It gives legal protection to the business startup. Without a trade license, business startup is considered illegal which may lead to the penal consequences based on the nature and duration of the company. This certificate is issued to ensure that any person is not carrying out any business startup activity that is unethical and follows the rules and regulations set up by the local municipal corporation.
With the increase in the development of a commercial area in Pakistan, Trade license registration was introduced to make sure that no commercial activities run in a residential area and is not a health hazard. Once a business startup is granted permission to perform its operations in an area, No authority has the right to shut down their business startup without any legal notice. This induces competence within entrepreneurs.
A trade license registration is a certificate that grants permission to the applicant to begin a particular business startup or trade in a particular area. Furthermore, it does not confer ownership of property or does not grant any permission for any other activity other than which it is issued.
Trade license is issued by the licensing department of Municipal Corporation in various departments like health, industries, engineering, etc. It confers the permission by the way of letters or documents/certificate to carry on any business startup in the area where it is located. The issuance of the certificate varies from state to state depending on the rules and regulations of local government agencies.
Applicant must have the crossed the age of 18 years applicant must not have any criminal account business startup must be carried out in a legally permissible manner.
It generally takes up to 7 to 10 working days to process the application of trade license in metro cities whereas, in other small cities and rural areas it takes even longer.
As per the rules of Municipal Corporation, every person or business startup engaged in any kind of trade or business startup is required to obtain a trade license registration. However, an individual doesn't need to get started without a trade license registration but it is good to have one.
The validity of the trade license is for one year by the authority and it is required to be renewed every year.