Why Trade License?: To safeguard the society at large against the nuisance and health hazard which a trader/business may cause. Trade license is a way to regulate the trade and to ensure compliance with rule and safety guidelines issued by the government.

Who Need Trade License?: Every trader involved in a general trading activity within the territorial boundaries of any municipal corporation is required to get a trade license. The class of trade license varies based on the nature of the business.

Licensing Authority For Trade License: The Department of a municipal corporation in consultation with other departments like health, fire brigade or engineering will issue trade license.

Commercial Premises: Trade License can only be obtained if the business conducted in the approved area. i.e. a commercial, Local commercial, Notified Commercial, Residential area of Mixed Land Use with small shops on the ground floor.

Shop and Establishments Act

Shop and Establishment Act lays down the following stipulations based on which Karnataka trade license is issued:

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

Businesses Requiring Trade License

Any trading activity mentioned in Schedule X of the Karnataka Municipal Corporation Act, 1976 cannot be initiated unless a trade license is obtained under Section 353 of the Act. The application for seeking the license must be made at least 30 days before the date of initiation of trade to the municipal corporation of the respective jurisdiction.

It may be noted that trade license is not the same as the Shops and Establishment registration. While registration under the Shops and Establishment act will process within 30 days of the commencement of business, trade license must be under the trader’s disposal before starting the business. The objective of the Shops and Establishment Act is to control the working conditions of employment. In contrast, the purpose of a trade license is to ensure the general health and safety of the public. The following are some of the types of trade requiring a trade license:

• All the eating establishments such as hotels, restaurants, food stall, canteen, bakeries, sellers of vegetables, provisions store, meat, etc.
• Trades which use motives like manufacturing industries, power looms, factories, flour mills, cyber café, etc.
• Offensive and dangerous trades like a sale of firewood, dhobi shop, barbershop, timber wood, candle manufacturer, cracker manufacturer, etc.

Documents Required

To obtain a Karnataka trade license, produce the following documents along with the application:

• The Identity and address proof of the owner of the business.
• Passport size photograph of the applicant
• Documents portraying details of the approval of the plant and building permit.
• Documents related to the building, which could be a property tax receipt (for an own building) or rental agreement (for a rented building).
• The proof of the premises with a NOC (No Objection Certificate) from the owner of the premises.
• Details of power, premises or machinery plant.
• NOC (No Objection Certificate) from the Pollution Control Board.
• NOC (No Objection Certificate) from the Fire and Revenue Services Department.
• The Katha Extract which is an account of assessment every year of the property tax assessment with the details of the property such as its size, location, built-up area, etc.