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Basic Business Licenses Indian Start-Ups Need

Updated: Mar 5


Start-ups are businesses that are just taking that first big step in becoming established. As such it is an uphill climb for most entrepreneurs. Starting a business in India is a tough game. There are a lot of rules that entrepreneurs must follow. In India, emerging businesses require various licenses before they can legitimise themselves. Now obtaining business licenses depends on what type of business an entrepreneur is running. As a result, this article will explore some of the most common business licenses obtained by start-ups. To better understand what type of business license your start-up may require, you can always approach your start-up mentor. I am a Small Business Start-up Advisor in Mumbai and if needed I can be of service to you in these matters.



LLP or company registration


To start a business in India it’s important to first get your business registered. It’s important to choose the structure you wish your business to follow. A majority of businesses are established as partnership firms or proprietorships and don’t require registration under the government of India. Businesses must attain this registration as it makes it more legitimate and helps it become recognised by The Ministry of Corporate Affairs. Once registered, it makes the company a separate legal entity which in turn helps the owners with limited liability protection. The best way to understand how to register your company is to consult an expert or a business advisor on the matter before the start of the business. This way you know which road you would like to through.



Start-up India registration


When you start a company in India the definition of the start-up is as per the DIPP Notification.

Once your start-up is defined under the DIPP notification, you can now procure your Start-up India registration. Your start-up has to meet certain criteria under the different acts as enshrined under certain laws such as Partnership Firm under Section 59 of the Partnership Act - 1932, Private Limited Company under the Companies Act - 2013, etc.

Your start-up must meet certain criteria such as it not being more than 10 years old. The annual turnover of the company should not exceed rupees hundred crores, etc.


Udyog Aadhar Registration


This registration is specifically for entrepreneurs wishing to start small businesses. The Udyog Aadhar Registration is a fairly new one and is designed specifically for smaller and medium businesses. Once registered, businesses can enjoy certain schemes and subsidiaries created by the government under this.



GST registration


The GST registration must be procured by all sellers, service providers, manufactures, exporters etc. Certain criteria must be met to procure a GST registration. Some of them include the business having an average turnover greater than 20 lacs, the business must sell goods or provide some service, etc. More criteria are provided in the GST Act, so make sure to read up and consult your business advisor. If this registration is not done under 30 days of the incorporation of the business, the government is liable to fine you. These fines and penalties will be severe until the registration is not complete.



To sum up


There are various other registrations that start-ups must undertake under the law. Make sure to do thorough research around the type of business you are looking to create. Besides, I have also created a YouTube video on my YouTube Channel in regards to these registrations that must be undertaken. You can access the video here.

Further for any newly formed start-up, the best way to decide if it requires an angel investor or additional start-up funding is by having a complete business plan. Your business plan should also include a One-Page Business Plan. I have developed a one-page business plan for all start-up founders and entrepreneurs. This business plan helps you ideate what you would like to achieve the following year as well as the activities you are willing to give up. It helps you to understand the shortcomings of the previous year as well.



About Devansh Lakhani


Director of Lakhani Financial Services, and a Chartered Accountant, he helps start-ups raise funds from his network of investors. He guides and advises start-ups to scale up by providing efficient sales, marketing, team building, and business management strategies. He has executed fundraising by block deals on the stock exchange and conducted IPOs and right issues on the SME platform to the tune of over Rs. 50 Crore. He is currently working with start-ups from various sectors to help them channelize their business models and investments.

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