Setting up a business in India requires obtaining various licenses and permits from government authorities at different levels. These licenses and permits ensure that the business operates in compliance with the law and regulations.
The types of licenses and permits required depend on the nature and size of the business, and the industry it operates in.
Some common licenses and permits required by businesses in India include the trade license, GST registration, PAN card, TAN card, professional tax registration, Shop and Establishment Act registration, FSSAI registration, environmental clearance, and industrial license.
Obtaining these licenses and permits can be a time-consuming and complex process, but it is essential for the smooth operation of the business and for avoiding legal and financial penalties.
Licenses and Permits in India
The Indian economy is growing and unicorn startups are flocking to the country. India’s success is attributed to the growth of businesses in a variety of sectors. It is however necessary to obtain various permits and licenses in order to set up a business in India.
The ability to operate a business depends heavily on getting the permits and licences necessary to conduct business legally. Each state, county, and municipality have particular standards of their own. For some business categories, there are also federal regulations.
Nevertheless, India has made great strides in recent years, making it easier for entrepreneurs to establish businesses there. Several factors influence the licensing procedure, including the number of employees, the industry, the type of business, and the location.
Licenses and permits are crucial in every type of business in every sector or industry. Businesses that have obtained all the permits and licenses stay out of legal trouble. This guarantees that no one is harmed in any manner as a result of a business’s disruption. It keeps a check that no one is involved in illicit commercial operations and that the business or trade is being conducted in a certain area and place.
Therefore, business registration in India is compulsory for the own benefit of the business entity. To allow businesses to function, the government of a particular municipality or state issues licences and permits. Companies are permitted to carry out specific operations in a particular location. Also, these licences and permits are used to check on firms to see if they are abiding by the law’s requirements.
Eligibility to Apply for a Business License
The eligibility criteria to apply for permits and licenses for business set up in India only requires three conditions to be fulfilled:
- The applicant must be at least eighteen years old.
- There should be no criminal record of the applicant, applying for the licenses and permits.
- The business entity or the business for which such license and permit is required should be lawful to operate.
List of Business Licenses in India
Licenses and permits are critical for any type of business in any sector or industry. Businesses that have obtained all permits and licenses are safe from legal problems.
The list of licenses and permits required for setting up a business in India is as under:
- Business registration
The first step to starting a business is to get the business registered as per the structure of the company. There are different types of business configurations like Company, Limited Liability Partnership, One Person Company, Partnership, Private and Public Limited Company. These business entities can register under regulations issued by the Ministry of Corporate Affairs. Business registration in India is mandatory for every type of business.
- PAN Card
A PAN card is necessary for anyone doing business with an Indian company or in India. Regardless of whether the company is registered, has a permanent establishment, or has an office in India, it is also necessary for anybody who is involved in the generation of income out of India.
PAN cards for businesses or companies can be obtained by submitting of PAN application form – Form49A.
- GST Registration
All businesses and individuals with annual revenues of more than Rs. 20 lakhs in the majority of areas and Rs. 10 lakhs in Special Category Provinces are required to register for GST. Regardless of income, anyone delivering products for intra-state sale must register for GST.
- Professional Tax Registration
Each individual who receives income from the practice of a profession, occupation, or trade is subject to professional tax, which is a direct tax. Professional tax in India is collected by the government of a state or union territory.
Professional Tax Registration is mandatory within 30 days of employing staff in a business, in the case of professionals, 30 days from the start of the practice. Application for the Registration Certificate should be made to the assessed state tax department within 30 days of employing staff for his business.
- Shop and Establishment Act License
Shop and Establishment Act licences or registrations, which differ by state, are provided by state governments. As a result, depending on the State where the company is located, the appropriate State Public body should be contacted to get a Shop and Establishment Act License.
- Trade License
To conduct business activities including importing, exporting, and manufacturing, one must have a trade licence. You must submit an application and fulfil the conditions to obtain a trade licence. The requirement and procedure to apply for the same can be different depending on the state where business is carried on.
- FSSAI License
Under FSSAI, the license or registration is divided into three categories namely: FSSAI Central License, FSSAI State License, and FSSAI State Registration.
- Fire Department NOC
The Indian Fire Department issues a No Objection Certificate (NOC) to protect against fire-related damages. The NOC is provided following evaluation of the impacted premises, fire assistance and fire safety mechanisms. The evaluation findings must adhere to all fire safety requirements set forth by the Bureau of Indian Standards.
- Environmental Clearance
The Environmental Clearance Certificate is a mandatory requirement for the project activities included in the Schedule of EIA notification dated 14th September 2006 under the Environment (Protection) Act 1986 before initiating any project-related activities on the site.
- Import Export Code
Everyone involved in importing or exporting products or services from India is required to get an Import Export Code from the DGFT Department. An Import Export Code can only be issued to a company that has both a PAN and a bank account.
- MSME Registration
Udyam Registration, also known as MSME Registration, is nothing more than a government registration that comes with a certificate of recognition and a special identification number. This registration serves to certify small, medium-sized, and microbusinesses. Small businesses have to get their business registration in India under MSME Act.
- Trademark Registration
A trademark may be registered under the Trademark Act of 1999. It permits the owner to have sole ownership rights and forbids other parties from using the mark in a way that benefits the registered mark’s owner. Once a trademark application has been approved, the applicant and the brand may use the “TM” symbol. Trademark registration in India is necessary to safeguard the brand name.
All types of businesses require certain licenses and permit: from government agencies to register their businesses. It all depends on the type of business you plan to conduct. To evaluate and understand the legal requirements involved with obtaining a business licence and permission in India, speak with an expert before beginning a business.
Follow For More: @Dissenttimes.