An Introduction – D & O License / Trade License
D&O Trade License is a certificate issued by the local government like Panchayat, Municipality, and Municipal Corporations. This certificate is permission to do business in the local limits of the concerned Local Self Government (LSGD). The complete form of D & O is Dangerous and Offensive Trades. In Kerala, the Health department of Municipal Corporation/ Panchayat/ Municipality issue the D & O Trade Licence. This registration is mandatory for every constitution of business in Kerala. The D & O License issue in Kerala is controlled and regulated by ” The Kerala Panchayat Raj Act, 1994 “. The trade license applies to all businesses in India, like Proprietorships, Partnerships, Private Limited Companies, LLPs, Societies, etc.
Every commercial/non-commercial Establishment must obtain Trade License issued by the local government. Along with Trade License, commercial establishments must obtain Shop and Establishment License and Labour Welfare Fund Registration issued by Labour Department before starting commercial operations or appointing employees in the Establishment. Commercial Establishments includes shops, offices, hotel, restaurant, boarding or eating house, cafes or any other refreshment house, a cinema theatre, etc.
As part of "The Kerala Micro Small Medium Enterprises Facilitation Act, 2019, Kerala government exempt new entrepreneurs from register under D&O Trade License and Shop and Establishment License whose Investment is below 10 crore. These exemption is applicable for initial three years and apply for all license and clearances from the concerned authority within six month from the expiry of above 3 years. MSME / UDYAM Registration along with KSWIFT Registration is enough to start business in Kerala now for small manufactures.
To learn more about K-SWIFT Program and Registration.
The Kerala Panchayat Raj (Issue of Licence to Industries, Factories, Trades, Entrepreneurship Activities, and Other Services ) Rules/ 2018 now come into force to regulate the Issue of License.” Issue of License to Dangerous and Offensive Trades and Factories Rules 1996 ” has been substituted by the words ” Issue of License to Industries, Factories, Trade, Entrepreneurship Activities, and Other Services Amendment Rules 2018 ” bypassing the ACT ” The Kerala Investment Promotion and Facilitation (No. 2) Act 2018 “.
The Owner / Occupier / Authorized Representative of every place or business used for the purposes specified in Schedule I (Trade, Commerce, and Establishment) shall, within thirty days, submit to the Secretary an application for a license for the use of the such place for such purpose.
If the applicant intends to start more than one business or branch of a company, they want to take the license for each additional trade opened.
Importance & Need for D & O Licence
- The Major objective of the D & O License is to restrict dangerous and offensive trades which is harmful to the public.
- The Village Panchayat may, by affixing notices in the notice board of the Offices of the Panchayat and conspicuous places of every constituency in the Panchayat and by advertisement by way of pamphlets and loudspeakers, notify that no site in the Panchayat area shall be used for any purpose or purposes specified, in Schedule I without the license issued by the Secretary and Officer authorized by him, and except by the conditions specified therein.
- If the license is for running restaurants, eating houses, hotels, coffee houses, tea shops, or barbershops, the permit issued by the Secretary and Officer authorized by him shall always contain. It shall be deemed to have a condition that admission therein shall be available for every public member.
- In Kerala, Trade License Registration is compulsory to pay and file returns of Professional Tax levied by the local self-government.
- Nowadays, a trade license issued by the local self-government is mandatory for partnership and proprietorship firms to open a current account in the Trade Name.
- Trade License is mandatory for applying Shop and Establishment license issued by the Labour Department, and this license is essential for ESI Registration and EPF Registration. All the labour licenses are some much related to the Trade License Registration.
Is Trade License compulsory?
Yes. All business constitutions must obtain prior permission from the local authority to do business within that local limits.
The Application for a Trade License has two phases
- Application for Issue of New Trade License
- Renewal of Existing Trade License
A detailed step-by-step process for apply Trade License in Kerala
Step 1: The applicant has to submit the application along with supporting documents Online or at the counter to Secretary or Officer authorized by him (FORM 1). After receipt of the application and supporting documents, the Secretary shall issue an acknowledgment to the applicant. If any supporting document is missing from the application, the Secretary or Officer authorized by him shall immediately inform the applicant and allow the applicant to submit the missing paper at the earliest but not later than three days from the date of receipt of the application.
Now online applications are made through Sanchaya (Revenue and Licence module) for Local Government Institutions.
Step 2: Depending on the type of trade the applicant wants, the application process starts with the Health Inspector inspecting the proposed trade premises and submitting his field verification details to the Secretary. Based on the remarks received from the Health Inspector, Secretary decides whether the license is to be granted.
Step 3: Trade License Fees Payment ( Fees will be chargeable as per schedule II, Find the below attachment)
Step 4: Trade License will issue within seven days of receipt of prescribed Fees.
The maximum processing time taken to issue a trade license is 15 days. If a Trade license is not issued within 15 days, the applicant can raise a complaint against the concerned LSGD.
Note: The period of the Trade License is Five years (Earlier than Three Years) and shall be renewed automatically after the payment of Trade License fees. The Trade License fee must be paid 30 days before the license expires. No need to file a renewal application for Trade License. Sometimes, the Secretary may ask for a Self Declaration Certificate and NOC from the Premise owner.
To promote trade and commerce in the state of Kerala, the state government simplifies the process of Trade License application in Kerala. The Kerala Investment Promotion and Facilitation Ordinance 2017 (22 of 2017) makes the changes and amendments to Kerala Panchayat Raj (issue of License to Dangerous and Offensive Trades and Factories ) Rule 1996.
Documents Required to Register
Documents applicable for Cochin Municipal Corporations
- Building Owner’s Consent Letter (Rs. 200 Stamp Paper, Notarized)
- Latest Property Tax Receipt (Building Tax Receipt)
- Affidavit of Applicant (Rs. 200 Stamp Paper)
- Rent Agreement
- Aadhaar Card (Applicant & Building Owner)
- MOA / AOA / Certificate of Incorporation / Partnership Deed
- Consent Letter / Board Resolution for Authorized Signatory
Note: Now sanitary certificate issued by the department is mandatorily only for applying for the D and O License at Panchayats.
In the case of an Industry / Workshop / Machinery/ Factory, the applicant must obtain the NOC for installing the equipment before starting the trades.I
In the case of / Hospitals / Clinics/ Paramedical institutions / Clinical Laboratories and other healthcare institutions, The following documents are required
- Report of District Medical Officer of Health
- NOC from the Department of Town and Country Planning
- NOC from State Pollution Control Board
Period of License (Validity) / Mode of Renewal procedures
In Kerala, the d & o license duration is for one financial year (April to March), and the license is renewed yearly. Every d & o license holder must renew the permit & pay the renewal fees before 30 days of expiry, i.e., in February. The applicant must file a new renewal application online on the Sanchaya portal. Any changes from the previous application filed by the applicant must attach a Self Declaration Certificate and NOC from the premise owner.
Maximum fees which may be fixed towards annual license fees
Applicant Affidavit format (on Rs. 200 stamp paper)
Consent Letter from Building Owner Format (on Rs. 200 stamp paper)
Recent Notification against Trade / D & O License
Vol VI No 2326 Dated 31/10/2017
(SRO 674/2017)-Kerala Panchayat Raj (Issue of Licence to Dangerous and Offensive Trades and Factories ) Amendment Rules 2017
Vol VI No 2325 Dated 31/10/2017
Kerala Municipality (Registration of Private Hospitals and Private Paramedical Institutions) Amendment Rules 2017