How to Start a Business in India — Complete Registration Guide
Table of Contents
Choosing the Right Entity Type
I helped 500+ new businesses register in Delhi. The biggest mistake first-timers make is choosing the wrong entity type. This decision affects your tax liability, compliance burden, personal liability, and ability to raise funds. Choose wisely.
| Entity | Setup Cost | Compliance | Liability | Tax Rate |
|---|---|---|---|---|
| Sole Proprietorship | ₹0-2,000 | Minimal | Unlimited personal | As per slab |
| Partnership | ₹3,000-5,000 | Moderate | Unlimited personal | As per slab |
| LLP | ₹8,000-15,000 | Moderate | Limited | As per slab |
| Private Limited | ₹15,000-25,000 | High | Limited | 25.17% (30%+cess) |
Business Registration Process
Sole Proprietorship: No formal registration needed. Just get a GST registration or MSME/Udyam registration. Open a current account in your name or business name.
Partnership: Draft partnership deed on stamp paper, register with Registrar of Firms (optional but recommended), get PAN in firm name.
LLP: Get DSC and DPIN for partners, reserve name via RUN-LLP, file incorporation form FiLLiP with MCA. Gets incorporated in 7-10 days.
Private Limited: Get DSC and DIN for directors, reserve name via SPICe+, file incorporation forms with MCA. Gets incorporated in 10-15 days.
GST Registration
After business registration, GST is your next step. Apply within 30 days of starting business if you expect to cross the threshold. Many Delhi businesses register voluntarily to get ITC benefits and appear more professional.
Required Licenses & Registrations
- MSME/Udyam Registration: Free, online, instant -- do this first
- Shop & Establishment License: From local municipal corporation
- FSSAI License: If dealing in food products
- Trade License: From local body (MCD in Delhi)
- Professional Tax: Applicable in some states (not Delhi)
- Import/Export Code (IEC): If planning international trade
Business Bank Account
Open a current account in the business name. You will need:
- Business registration certificate (Pvt Ltd/LLP/Partnership)
- PAN card of business
- Address proof of business
- Identity and address proof of proprietors/partners/directors
- GST registration certificate (if applicable)
Week 1: Udyam registration (free, online)
Week 2: GST registration (free, 5 days processing)
Week 3: Shop & Establishment license from MCD
Week 4: Current account opening (with GST certificate)
Total cost: ₹5,000 (professional fees + license)
Total time: 4 weeks from decision to first sale
Common Startup Mistakes
- Choosing proprietorship for a scalable business -- hard to raise funds
- Not registering for GST -- loses ITC and business credibility
- Mixing personal and business finances -- accounting nightmare
- Not getting proper licenses -- MCD can seal your shop
- Starting without a compliance plan -- penalties pile up quickly