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Trade License

Differences Between Trade And Shop Establishment License

A trade license is a document granted by the Municipal Corporation that allows you to carry out a specific trade at a specific address while adhering to the laws of the trade. It's part of a larger drive to control trade so that citizens aren't exposed to health risks and annoyances.

A shops and establishments license makes it mandatory for all business entities to register their shops and establishments within 30 days of commencing operations. It comprises not only businesses and commercial establishments, but also work-at-home opportunities. You will receive a certificate for your shop or establishment once you have registered it. It is carried out in order to regulate the working conditions of workers and employees in shops and commercial establishments

Differences Between Trade And Shop Establishment License

Who Does It Cater To?

A person who wants to start a business or a store must register it with the local government as a Shop Establishment, whereas a trade license is an authority given to a person to carry out a certain business or trade.

Types of Establishments Covered

Shop and Establishment licenses are also available for residential properties, whilst Trade licenses are exclusively available for commercial properties. Trade licenses are mainly required for establishments like hotels, restaurants, canteen, food stalls, manufacturing industries, cyber café, etc. while Shop Establishment is required for every shop and commercial establishment that is doing business or providing any services.

Objective Purpose

A Trade license is required by law to ensure that a person is not engaging in unethical business operations and is adhering to the laws and safety recommendations given by the government from time to time. Shop Establishment is mostly essential for small business owners and traders that engage in any type of commercial activity and regulates salary, work hours, rest times, lunches, breaks, leaves, and other work situations for employees employed in various locales. Each company location must be registered, with the exception of those that are already registered under the Factories Act of 1948.

trade license registration online

shop licence registration

Ambit of the Licenses Vary

A trade license is essential for any legal business or service activity, while a shop establishment license is required for the tiny unorganized sector. It safeguards workers’ and employees’ working conditions by establishing working hours, opening and closing hours, wage rates, and weekly holidays, among other things. It also establishes working hours for women in the workforce, as well as child labor.


The regulations governing both trade licenses and shop establishments licenses range from state to state because each state has its own set of rules. Every state has its own set of fees for similar services. Generally, both must be registered within 30 days of business commencement.

Now that you have acquired enough knowledge about the registration of shops, you must be eager to get one. However, the procedure of licensing is complex, and you must consult a professional before applying it directly. The best legal advisory for you would be our Advisor Desk at Vakilsearch. Our experts ease the process of registration for shops and Establishments. We can transform your dream project into reality so contact us today.

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