Trade License is a license or permission issued by the municipal corporation granting permission to carry on a particular trade on a particular address. Now the need of trade license. The most important one is that it prevents you from being penalized. Carrying out business without procuring a trade license is an offence in India. Further it is a proof that no illegal activity is carried out in your establishment The Shop and establishment Act regulates the conduct of business like working hours, benefits to employees and all.