The trade license is an essential document required by the person who is willing to start his business. In the absence of it, you are unable to run your shop under a specific area. State government grants permission to carry on business or trade and issues the license to a person. The main purpose of issuing documents is to ensure that no person can perform business activities unethically. You have to pay a fine or penalty if you run the business without obtaining a trade license. Even the chances of enclosing your business are also possible in case operating a business without a trade license.
Documents required for obtaining trade license-
- Business address proof.
- Aadhaar card.
- Applicant ID proof.
- In the case of a company, a certificate of incorporation is essential.
- MOA (Memorandum of association) in case of company.
Trade license Zones support getting a trade license by easily arranging essential documents for a trade license.
Benefits of obtaining a trade license.
Increase credibility- all the businesses generating profit from operating business essentially need trade licensing for smooth functioning. It gives assurance to customers that, from the organization they are dealing with, they are performing ethical activities. Apart from that the visibility of business also increases in the market because of trade licenses.
Greater goodwill- the company having a trade license attracts more investors and customers than the company without a trade license. It helps to increase the goodwill of the from in the market and enjoy better position and revenue in the industry.
Financial aids- for growth and development of business, at some point it requires financial aid from outside. With the help of a trade license, the business owner can easily arrange financial aid from financial institutions and banks with constraints. A trade license is a gateway that assists in the seamless inflow of liquidity in the organization.
Unethical activities are discouraged- holding a trade license has to perform their business operation under ethical practices. Unethical activities such as generation of the faulty invoice, avoidance of tax, polluting air and water by disposing waste, and exploring workers are discouraged as doing so makes a business owner liable to pay a heavy penalty. Even may result in the enclosure of business.
Conclusion
The benefits of a trade license are several and one should obtain a trade license to perform business activities legally and transform their business into a legal entity in the market.
