have a higher chance of focusing on their core competencies and gaining the trust of their target clients. In the long run, this will help them survive.

Essential Things to know while applying for Trade License in Delhi

  • In Delhi, you need to get a trade license within 30 days of starting your business.
  • A month before the trade license is set to expire, the applicant must also submit an application for its renewal.
  • You will have to resubmit the necessary documents when your Delhi trade license needs to be renewed.
  • If you decide not to apply for a trade license, you could end up paying fines, going to jail, or having your business shut down.
  • To get a trade license in Delhi, businesses need to follow the rules outlined in the Delhi Shops and Establishment Act of 1954.

Eligibility Criteria for Trade License in Delhi

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01

The applicant must be at least eighteen years old.

step
02

The applicant should not have any prior convictions and their business activities should be legal.

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03

A trade license is required in Delhi for any commercial establishment, including cafes, hotels, restaurants, boarding houses, offices, theaters, and cinemas. It is also required for any other public amusement or entertainment facility.

Types of Trade License

  • Industry License:manufacturing-related micro, small, medium, and big businesses.
  • Shop License:Certain trades in Delhi, which pose inherent risks, such as firewood sales, cracker and candle production, barbershop or laundry (dhobi) services,
    or even regular retail stores, are required to obtain a specific type of trade license.
  • Food Establishment License: Trade licenses are required for restaurants, hotels, food carts, cafeterias, stores that offer meat and vegetables, bakeries,
    and similar establishments.

Document Requirement for applying trade license in Delhi

  • Address proof and identity proof of the individual
  •  Certificate of the incorporation, AOA and MOA in case of Private Limited Company.
  • Affidavit
  • Canceled cheque and the bank statement.
  •  Legal occupancy document proof of the establishment or allotment letter of the government agency.
  • Document proof for the establishment of trade.
  • Lease deed of the constitution.
  •  Documentary proof for non- existence of unauthorized construction.
  • No objection certificate from the land-owning agency.

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