License Plate Recognition Systems are used to determine the license plate number of a vehicle. The current system mainly uses Optical Character Recognition to recognize the number plate. There are several problems to this system. Some of them include interchanging of several letters or numbers (letter O with digit 0), difficulty in localizing the license plate, high error rate, use of different fonts in license plates etc. So a new system to recognize the license plate number using color coding of license plates is proposed in this paper. Easier localization of license plate can be done by searching for the start or stop patters of license plates. An eight segment display system along with traditional numbering with the first and last segments left for start or stop patterns is proposed in this paper. Practical applications include several areas under Internet of Things (IoT).