A trade license is a certificate/ document that permits a company to carry on the business or trade activities within a particular municipal limit for which it is issued. In Delhi, Trade License is issued by the Municipal Corporation of Delhi (MCD) to traders and establishments to monitor and regulate the various trade activities at the city level. In this article, we look at the purpose, procedure, and documents required for obtaining a Delhi trade license.
Delhi Shops & Establishment Act, 1954
Regulations under the Shop and Establishment Act lays down the following rules based on which the Delhi trade license is issued. Every establishment/shop must compulsorily be registered under this Act within 30 days of commencement of work. Shops and Establishments Act regulates the following aspects of doing business in India:
- The working hours on a daily and weekly basis.
- Provisions for spread-over, rest interval, opening, and closing hours closed days, national and religious holidays, and overtime work.
- Regulation of employment norms for children, young persons, and women.
- Rules and regulations concerning paid leaves.
- Rules and conditions for employment and termination of service.
- Regulations concerning the maintenance of records and registers.
- Obligations of employers as well as employees.
- Precautions against fire, accidents, etc.
- Regulations concerning the display of notices.
- The responsibility of the employer and employee towards each other, the firm, and society.
Businesses Requiring Trade License
All commercial establishment that falls under the following categories must obtain a trade license:
- An establishment or administrative service in which persons are employed or mainly engaged in office work.
- A hotel, restaurant, boarding or eating house, a cafe, or any other refreshment house.
- A theatre, cinema, or any other place of public amusement or entertainment.
The requirement to Obtain Trade License
The government has made it necessary for one to obtain a trade license to ensure that the person is not carrying out unethical business practices and is following the relevant rules, safety measures, and guidelines. A licensed business protects its owners against certain types of liability. If damage or injury occurs the business actions or doings, the personal finances would not be at stake in any settlement. The various types of trade licenses offer different levels of protection.