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Difference Between Trade License and Company Registration


At the point when a business gets everything rolling, there are a ton of lawful and monetary compliances included, which is one requirement to finish. These compliances rely upon the kind of element one is deciding for the business. There are different kinds of entities in India, depending on the entrepreneur and which sort of substance one needs to enroll for the industry. Based on the company and business registration, consistency should be finished. Compliance plays an exceptionally critical role because, supposing that one doesn’t conform to these compliances, heavy penalties can be imposed.

Even a tiny penalty can cause significant misfortune for a recently settled business; consequently, one should know about these compliances. You should learn about these confusions if you are also beginning a business. The two most significant compliances expected for every business are trade licence and company registration. The ongoing web journal will discuss each part of these two compliances, particularly the contrast between the trade licence and company registration.

What Is an Trade License?

To maintain a specific type of business in a particular region, permission needs to be taken by the competent authority, and that authority gives that authorization as a licence. This licence is known as a Trade License. A portion of the standard types of trade licence are shown below:

What Is Company Registration?

The course of registration of an element under the Companies Act of 2013 or some other Companies regulation that existed before the Act of 2013 is known as company registration. Under the company law, company registration is of the following types:

  • Private Limited Company
  • Public Limited Company
  • Nidhi Companies
  • Banking Companies
  • One-person Company
  • Associate Company
  • Company Limited by Guarantee
  • Company Limited by Shares
  • Foreign Company
  • Government Company
  • Holding Company
  • Subsidiary Company
  • Small Companies
  • Unlimited Company 

Key Differences Between Trade Licence and Company Registration

The trade licence and company registration are two different parts of a business. The following are some significant differences between a trade licence and company registration:


Trade License

Company Registration


It is required for the existing entities.

It needs to be done so that an entity comes into existence.


Valid for one year

Valid for lifetime


Needs to renew

There is no need for a renewal.


There are no types of trade licences.

There are many types of companies. Some of them are mentioned above.


 The entire process of obtaining a trade licence takes 7-10 working days.

The entire process of company registration takes 10-15 working days.


Minor cannot take a trade licence.

Directors of the company must not be minors.


There are no minimum or maximum requirements for members of a trade licence. 

The minimum and maximum number of directors are listed in the company registration. But it depends on which type of company one is registering. For example, a private limited company needs a minimum of two directors, and a public limited company requires a minimum of seven directors to get company registration.


For some businesses, it is suggested that all companies take a trade licence.

Every company needs to get company registration to come into existence.


No complies in case of trade licence.

Registered companies need to comply with various compliances like submission of Form INC-22, MGT-7, DIR-1, etc., before the ROC.


There are no minimum and maximum capital requirements.

Needs minimum and maximum capital. It also varies from company to company. 

Key Points of Trade Licence and Company Registration

One should know some key points before taking a trade licence and company registration. These critical points for trade licence and company registration are given below:

Process of Company Registration

  • Apply for the name approval of the company.
  • When the name gets approved, finish up the SPICe+ Part A and SPICe+ Part B forms and submit them before the registrar of companies.
  • ROC will check the application for registration
  • They will give the company a consolidation certificate within 10-15 working days if everything fits.

Process to Get Trade Licence

  • Visit the authority site of the respective competent authority
  • Make the login qualifications and log through the same on the official portal of the individual capable power
  • Finish up the form and give all the fundamental data to the authority.
  • After finishing the form, please submit it to the competent authority.
  • Confirmation of application by the competent authority
  • On the off chance that everything is dated and correct, a trade licence, which is otherwise called a business licence, will be given by the competent authority within 7-10 working days after the application’s accommodation.

Documents Required for Company Registration

  • KYC documents of the director’s approved signatory and investors of the companies
  • One photo of the directors and approved signatory of the companies
  • Verification of the company’s place of work will be required. If it is on lease, the lease agreement will work at that point; if not, the service bill will be required.
  • If the business is on a lease, then a no-objection certificate of the proprietor will also be required.
  • Bank statements of the directors and approved signatory of the company

Documents Required for Trade License

  • KYC documents of the directors, accomplices or approved signatory of the element
  • One photo of the directors, accomplices or approved signatory of the element
  • Verification of the company’s place of work will be required. If it is on lease, the lease agreement will work at that point; if not, the service bill will be required.
  • A no-objection certificate from the proprietor will also be required if the business is put on a lease.
  • Documents of the elements like MOA, AOA, COI, deeds, etc


TRADE License and company registration are urgent but particular parts of launching and maintaining an organization in India. Existing organizations require trade licences to work in specific areas. They are classified by business type, serving as a consistent licence. In contrast, organization enlistment includes laying out a lawful substance under different company types, characterizing the business’ design and life span. Trade licences require yearly restoration and have no particular part or capital prerequisites. In contrast, company registration, which can take a piece longer, requires a minimum number of directors and can involve shifting capital requests based on the company type.

Out of the primary qualifications between trade licence and company registration, one is that trade licences have less continuous consistency commitments; registered companies should stick to various administrative necessities, making it fundamental for business owners and entrepreneurs to separate between these two cycles to guarantee they meet the proper legal models for their particular business attempts in India.

We hope that our article has been productive and helpful to you. If you need any further guidance, you can contact

G.Durghasree B.A.B.L (Hons)

G Durghasree B.A.B.L (Hons) is a registered trademark attorney with extensive experience as an Advocate for a period of 8 years. She possesses expertise in trademark law, including trademark filing and trademark hearings. Additionally, she is skilled in contract drafting and reviewing, providing legal advice and opinions, particularly in the areas of Company Law, Insolvency and Bankruptcy Code (IBC), and Goods and Service Tax Law (GST). Her experience encompasses both litigation and non-litigation aspects of these laws.