Starting a business in India comes down to three layers, done in order. First, choose a legal structure. Second, register that structure, if it needs registering. Third, take the registrations your activity triggers: tax, labour, state and sector. Most of the delays people complain about come from doing these out of order, for example signing a lease in a personal name and then discovering it does not work as a company’s registered office, or hiring staff before thinking about PF.
This guide walks through each layer with the decisions you need to make. It is a map, not a filing manual; each step has its own detailed rules. If you want the setup handled, Complianto’s business registration services cover the main structures and the registrations that follow.
Step 1: Choose the structure
India offers five common forms for a new business. They differ on four things that matter: who carries the risk, how many owners you need, whether you can bring in investors, and how much yearly compliance you sign up for.
| Structure | Owners | Your personal liability | Registered with | Good fit |
|---|---|---|---|---|
| Sole proprietorship | 1 | Unlimited | No registration of its own | Testing an idea, freelancing, small local trade |
| Partnership firm | 2 or more | Unlimited, joint and several | State Registrar of Firms (optional in most states, but advisable) | Small businesses between people who trust each other fully |
| LLP | 2 or more | Limited to contribution | MCA | Professional firms, family businesses, partners without equity investors |
| One Person Company | 1 member | Limited | MCA | Solo founders who want a company |
| Private limited company | 2 to 200 | Limited | MCA | Anything that will raise investment, issue ESOPs or scale |
Three questions settle most cases:
- Will you raise equity from investors? If yes, a private limited company. Nothing else issues shares.
- Is there real risk in the business? Contracts with penalties, staff, supplier credit, a lease, product liability. If yes, you want limited liability: an LLP, OPC or company.
- How much yearly compliance can you carry? A company is audited every year and holds board meetings and an AGM. An LLP files two forms a year and is audited only above set limits. A proprietorship has no registrar at all.
If you are torn, it usually helps to be honest about the next two years, not the next ten. A structure can be changed later, though changing costs effort and sometimes tax.
Step 2: Register the structure
Sole proprietorship
There is nothing to incorporate. The business exists once you start trading. In practice its identity is built from the registrations in Step 3: GST if needed, Udyam, and your state’s shop and establishment registration. A bank will usually ask for two of these before it opens a current account in the business name.
Partnership firm
The partners sign a partnership deed, stamped according to the state’s stamp law. The firm can then be registered with the state’s Registrar of Firms. Registration is optional under the central Partnership Act, but an unregistered firm cannot sue to enforce its contracts, and some states have made the rules stricter. Treat registration as part of setting up, not an afterthought.
LLP
An LLP is incorporated on the MCA portal: name reservation through RUN-LLP, incorporation through FiLLiP, then the LLP agreement filed within 30 days. You need at least two designated partners, at least one of them resident in India, each with a digital signature certificate.
Private limited company or OPC
Companies are incorporated through the MCA’s SPICe+ form. One integrated filing covers the name, director identification numbers for up to three new directors, the e-MoA and e-AoA, and the company’s PAN and TAN. The MCA charges no incorporation filing fee for companies with authorised capital up to โน15 lakh; state stamp duty on the MoA and AoA is still payable. For the full process and document list, see registering a private limited company.
Whichever MCA structure you pick, prepare these before you file:
- Digital signature certificates for every director or designated partner.
- Identity and address proof for each of them: PAN, and Aadhaar or passport.
- Registered office proof: a utility bill not older than two months, plus the rent agreement and the owner’s no-objection letter if the place is not owned by you. A home address is allowed.
- Two or three name options, checked against the MCA register and the trademark register.
Step 3: The first registrations
Once the entity exists, a set of registrations follows. Not all apply to every business. The table shows what triggers each one; the sections after explain them.
| Registration | Who needs it | Where |
|---|---|---|
| PAN and TAN | Every entity (TAN once you deduct tax at source) | Issued with SPICe+ for companies; Income Tax portal for others |
| GST | Turnover above the threshold, or certain kinds of supply regardless of turnover | gst.gov.in |
| Udyam (MSME) | Optional; useful for any micro, small or medium enterprise | udyamregistration.gov.in |
| Shop and establishment | Most premises with staff, under state law | State labour department |
| Professional tax | Employers and businesses in states that levy it | State tax department |
| EPF | Establishments with 20 or more employees | EPFO |
| ESI | Establishments with 10 or more employees | ESIC |
| Sector licences | Food, import-export, and other regulated activities | FSSAI, DGFT, sector regulators |
PAN and TAN
A company or LLP gets its own PAN; for companies it comes out of SPICe+ automatically. A proprietor uses their personal PAN. You need a TAN as soon as you deduct tax at source, which for most businesses means as soon as you pay rent above the limits, pay contractors or professionals, or run payroll. Companies get the TAN with incorporation; others apply on the Income Tax portal. The Income-tax Act, 2025 has applied from 1 April 2026, and the TDS rules and forms have been restated under it, so use current guidance rather than older articles.
GST, when you need it
GST registration is compulsory once your aggregate turnover crosses the threshold. Under the CBIC’s summary, the threshold is โน40 lakh for suppliers of goods in most states (โน20 lakh in some), and โน20 lakh for services, or โน10 lakh in special category states. Certain businesses must register from the first rupee whatever their turnover: for example, many that sell goods across state lines or sell goods through e-commerce platforms. Some register voluntarily because their business customers want to claim input tax credit.
GST is registered state by state. If you operate from two states, you will usually need two registrations. Once registered, returns are due every period even if there were no sales. If you would like the application made for you, see GST registration support.
Udyam registration
Udyam is the government’s registration for micro, small and medium enterprises. It is free on the official portal, works on self-declaration with an Aadhaar number, and pulls investment and turnover data from PAN and GST records. Since 1 April 2025, a micro enterprise is one with investment up to โน2.5 crore and turnover up to โน10 crore, according to the revised limits. Registration is not compulsory, but it is the gateway to MSME schemes, priority-sector lending and the delayed-payment protections for MSME suppliers. Any structure can register, including a proprietorship.
Shop and establishment registration
Each state has its own Shops and Establishments Act, and each sets its own rule on who must register, how many workers trigger it and whether a simple intimation is enough for very small units. If you have premises and staff, check your state’s labour department portal early. For a company in Delhi, the shops registration can currently be applied for alongside incorporation; check the MCA portal for the latest list of linked registrations.
Professional tax
Professional tax is a state levy, and only some states charge it. Where it applies, the business enrols itself and, once it has staff, registers as an employer to deduct it from salaries. Companies incorporated in Maharashtra, Karnataka and West Bengal can apply for it alongside SPICe+. Check the current list with your adviser, as the linked registrations can change.
EPF and ESI, when you hire
The four labour codes have been in force since 21 November 2025, and the Code on Social Security now carries the provident fund and employees’ state insurance rules. In outline:
- EPF applies to establishments with 20 or more employees. Below that, you can usually join voluntarily.
- ESI applies to establishments with 10 or more employees, now across India rather than only in notified areas, according to the ESIC’s implementation circular. Smaller establishments can opt in.
Register within the time the rules give once you cross the headcount, and count all employees, including those on contract through you. The ESIC and EPFO rules under the Code were still being finalised in detail when this was written, so check the current position on the EPFO and ESIC portals.
Sector licences
Some activities need a licence before you start, not after. The common ones for new businesses:
- Food: any food business, from a home kitchen to a restaurant or distributor, needs FSSAI registration or a licence depending on size, through FoSCoS.
- Import or export: an Import Export Code from the DGFT before your first shipment.
- Regulated activities: lending, insurance broking, healthcare, education, drugs, liquor, telecom and others each have their own regulator and conditions. Some of them also restrict which structure you can use.
Step 4: Bank account and money discipline
Open a current account in the entity’s name as soon as you have the certificate of incorporation or the documents the bank wants. For a company or LLP, every receipt and payment of the business should go through that account from day one.
This is where new founders get into trouble. A company’s money is not the founder’s money. Paying personal expenses from the company account, or business expenses personally without reimbursement records, creates tax and audit problems that are tedious to unwind. Set up bookkeeping in the first month, not at year end.
Step 5: Protect the name and the idea
A company name approved by the MCA, or a trade name used by a proprietorship, is not a trademark. Another business can still register your brand. If the name, logo or product name matters, file a trademark application with IP India early. You can file on a “proposed to be used” basis before you launch, and the filing date gives you priority.
Also think about recognition under Startup India. A company, LLP or registered partnership that meets the DPIIT conditions can apply for recognition, which opens certain tax and procurement benefits.
Step 6: The first year’s compliance calendar
Registration is the start of a routine, not the end. Roughly, the first year looks like this:
- Every month or quarter: GST returns if registered; TDS deposits and returns once you deduct; payroll contributions once PF and ESI apply.
- Company, early months: appoint the first auditor, file the declaration for commencement of business, hold the first board meeting, issue share certificates.
- LLP, yearly: Form 11 by 30 May and Form 8 by 30 October.
- Company, yearly: audit, AGM, financial statements and annual return with the MCA, director KYC.
- Everyone, yearly: the income tax return, and the tax audit if your turnover requires one.
Late filings with the MCA, GST and income tax departments each carry their own late fees and interest. A shared calendar with your accountant is worth setting up in week one.
A sensible order of work
- Decide the structure and the founders’ shares or contributions.
- Pick two or three names and search them on the MCA and trademark registers.
- Fix the registered office and get the owner’s no-objection letter and a fresh utility bill.
- Get digital signature certificates for every director or partner.
- Incorporate or register the entity.
- Open the bank account.
- Register for GST if needed, then Udyam, shops and establishment, and professional tax where it applies.
- Before the first hire, set up payroll and check the PF and ESI thresholds.
- Get any sector licence before you trade in that sector.
- File the trademark application.
Frequently asked questions
Can I run the business from home?
Yes. A residential address can be a company’s or LLP’s registered office, with a recent utility bill and the owner’s no-objection letter if you are not the owner. Your state’s shops law and any housing society rules are separate questions.
Do I need GST registration before my first sale?
Only if your kind of supply requires registration regardless of turnover, or you expect to cross the threshold. Otherwise you can register when you approach it, though many businesses register early because their customers ask for a GSTIN.
Is there a single government window for all of this?
Partly. For companies, SPICe+ bundles PAN, TAN and several other registrations with incorporation. GST, Udyam, labour and sector licences are still applied for on their own portals.
Complianto (complianto.in), operated by Mentorcorp Private Limited, is a private consultancy and is not affiliated with any government body. We do not issue official documents. We charge a professional fee for application assistance and advisory services. Applicants can apply directly to the government without our fees via the official portals: MCA (mca.gov.in), Income Tax (incometax.gov.in), GST (gst.gov.in), MSME (udyamregistration.gov.in), FSSAI (foscos.fssai.gov.in), Startup India (startupindia.gov.in), and IP India (ipindia.gov.in).
This article is general information, not legal or tax advice.
