A trade license is an official approval granted by government authorities that permits a company to engage in a specific type of business. There are various types of trade licenses available, each corresponding to a different category of trade. Obtaining a trade license is mandatory and is issued by state government authorities to initiate new business activities. Company registration, on the other hand, is governed by the provisions outlined in the Companies Act, 2013. It establishes the legal framework for a new business entity. In contrast, a trade license allows an existing business to expand into new business activities. It is crucial to select the appropriate business activity that aligns with the requirements of law and taxation when applying for a trade license or choosing the right structure for company registration.