Starting a business in India requires legal compliance to avoid penalties and ensure smooth operations. This guide covers mandatory legal registrations, industry-specific licenses, tax requirements, and government schemes that help entrepreneurs build a strong foundation.
1️⃣ Business Structure & Registration 🏢
Choosing the right business entity affects taxation, liability, and compliance requirements.
Sole Proprietorship
Partnership Firm
Private Limited Company (Pvt. Ltd.)
Limited Liability Partnership (LLP)
💡 Important:
PAN is required for all business types.
GST is mandatory for e-commerce sellers, interstate sales, and service businesses with ₹20L+ turnover.
2️⃣ Essential Business Registrations 📄
✔️ Permanent Account Number (PAN)
Why? Required for taxation and financial transactions.
✔️ Tax Deduction Account Number (TAN)
When Needed? If deducting TDS.
Why? Mandatory for businesses deducting tax at source for employees or vendors.
✔️ GST Registration
When Needed?
If turnover exceeds ₹40L (goods) or ₹20L (services).
Mandatory for e-commerce sellers, importers/exporters, and interstate suppliers.
Why? Required for tax compliance and input tax credit benefits.
✔️ Shops & Establishments License
When Needed? Within 30-60 days of business setup (varies by state).
Why? Essential for businesses operating from a physical location.
💡 Additional GST Requirements:
APOB (Additional Place of Business): Required if you store inventory in warehouses like Flipkart/Amazon.
GST LUT (Letter of Undertaking): Mandatory for exporters to claim zero-rated tax.
3️⃣ Industry-Specific Licenses & Permits 🏭
Depending on your business category, you may need additional regulatory licenses. Here are the key ones:
🏢 Udyam Registration (For MSMEs)
🍽️ FSSAI License (For Food Businesses)
🏭 Factory License (For Manufacturing Units)
⚡ Electricity & Pollution Control Board Clearance (For Manufacturing & Large-Scale Industries)
📺 BIS Certification (For Consumer Goods & Electronics)
🌍 Importer-Exporter Code (IEC) (For Export/Import Businesses)
🏥 Clinical Establishment License (For Healthcare & Diagnostic Centers)
🔬 Drug License (For Pharma & Medical Stores)
4️⃣ Tax & Compliance Essentials 💰
GST Filing: Monthly/Quarterly returns based on turnover.
Income Tax Filing: Annual, depending on entity type.
TDS Compliance: If deducting tax at source for employees/vendors.
Professional Tax: Applicable in select states for salaried employees.
5️⃣ Government Schemes & Grants 🎁
The Government of India offers a plethora of schemes to foster business growth and innovation. Below are some prominent initiatives:
Startup India Initiatives
1. Startup India Seed Fund Scheme (SISFS)
Benefits: Financial assistance for proof of concept, prototype development, product trials, market entry, and commercialization.
2. Fund of Funds for Startups (FFS)
Eligibility: SEBI-registered Alternative Investment Funds (AIFs) that invest in startups.
Benefits: Provides funding support to startups through selected AIFs.
3. Credit Guarantee Scheme for Startups (CGSS)
Eligibility: DPIIT-recognized startups.
Benefits: Provides credit guarantees up to a specified limit against loans extended by Member Institutions to finance eligible startups.
MSME Support Programs
Sector-Specific Initiatives
Final Thoughts 💡
Starting a business in India requires careful planning and compliance with multiple regulations. Following this checklist will ensure that your business is legally sound and benefits from available government support.
Helpful Links
👉🏽 Trade Fair Events India in MARCH 2025!
👉🏽 Learn about GST-Exempt product categories!
👉🏽 Learn about Amazon's Fee structure, here!
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