Licenses Required for Business

Licenses Required for Business

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Licenses Required for Business

To begin is to succeed. Starting a business in India is not a fairy tale story, but the Nation has made tremendous progress in the recent days and made starting a business, very easy for Entrepreneurs. Today, we will look at the most commonly referred to licenses and registrations required for a business in India.

The process of obtaining license changes from one type of business to the other,  based on various determining factors like the number of employees, sector, the type of business, the place of business etc. In this little article, we look at some of the most commonly obtained licenses or registrations for a business. To determine the exact requirement for your business, get in touch with an IndiaFilings Business Advisor.

Company or LLP Registration

Most businesses in India are started as proprietorships or partnership firms, without any registration from the Central Government. The Ministry of Corporate Affairs regulates the registration of a company and LLP. It is advisable for Entrepreneurs who have plans for operating a business with an annual turnover of more than Rs.20 lakhs to obtain a LLP or Company registration. Once, a company or LLP is registered, the entity would have a separate legal identity and the promoters would enjoy limited liability protection. Further, the business would also become easily transferable and the entity would have perpetual existence. Hence, before starting a business, its best to consult and expert and register a company or LLP.

GST Registration

All types of entities and individuals who have an aggregate annual turnover of more than Rs.20 lakhs in most State and Rs.10 lakhs in Special Category States are required to obtain GST Registration. Further, any person supplying goods involved in intra-state supply is required to obtain GST Registration, irrespective of turnover. In addition to the above criteria, various other criteria has been provided under the GST Act, establishing the criteria’s for GST registration. It is important for all Entrepreneurs to understand the criteria’s and obtain GST registration within 30 days of starting a business.

Udyog Aadhar Registration

 This is a registration available for entrepreneurs who want to start and operate a small business – micro, small and medium enterprises. The eligibility criteria for obtaining Udyog Aadhaar registration is based on the investment in plant & machinery made by a manufacturing concern or investment in equipment made by a service provider. Once, Udyog Aadhaar registration is obtained for a business, it can enjoy various subsidies and schemes specially provided by the Government for helping small businesses in India.

FSSAI License or Registration

 “Food safety and standard authority of India”(FSSAI), is responsible to verify the safety and standardization of food products nationwide. Retail stores, restaurants, modern trade outlets, kiosks and consumers alike look for this five letter word in their food packets or containers.

Under FSSAI, the license or registration is divided into three categories namely:

  • FSSAI Central License
  • FSSAI State License
  • FSSAI State Registration

Import Export Code

Any person involved in import or export of goods/services from India must obtain Import Export Code from the DGFT Department. To obtain Import Export Code, it is mandatory for the business to have a PAN and a Current Account in a bank.

Shop and Establishment Act License

“The Shop and Establishments Act”, was created for regulating the conduct of business like the hours of work, child labor, payment of wages, safety and general health of the employees. Shop and Establishment Act license or registration is issued by the State Governments and varies from States. Hence, based on the State in which the business is situated, the concerned State Government authority must be approached for obtaining Shop and Establishment Act License.

Gumastha licence

If you are planning to start a business in the state of Maharashtra, you must obtain a Gumastha licence. To procure it, one needs to posses the following documents;

  • PAN Card
  • An Address proof or a no-objection certificate from the landlord
  • Application letter in the prescribed format to the Municipal Corporation of Greater Mumbai
  • Authority Letter for Business
  • Government Prescribed Fees for a partnership Firm
  • Memorandum and Article Of association
  • Certificate Of incorporation of the Company
  • Director’s ID and Address proof

Other Licenses and Registrations

Certain types of business that involve aspects of dealing or providing insurance, financial services, broadcasting services, defence related services, etc., would require approval from regulatory bodies like Reserve Bank of India, IRDAI, etc.,

Further, a business may also have ot obtain permits from the fire department, or the pollution control board, or maybe the local healthcare system. It all depends on the type of business you are willing to operate. Hence, prior to starting a business, make sure you discuss your business with a Professional to determine and understand the legal and regulatory requirements.


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Post by Sreeram Viswanath

IndiaFilings is India's largest online compliance services platform dedicated to helping people start and grow their business, at an affordable cost. We were started in 2014 with the mission of making it easier for Entrepreneurs to start their business. We have since helped start and operate tens of thousands of businesses by offering a range of business services. Our aim is to help the entrepreneur on the legal and regulatory requirements, and be a partner throughout the business lifecycle, offering support at every stage to ensure the business remains compliant and continually growing.