Essential Legal and Regulatory Registrations Every Indian Business Must Have: A Top 10 Guide
20 Oct 2023
Essential Legal and Regulatory Registrations Every Indian Business Must Have: A Top 10 Guide
Running a business in India involves dealing with a lot of rules and paperwork. To make sure your business runs smoothly and follows the law, you need to register for certain things. These registrations are like the building blocks of a successful business.
In this article, we'll talk about ten of the most important registrations every business in India, whether it's a company, a partnership, or something else, should have. These registrations cover things like taxes and employee benefits. Let's explore these essential registrations that are key to your business's success.
1. PAN (Permanent Account Number) and TAN (Tax Deduction Account Number):
Every business entity in India, regardless of its type, be it a Company, LLP, Partnership Firm must acquire a PAN and TAN. These ten-digit unique alphanumeric numbers, issued by the Income Tax Department, are essential for tax-related transactions. TAN is mandatory for those who deduct or collect tax at the source. While AADHAR can now be used for filing IT Returns, PAN is still required for payments exceeding Rs 50,000.
2. Trade License / Shops and Establishment License:
To set up a shop or commercial establishment, you need a Trade License and Shops and Establishment license. These licenses are obtained from the municipal corporation or panchayat, depending on your business's location. A list of trades mandating a trade license is usually issued by the municipality. If your establishment has more than 10 employees, you also need a Shops and Establishment license from the labor commissioner.
3. GSTIN Registration:
In accordance with the GST regime, businesses must register for GST and obtain a unique Goods and Services Tax Identification Number (GSTIN), with an annual turnover threshold of Rs. 20 lakhs (Rs. 10 lakhs for North Eastern states & Special Category States).
4. Company / LLP / Start-up/ Partnership Firm Registration:
For any business entity starting operations in India as a Company or Limited Liability Partnership, registration under the Ministry of Corporate Affairs is mandatory. Partnership firms can register their partnership deeds under the Indian Partnership Act 1932, and Start-ups can opt for registration under the Start-up India Scheme to access government benefits.
5. EPF Registration:
Employers with 20 or more employees (10 in some states) must register for Employees Provident Fund (EPF). Employees earning less than Rs 15,000 monthly are covered under this scheme.
6. ESI Registration:
Employers with more than 10 employees, excluding factories, in ESI notified areas must obtain Employees State Insurance Registration. This scheme covers employees earning less than Rs 21,000 per month. Establishments exempt from ESI registration should obtain an Exemption Certificate.
7. Professional Tax Registration:
Professional Tax, levied on individual salaries by local municipalities, varies by state. Most states issue a registration certificate or an enrollment number for tax payment.
8. Contract Labour Registration:
If a business employs more than 10 contract laborers, both the Principal Employer and Contractor must obtain a Contract Labour license from the Labor Department of the concerned State.
9. Pollution Consent:
Businesses falling under Red, Green, and Orange categories of industries, as notified by the Pollution Control Board, require Pollution Consent. There are two types: Consent to Establish (before construction/setup) and Consent to Operate (before operations begin). Renewal terms are specified in the consent.
10. Motor Vehicle Registration:
Businesses wishing to own vehicles in their name must obtain a Registration Certificate, Pollution Certificate (except for vehicles under a year old), Fitness Certificate, and pay Road Tax.
In conclusion, these ten essential registrations are the backbone of any successful business in India. They ensure you are on the right side of the law, help you manage your taxes, and take care of your employees. While the paperwork and legalities might seem daunting, they are the building blocks for a thriving enterprise.
By taking the time to secure these registrations, you not only protect your business but also set a strong foundation for growth and prosperity. Remember, staying compliant with the legal and regulatory requirements isn't just about following rules; it's about creating a secure and sustainable future for your business. So, don't hesitate to get started on these registrations and invest in the long-term success of your Indian business.