Starting a business shop, home business or service
Most small businesses start as a proprietorship with a PAN, a bank account and a free Udyam registration. Add GST, a shop licence or FSSAI only when your business needs them.
Time: Proprietorship: nothing to file; LLP or company: a few days online
A sole proprietorship needs no separate registration and runs on your own PAN, which suits most shops and home businesses. A partnership firm needs a partnership deed and is registered with the state, while an LLP or a private limited company is registered online with the Ministry of Corporate Affairs and has more yearly filings. Pick the simplest form that fits your risk and plans; you can convert later.
A proprietor uses their own PAN; a firm, LLP or company gets its own PAN. Open a current account (or a separate savings account for a very small business) so business money does not mix with household money. Banks usually ask for proof of the business, such as the Udyam certificate, GST certificate or shop licence, so do the next step first if the bank asks.
Register on the Udyam portal with the owner’s Aadhaar and the business PAN; no documents are uploaded and the certificate is issued online. Udyam helps with bank loans, government schemes and MSME benefits. It is free and never needs renewal, so do not pay agents or lookalike websites.
When: Before your turnover crosses the limit, or before selling to other states
Time: About an hour online; certificate in a few working days
Register for GST when your yearly turnover crosses ₹40 lakh for goods (₹20 lakh in Arunachal Pradesh, Meghalaya, Puducherry, Sikkim, Telangana and Uttarakhand) or ₹20 lakh for services. In Manipur, Mizoram, Nagaland and Tripura the limit is ₹10 lakh for both. Selling goods to other states or through most e-commerce sites needs registration from the start. Small sellers can choose the composition scheme (turnover up to ₹1.5 crore for goods, ₹75 lakh in some special category states, and ₹50 lakh for services) for simpler returns, but they cannot claim input tax credit.
Shop and establishment registration and trade licence
When: Usually within 30 days of opening; check your state
Time: One online form; a few days to a few weeks
Most states require a shop or office to register under their Shops and Establishments law, usually online on the state labour department portal, and the rules differ by state and by number of workers. Many municipalities also need a trade licence for shops, eateries and workshops. Check your state labour portal and your municipal corporation’s website for the exact form and fee.
Anyone who makes, stores or sells food, including a home kitchen or tiffin service, needs FSSAI registration or a licence through the FoSCoS portal. From 1 April 2026, businesses with turnover up to ₹1.5 crore need only a registration, which is instant and no longer needs renewal; state licences cover turnover up to ₹50 crore. Street food vendors registered with their municipal corporation or town vending committee are treated as registered.
When: Soon after starting, if your state levies it
Time: One online registration
If it applies: Only in states that levy professional tax
Some states, such as Maharashtra, Karnataka, West Bengal and Tamil Nadu, charge a small yearly professional tax on businesses and professionals, and on salaries you pay. Registration and payment are on the state tax department’s portal. Check your state’s rules, because many states do not levy it at all.
When: When you have a simple project plan and quotations
Time: A few weeks for bank appraisal
If it applies: Only if you need a loan
PM Mudra gives collateral-free loans through banks: Shishu up to ₹50,000, Kishor up to ₹5 lakh, Tarun up to ₹10 lakh, and Tarun Plus up to ₹20 lakh for those who repaid a Tarun loan. PMEGP gives a 15% to 35% subsidy on a bank loan for a new unit (projects up to ₹50 lakh in manufacturing and ₹20 lakh in services). Stand-Up India gives ₹10 lakh to ₹1 crore to SC, ST and women entrepreneurs for a new enterprise.
Give a proper bill for every sale: a GST invoice if you are registered, or a simple bill of supply if you are not. Put a UPI QR code at the counter linked to your business account, and send written quotations before big orders. If you are GST registered, check a buyer’s or supplier’s GSTIN on the GST portal before you rely on it.
When: Every day for books; monthly or quarterly for GST; yearly for income tax
Time: 10 minutes a day
Write down every sale, purchase, expense and credit given, daily if you can. If you are GST registered, file GST returns monthly or quarterly as you chose, even in a month with no sales, because late returns carry a late fee. File your income tax return every year; the due dates that apply to you depend on GST, tax audit and your state.
Not always. For goods the limit is ₹40 lakh turnover a year in most states ₹20 lakh in Arunachal Pradesh, Meghalaya, Puducherry, Sikkim, Telangana and Uttarakhand, and ₹10 lakh in Manipur, Mizoram, Nagaland and Tripura; for services it is ₹20 lakh, or ₹10 lakh in those four states. Some sellers must register whatever their turnover, for example those selling goods to other states or on most e-commerce sites.
Is Udyam registration free?
Yes. Udyam registration on the official portal is free, paperless and based on self-declaration with Aadhaar and PAN. It never needs renewal. Ignore websites that charge a fee for it.
Do I need an FSSAI licence for a home food business?
Yes, anyone making or selling food needs FSSAI registration or a licence. From 1 April 2026, businesses with turnover up to ₹1.5 crore need only a registration, which is now instant and does not need renewal. Street food vendors registered with their town vending committee are treated as registered.
Which loan can I get to start?
PM Mudra loans go up to ₹50,000 (Shishu), ₹5 lakh (Kishor) and ₹10 lakh (Tarun) without collateral. PMEGP gives a subsidy of 15% to 35% on a bank loan for a new unit, and Stand-Up India gives ₹10 lakh to ₹1 crore to SC, ST and women entrepreneurs for a new enterprise.
Sources
Last checked: . Fees and rules change, and many differ by state. Always confirm on the official site before you pay. This is general information, not legal advice.