How to Get a Business Licence: Types, Required Documents, Costs and Procedure in India

Getting a business licence is the most important first step for any entrepreneur in India. A business licence is an official document from the government that permits you to operate your company legally. Whether you run a small home-based business or a large corporation, this licence is mandatory. It ensures you comply with all local, municipal and state laws, protecting your business and building trust with customers.

What is a Business Licence?

A business licence is an official permit issued by a government or municipal authority. It grants you the legal right to start and run a specific type of business in a particular location. Its main purpose is to ensure that your company complies with all relevant laws, pays its taxes, and meets public safety standards.

Types of Business Licences in India

The type of business license you need depends entirely on your industry, location, and the scale of your operations. Here are some of the most common licences and registrations required for businesses in India. [1]

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• Shop and Establishment Licence: Essential for almost any business with physical premises (shops, offices, restaurants, etc.). Issued by the state's Department of Labour, it regulates working hours and employee records.
• Trade Licence: Issued by the local municipality, it ensures your business (like restaurants, hotels, or manufacturing units) is not a public nuisance or health hazard.
• FSSAI Licence: Mandatory for any business involved in food manufacturing, storing, distributing, or selling to ensure food safety standards.
• Factory Licence: Required for businesses classified as a 'factory' under the Factories Act, 1948 (typically, premises with a certain number of workers). It focuses on worker safety and welfare.
• Udyam/MSME Registration: A crucial registration (not a license) for Micro, Small, and Medium Enterprises. It provides eligibility for government benefits, subsidies, and priority lending.
• Import-Export Code (IEC): A 10-digit mandatory code issued by the DGFT for businesses that plan to import or export goods.
• GST Registration: Compulsory tax registration for most businesses whose annual turnover exceeds the specified threshold (e.g., ₹40 lakhs for goods). It allows the collection of taxes and claiming of input tax credits.

Documents Required For a Business Licence

To begin your business license registration, you will need to gather several key documents. The specific list will vary depending on the licence, but these are the most common requirements.

• Identity Proof of the Owner/Partners/Directors:
  • PAN Card
  • Aadhar Card
  • Voter ID or Passport
• Address Proof of the Owner/Partners/Directors:
  • Aadhar Card
  • Latest utility bill (electricity or water)
  • Bank statement
• Proof of Business Premises:
  • If Rented: A copy of the rent agreement and a No Objection Certificate (NOC) from the property owner.
  • If Owned: Property tax receipt, sale deed, or utility bill in the owner's name.
• Business Constitution Documents:
  • For a Company: Certificate of Incorporation, Memorandum of Association (MOA), and Articles of Association (AOA).
  • For a Partnership Firm: The registered Partnership Deed.
• Other Documents:
  • A cancelled cheque or bank statement for the business's current account.
  • Photographs of the business premises (inside and outside).
  • A site plan or layout of the premises (often required for factory or food licences).

How to Get a Business Licence?

The business license application procedure has become much simpler with digitization. Most registrations can be completed through an online business license application, though offline methods still exist. [1]

Here is the general step-by-step process:

• Step 1: Identify Requirements: Define your business activity and structure (e.g., sole proprietorship, food service) to list all necessary licences. 
• Step 2: Collect Documents: Prepare clear, scanned copies of all required documents.
• Step 3: Choose Your Application Method (Online vs. Offline)
  • Online Method: Visit the official government portal for the specific licence (e.g., municipal website for Trade Licence, FSSAI portal for food licence). This is the recommended method.
  • Offline Method: Submit a physical form and photocopies at the relevant local government office.
• Step 4: Complete & Pay: Fill out the application accurately with all business details (name, address, activity, etc.), upload your documents (online method), and pay the calculated government fee.
• Step 5: Inspection (If Required): Licences like Trade, Factory, or FSSAI may require a physical inspection by a government official to verify the premises meet safety and hygiene norms.
• Step 6: Approval & Receipt: After a thorough review, if approved, you can download the digital certificate from the portal or collect the physical licence from the office.

How Much Does a Business Licence Cost?

There is no fixed answer to how much does a business licence costs. The business license cost depends on several factors: [1]

• The type of business license you are applying for.
• The state and city where your business is located.
• The scale of your business (e.g., turnover, number of employees, size of the premises).
• The validity period you choose (for licences like FSSAI).

A simple registration like Udyam is free, while a basic Shop and Establishment licence might cost a few hundred to a few thousand rupees. A Factory Licence or a high-level FSSAI licence will be more expensive.

Validity and Renewal of Business Licence

A business licence is not a one-time approval; it must be renewed to remain legally valid. The validity and renewal rules change for each licence. [1]

• Most Trade Licences and Shop and Establishment Licences are valid for one financial year (from April 1st to March 31st) and must be renewed annually.
• FSSAI licences can be issued for 1 to 5 years, depending on the fee paid.
• The Import Export Code (IEC) is generally valid for the lifetime of the business and does not require renewal.
• It is crucial to apply for renewal before the expiry date to avoid heavy penalties and potential business closure.

How NoBroker Can Help You Get a Business Licence

Figuring out how to get a business licence and navigating the various government portals can be overwhelming. NoBroker's legal service experts can simplify this entire process for you. We provide end-to-end support, from identifying the exact licences your business needs to preparing all documentation and managing the complete online business license application on your behalf. Let us handle the legal formalities so you can focus on what you do best—running your business.

Frequently Asked Questions

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