Trade License in Bihar

A Trade License in Bihar is an official approval issued by local authorities, either the municipal corporation or municipal council, that legally allows a business to operate within a specific area. It ensures that all commercial activities comply with the Bihar Municipal Act, 2007, and other state-specific regulations related to public safety, sanitation, and environmental standards.

In Bihar, obtaining a trade license is mandatory for all business owners, shopkeepers, professionals, and service providers operating in urban areas like Patna, Gaya, or Bhagalpur. The license is commonly called a Certificate of Enlistment and acts as proof that the business is recognized and authorized by the government.

Operating a business without a valid trade license in Bihar can lead to serious consequences, including:

• Monetary fines as per the Bihar Municipal Act, 2007, for operating without a license.
• Temporary or permanent suspension of business activities by local municipal or Panchayat authorities.
• Inspection raids or legal notices that may interrupt daily business operations.

Therefore, securing a trade license in Bihar is a non-negotiable step for any entrepreneur or business owner. It not only ensures compliance with state and local laws but also establishes your business as a legally recognized and trusted entity in Bihar’s commercial ecosystem.

In Bihar, trade licenses are broadly categorized based on the nature of the commercial activity, often aligning with General Trade, Food-Related Trade, Industrial Trade, and Dangerous/Offensive Trades. Here’s how specific business activities fit under these categories:

1. General Trade

Covers commercial activities not falling under specific high-risk or regulated sectors. Examples include:

• Shop and Establishment License: For shops, offices, and small businesses, ensuring compliance with labor laws and basic safety under the relevant Bihar Shops & Establishments rules.
• Home-Based Business License: For businesses operating from residential premises, ensuring compliance with local zoning and safety regulations.
• E-Commerce / Online Business License: For businesses operating digitally or online, ensuring compliance with local commercial laws.

  Read more about the license from the blog “Trade License for Online Business”

• Educational / Training Institute License: For schools, coaching centers, and vocational institutes, confirming compliance with local education and safety norms.
• Transport & Logistics License: For courier, freight, and logistics businesses operating commercially in Bihar, complying with transport and commercial vehicle regulations.

2. Food-Related Trade

For businesses handling food or consumables, ensuring hygiene, health, and food safety:

• Food and Health Trade License: Mandatory for restaurants, hotels, bakeries, and other food-related businesses, regulated under FSSAI and state guidelines, and issued by the municipal body's Health Department.

3. Industrial Trade

For factories, manufacturing units, and other industrial operations:

• Industrial Trade License: Ensures adherence to safety, environmental, and pollution control norms under state regulations.
• Environmental / Industrial Waste License: For industries generating waste, confirming compliance with environmental and pollution control rules, often requiring clearance from the Bihar State Pollution Control Board (BSPCB).

4. Dangerous/Offensive Trades

Covers high-risk or potentially hazardous activities that require stricter oversight:

• Liquor / Beverage Trade License: A liquor license is required for bars, liquor shops, breweries, and establishments serving alcohol, as per the Bihar Excise Rules.
• Medical & Pharmaceutical Trade License: For clinics, hospitals, pharmacies, and medical supply stores, ensuring adherence to health regulations and pharmacy laws.
• Entertainment License: Required for cinema halls, event management companies, and amusement centers, confirming compliance with safety and public entertainment norms.
• Import/Export Trade License: For businesses involved in international trade, the Import Export License ensures compliance with customs and state trade regulations.

Businesses and professionals operating within areas under a Municipal Corporation or Municipal Council must obtain a trade license in Bihar.

• Shops and Retailers: This includes all types of retail outlets, such as grocery stores, textile shops, medical stores, and general stores.
• Food and Hospitality: Hotels, restaurants, cafes, food stalls, bakeries, food trucks, and catering services must obtain this license to ensure they comply with health and safety standards.
• Service Providers: Businesses offering services, such as salons, spas, gyms, laundry services, repair shops, workshops, and consultancy firms, are required to have a Trade License.
• Manufacturing and Industrial Units: All factories, manufacturing plants, and production units, regardless of their size (small, medium, or large scale), must be licensed.
• Medical Establishments: Hospitals, clinics, nursing homes, and diagnostic centers are required to have a Trade License to operate legally.
• Warehouses and Godowns: Establishments used for the storage and warehousing of goods need this license.
• Dangerous/Offensive Trade License: For businesses engaged in activities such as chemical storage, welding, fuel distribution, meat or fish selling, or operating workshops that may pose health or safety risks. In Bihar, such businesses must obtain a No Objection Certificate (NOC) from the Bihar State Pollution Control Board (BSPCB) and, in some cases, from the Fire Department before applying for a trade license.

Businesses Exempt from the Trade License Requirement: There is no general exemption for businesses. Even in rural areas (Gram Panchayats), a similar form of license/registration may be required from the local self-government body.

Applying for a trade license in Bihar ensures that your business operates legally under the Bihar Municipal Act, 2007. The Urban Local Bodies (ULBs), like the Patna Municipal Corporation (PMC), handle the applications.

Step 1: Visit the Official Portal

• For urban areas, visit the official website of your Bihar municipal corporation trade license portal (e.g., Patna Municipal Corporation (PMC): pmc.bihar.gov.in/ ).
• Always confirm that you are on the correct Bihar portal to ensure accurate processing and updates.

Step 2: Register Your Account

• Create an account on the portal using valid personal and business credentials.
• Use a secure login ID and password to access the trade license online in the Bihar application form.
• Keep your login details safe for future trade license renewal online in Bihar and status tracking.

Step 3: Fill the Application Form

• Enter complete details about your business, including owner information, business type, trade activities, operational hours, and address of the premises.
• Accuracy is crucial, as incorrect information may delay approval or lead to rejection.
• Use the trade license application form available on the Bihar corporation section to submit your details.

Step 4: Upload Required Documents

• Upload scanned copies of identity proof, address proof, and business-related documents.
• Include documents such as a lease agreement, NOC from the property owner (if applicable), and trade-specific licenses.
• Ensure the files meet the portal’s format and clarity requirements for smooth processing.

Step 5: Pay Fees Online

• Pay the applicable trade license fees in Bihar online using net banking, UPI, or debit/credit card.
• Fees vary based on business size, type, and municipal regulations.
• Keep the payment receipt for reference and verification during license issuance or future trade license renewal in Bihar.

Step 6: Submit the Application

• Review all details carefully before submission.
• Ensure all mandatory fields are filled, and documents are uploaded correctly.
• Submit the application for verification by municipal authorities.

Step 7: Track Application Status

• After submission, monitor your application through the trade license status Bihar section on the portal.
• Updates may also be sent via email or SMS.
• Contact municipal support if any delays or clarifications are needed.

Step 8: Inspection (If Required)

• Some businesses may require a physical inspection by municipal officers.
• Ensure your premises meet safety and zoning standards.
• Address any observations promptly to avoid rejection of your trade license in Bihar.

Step 9: Receive the Trade License

• Once approved, download your trade license certificate for Bihar in PDF format.
• Keep a copy for records and display it at your business premises if required.
• This certificate will also be used for future trade license renewal online in Bihar, audits, or official verification.

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Incomplete documentation is a common reason for delays. The required papers usually fall into the following categories:

1. Identity and Address Proof

• Applicant’s Identity Proof (any one of the following):
  • Aadhaar Card
  • Voter ID
  • Passport
  • Driving License
• Business Premises Address Proof (any one of the following):
  • Lease/Rent Agreement (if the property is rented)
  • Latest Property Tax Receipt (if owned)
  • Electricity/Water Bill (in the name of owner or entity)
  • PAN Card of the business

2. Proof of Business Ownership

Depending on the type of business, you will need different ownership documents:

• For Companies
  • Certificate of Incorporation

  • Memorandum of Association (MOA) & Articles of Association (AOA)

• For Partnership Firms
  • Partnership Deed

  • Certificate of Company Registration (if available)
• For Proprietorships
  • Proprietorship Declaration/Certificate
  • Any government-issued proof of proprietorship

3. Proof of Business Premises

To confirm the legal right to use the premises:

• Lease/Rent Agreement (if rented)
• Property Tax Receipt (if owned)
• NOC (No Objection Certificate) from the property owner, neighbors, or local body (depending on the nature of business)

4. Other Supporting Documents

In some cases, extra documents may be required based on the type of trade:

• Occupancy Certificate (to prove the premises are legally occupied)
• Layout Plan of the business premises (approved/certified)
• Affidavit or Declaration stating the legitimacy of the business
• Bank Details of the business/entity
• Certificate of GST Registration (if applicable to your business activity)
• Trade-specific clearances like FSSAI License for food businesses or Pollution Control NOC for manufacturing units.

The fee for obtaining a trade license in Bihar depends on factors such as the type of business, its size, and the location of the business premises. Generally, trade license fees in Bihar range from ₹500 to ₹10,000 per year, depending on these factors.

• Small Shops & Local Businesses: Charge a basic, lower fee.
• Medium-Sized Businesses: Slightly higher charges apply to warehouses, restaurants, and workshops.
• Large or High-Risk Businesses: Industries, factories, and businesses dealing with hazardous goods are required to pay the highest fees due to increased compliance checks.

Renewal & Late Penalties

• Annual Renewal: Trade licenses in Bihar are generally valid for one year (typically the financial year) and must be renewed annually.
• Renewal Charges: Renewal fees are usually similar to the initial application fee, though sometimes slightly lower.
• Late Penalties: Failure to renew on time will result in late fees or penalties, which are typically a percentage of the original license fee, imposed for each day or month of delay. Non-renewal can lead to the suspension or cancellation of the license, along with heavy fines.

After your trade license application is approved in Bihar, the Urban Local Body (ULB) or Municipal Corporation issues a Trade License Certificate. This certificate is official proof that your business is legally authorized to operate in a specific area of Bihar.

How to Download Your Trade License Certificate in Bihar?

Once your trade license is approved, you can easily download the certificate online. The process is typically facilitated through the official state or municipal service portal.

Here’s how you can download a trade license certificate online in Bihar:

1. Visit the Official Portal: Open the official website of your Municipal Corporation or Urban Local Body (ULB) in Bihar (e.g., Patna Municipal Corporation portal or the state’s unified e-governance service portal for ULBs).
2. Log in to Your Account: Enter your registered email ID or mobile number along with the password used during the application.
3. Access Trade License Section: Navigate to the "Trade License," "Certificate of Enlistment," or "Download License" section.
4. Enter Application/License Number: Provide the reference number or license number received at the time of application or approval.
5. Download Certificate: After confirmation and successful verification of the details, the system will allow you to download the Trade License Certificate in PDF format.

How to Check Trade License Status and Verify Authenticity in Bihar?

It is important to confirm the status of your application and verify that your license is authentic. Bihar's Municipal Corporations provide online facilities for both tracking and verification.

Check Application Status

1. Visit your Municipal Corporation's official website or the designated state ULB portal.
2. Select “Application Status” or “Track Application” from the menu.
3. Enter your application/reference number.
4. The portal will show whether your application is pending, under review, approved, or if any clarification is needed.

Verify License Authenticity

1. Access the “Verify Trade License” or “Enlistment Certificate Verification” section on the portal.
2. Enter the trade license number, year of issue, and registered business name.
3. The system will display details such as validity, ownership, and official confirmation of the license.

Always keep both a digital copy and a printed copy of your trade license in Bihar for inspections or compliance checks.

A Trade License in Bihar is a legally binding document with a limited validity, typically one financial year. To ensure the continuous and lawful operation of your business, it is mandatory to renew the trade license annually before the expiry date.

Online Renewal Process in Bihar

The process for Trade License renewal is similar to the initial application and is conveniently completed online through the relevant government portals, such as the official website of the concerned Urban Local Body (ULB), like the Patna Municipal Corporation (PMC), or the state's unified service portal.

1. Access the Portal: Log in to the online portal of your respective Municipal Corporation or Urban Local Body (Nagar Parishad) in Bihar.
2. Access the Renewal Section: Find the "Trade License" or "Certificate of Enlistment" section and select the "Renewal" option.
3. Enter Application Details: You will need to enter your previous license number and other required information to retrieve your existing business details.
4. Verify and Update Information: Review the pre-filled information and make any necessary updates, such as changes in the business address or ownership details.
5. Upload Required Documents: Upload digital copies of the necessary documents (see list below).
6. Pay Renewal Fee: Pay the renewal fee online. The fee can be paid using a debit card, credit card, or net banking. Keep the receipt for future reference.
7. Final Submission: Complete and submit the application. You will receive an acknowledgment with a new application reference number. Once processed, the renewed license will be available for download.

Documents Needed for Renewal in Bihar

While the exact list may vary slightly by municipal jurisdiction in Bihar, the standard documents required for renewal generally include:

• The original Trade License certificate from the previous year.
• The last year's challans or receipts for license fee payments.
• The up-to-date Property Tax Receipt of the business premises.
• A copy of the rental agreement if the premises are leased.

Importance of Timely Trade License Renewal in Bihar

Renewing your trade license on time is essential for the smooth and uninterrupted operation of your business under the Bihar Municipal Act, 2007.

• Legal Compliance: A valid Trade License is a fundamental legal requirement.
• Avoids Penalties: Operating a business with an expired license is a violation that can lead to significant financial penalties and legal action.
• Prevents Business Closure: Municipal authorities in Bihar have the power to seal or shut down your business premises in cases of severe non-compliance until the license is renewed and all penalties are paid.
• Maintains Credibility: A current and valid Trade License enhances your business's credibility, which is vital for securing contracts, loans, and other official registrations (like GST or FSSAI).

Penalties for Late Renewal in Bihar

It is generally mandatory to apply for renewal before the expiry date (typically by April 1st of the new financial year). Failure to do so can result in:

• Fines: The local authority will impose a penalty, often calculated as a percentage of the original license fee, for each day or month of delay.
• Legal Action: Continued non-compliance can lead to more serious legal consequences, including prosecution.
• License Cancellation: The local body has the right to cancel your Trade License, forcing your business to cease operations.

By securing a Trade License (or Certificate of Enlistment), you not only comply with the law but also unlock a range of advantages that support the growth, credibility, and smooth operation of your business in Bihar.

1. Legal Compliance and Business Credibility

• The license acts as official proof that your business is legitimate and operating within the bounds of the Bihar Municipal Act, 2007, and other local regulations.
• A licensed business builds trust with customers, suppliers, and investors, enhancing its overall reputation in the market.
• Without a Trade License, your business is at risk of facing serious consequences, including heavy fines, legal action, and potential closure by municipal authorities.

2. Access to Government Schemes and Loans

• Banks and Non-Banking Financial Companies (NBFCs) often require a valid Trade License as a mandatory document for business loan applications and securing credit facilities.
• A licensed business is frequently a prerequisite for availing various government-sponsored schemes, subsidies, and grants aimed at promoting business growth and entrepreneurship by the Bihar state government.

3. Smooth Business Operations

• With a valid license, your business is safeguarded from unexpected inspections, closures, or legal disputes with urban local bodies (ULBs).
• The Trade License is a foundational document that simplifies the process of obtaining other important registrations and clearances, such as GST registration or an FSSAI license for food businesses.

By fulfilling this fundamental legal requirement, business owners in Bihar can focus on their core activities, serving customers, and growing their enterprise, without the constant worry of non-compliance.

Obtaining a Trade License in Bihar is governed by specific state and local regulations that vary depending on the nature of the business and its location, primarily under the Bihar Municipal Act, 2007.

1. Bihar Municipal Corporation/Local Body and Trade License Authority

In Bihar, the authority to issue Trade Licenses is vested in the Urban Local Bodies (ULBs).

• For Urban Areas: In major cities like Patna, the process is managed by the Municipal Corporation (e.g., Patna Municipal Corporation - PMC).
• Fee Structure Angle: The fee structure is not uniform and generally varies based on the type, nature, and area of the business premises, ensuring different rates for small shops versus large enterprises like malls or manufacturing units.

2. Specific Industries Requiring Special Trade Licenses

Certain types of businesses require specialized trade licenses and additional clearances due to the nature of their operations in Bihar:

• Food and Health Establishments: Businesses such as restaurants, hotels, hospitals, clinics, and food processors require a Health/Trade License issued by the municipal body and the mandatory FSSAI License (Food Safety and Standards Authority of India).
• Industrial and Manufacturing Units: Factories and production units need a specific Industrial Trade License. They are often required to obtain additional clearances, such as a No Objection Certificate (NOC) from the Bihar State Pollution Control Board (BSPCB), to ensure they meet environmental safety standards.
• High-Risk Trades: Businesses involved in activities like handling hazardous chemicals, storing flammable materials (e.g., petrol pumps), or producing fireworks are categorized as high-risk. They must obtain specific permits and clearances, often requiring an NOC from the Fire Department.

Recent Changes or Updates in Trade License Rules for Bihar

The state has implemented updates to streamline the process and enhance transparency, often facilitated through the state's Nagar Seva Portal or similar ULB service platforms:

• Online Systems: There is a significant shift towards online portals for application and renewal, allowing for quicker processing, online fee payments, and the issuance of digital certificates, thus promoting Ease of Doing Business.
• Focus on Professional Tax Integration: Amendments, such as those to the Bihar Professional Tax Rules, 2011, may require businesses to update or obtain trade and Professional Tax registration, which is closely linked to the Trade License process.
• Stricter Digital Verification: The new digital systems allow for online tracking of application status and ensure stricter verification to improve accountability and reduce non-compliance among businesses.