Uttar Pradesh Trade License

Trade license is a certificate/ document that permits an entity to carry on the business or trade activities in a particular municipal limit for
which it is issued. The provision of a trade license is laid down by the State government to monitor and regulate various trade activities
within a city. In Uttar Pradesh, trade license is issued by the respective Municipal Corporations of Uttar Pradesh to traders and
establishments, to monitor and regulate various trade activities at the city level. In this article, we look at the purpose, procedure, and
the documents required for obtaining Uttar Pradesh trade license.

Uttar Pradesh Shops and Commercial Establishments Act, 1962

The regulations under this act apply to a shop or a commercial establishment located within the limits of municipal areas in the state
of Uttar Pradesh. This Act has been enacted to consolidate and amend the law regulating the conditions of service of employees
working in shops and in commercial establishments. Every employer is required to make application for Registration or Renewal of his
Shop or Commercial Establishment within 30 days of commencement of business. This Act is one of the mandatory requirements of all
businesses which operate from an establishment or shop. If any changes made in the closure of establishment, then it needs to be
initiated to the concerned authority within 15 days.

1. What is a Trade License?

A trade license is a document/certificate that gives the permission to the applicant (person seeking to open a business) to commence a
particular trade or business in a particular area/location. However, the license does not allow the holder to any other trade or business
than for it is issued. Furthermore, this license does not pass on any kind of property ownership to the holder of the license.

2. Why Trade License?

In the last forty years, trade license has been introduced in the country and is being regulated through municipal corporation acts by the
state governments. This helps in ensuring that no one is severally affected by nuisance and health hazard of any trade or business.
It has been made necessary by the government to carry out any particular business or trade in a particular area and to ensure that no
one is carrying out any unethical business practices. This license creates a harmony in the society that every business is following
relevant rules, guidelines and obeying the safety measures. This license was made obligatory to make sure that the government can
regulate various trade activities in the country. The core objective of issuing a this is to control the locations by restricting the people
from executing certain types of businesses from their home location to maintain the business environment and locality environment.

3. Who can issue a Trade license?

It is issued by the licensing department of the municipal corporation in various departments like industries, engineering, health etc.
The government of India authorizes the license in a manner to regulate in cities across the country. It grants permission by the way of
letters or documents/certificates to carry on any business or trade where it is located. The issuance of the license varies from state to
state depending on the local government agencies (Municipals) rule and regulations.

4. Different categories of trade license?

a. Industries license: small, medium and large scale manufacturing factories
b. Shop license: Dangerous and Offensive trades like a sale of firewood, cracker manufacturer, candle manufacturer, barber shop,
dhobi shop etc.
c. Food establishment license: Restaurants, hotels, food stall, canteen, the sale of meat & vegetables, bakeries etc.

5. Eligibility for a Trade license

a. The applicant must have crossed the age of 18 years
b. The applicant must not have any criminal records
c. Business must be legally permissible.

6. Documents need to be submitted for Trade License-

In order to apply for a trade license, the applicant is required to make an application and submit the same to the concerned Municipal
Corporation along with all the necessary documents.
There are different documents that required to be provided depending on the type of business intended to carry on.
a. Application in the prescribed Form
b. If the applicant is any Firm, LLP or a Company, their PAN Card, along with the incorporation certificate.
c. In the case of an individual applicant, his/her Aadhaar Card is mandatory.
d. Latest Municipality Property Tax Payment Receipt.
e. Lease documents or consent letter from the owner of the property.
f. NOC from your immediate neighbor
g. A certified layout plan of your trade building showing the business, working or washing or resting areas
h. Katha extracts
i. Katha certificate
j.Sanction plan
k. Occupancy certificate (OC)

7. Processing Time
In general, it takes 7-10 days time to process the application of Trade license in metro cities. However, in other small cities and rural
areas, it takes longer.

8. Trade license Renewal

Statically, trade licenses in India are renewed in between January 1st to March 31st. The validity of a license issued by the municipal
authority is for a period of one year and required to be renewed every year.
The application for renewal of the license is to be made within thirty days from the date of its expiry. In case the renewal process is
delayed, then it may attract fine depending upon the rules and regulation of the issuing authority.
Following are the documents that need to be submitted for renewal of the license–
a. Original copy of the trade License;
b. Previous year challans;
c. Up to date property tax paid receipt.

9. Penal provisions
There are various other provisions, rules, and regulations that are required to be followed by the registered person. In case of failure to
comply with the registration requirements of trade license and commencing any trade activity before the issuance of this license, the
person in the default will be liable to pay prescribed penalty. Furthermore, legal action can also be taken against the defaulter.

10. Important points to be noted

a. The Trade license issued by the municipal authority is exclusively for the Trade or business.
b. Rules and regulations in relation to the issuance of a trade license varies from state to state
c. The fee structure for the issuance of the license differs based on the nature of the business
d. A business granted with this license will enjoy a greater goodwill than an unregistered entity and subsequently attracts more
customers and investors.
e. This also ensures ethical business practice is performed by the traders as they have to follow safety measures and guidelines.
f. If a person doesn’t apply for the license or before the grant of the license as required under law and commences any trade or
business activity than the relevant government (authority) can impose fines and penalty as per their rules and regulation. The failure to
comply with pre-requisites of the trade license can also result in the closure of a business.
UNIFIED OR SINGLE TYPE – (most prominent one)

Unified market platform- It is the platform through which the agriculture commodities brought for
sale by farmers in any market of state could be bought by any licensed trader through ONLINE.

licensed trader- A licensed trader is one, who has obtained license from the Director of Agricultural
Marketing or by the person authorized by him, as per the law.

Unified market license- The trader who has obtained license as mentioned above is permitted to
purchase the notified commodities in all the notified markets of the state with a single license. This is
called unified license.

Pros Of Unified license -

 A trader can purchase from different markets, different commodities through online at a time.
 Savings in time and effort of visiting different markets will not be necessary.
 Authorized institution gives the guarantee about the quality of the commodities to the traders.

Cons Of Unified license-

 Liberal licensing of traders / buyers and commission agents by State authorities

 There are no pre-conditions asking for physical presence or possession of shop /premises
in the market yard.
 One license for a trader will be valid across all the markets in that State.

Challenges Of Unified license-

 Most of the farmers have the habit of selling their yield to a local produce aggregator than
taking their crops to the mandis.

 Even if some farmers take them to mandis, their yield would be very small to excite distant
buyers bidding online
 requirement for multiple license for trading in different APMCs,
 poor infrastructure and low use of technology.

Field Research-
 Location- Moongfali Mandi, Dussherabagh,Barabanki.

 Observation- It is a mentha oil selling hub. There are numerous mediators present overhere.
Out of this only one buyer is running licensed business. Gupta traders happens to be the
largest licensed buyer of mentha oil in this mandi.