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Preface: This post was originally published in 2022 and has been updated on April 09, 2025, to provide you with the most current and accurate information.
As of January 15, 2025, the Department for Promotion of Industry and Internal Trade (DPIIT) recognizes more than 1.59 lakh startups. This makes India the third-largest startup economy in the entire world. Over 100 unicorns drive the vibrant startup ecosystem, which continues to refine innovation as well as entrepreneurship on a global level. This transformation has been led by major hubs across the country like Delhi-NCR, Bangalore, Mumbai and Hyderabad.
By establishing a startup, you can benefit from flexible innovation opportunities, and the potential for significant financial growth. If you are planning to register a startup business in India, you will have to fulfill several legal requirements to ensure you can run smooth and interrupted business operations.
In this article, we shall explain all the legal requirements surrounding startup business registration in the context of India.
A Startup Business is one that is registered under the Startup India Scheme. It is officially recognized by the Department for Promotion of Industry and Internal Trade (DPIIT).
There are many perks of registering a startup under the Startup India scheme. One perk is that the DPIIT-recognized startups enjoy tax exemption for three consecutive financial years out of their first ten years since incorporation. Another perk is that they can easily wind up their business within 90 days from the application date, if required.
Startup India provides 50% rebate for filing trademark applications, and 80% rebate for filing patent applications. There are, of course, many many other perks which make startup business registration quite tempting. We recommend you to connect with Registrationwala’s team to know more about the perks!
There are many legal requirements to register a start up in India. You need to file various documents, obtain several licenses and registration certificates. In this section, we’ll explain all the requirements one-by-one:
To register a startup business, you require various documents for showcasing identity and address proof, registered office address details, certain business structure-specific documents, etc. Here is a list of all the documents you need to register a startup:
You need the following documents for identity and address proof:
PAN Card of the founders.
Aadhaar Card / Passport / Voter ID / Driving License
Passport-sized photographs of all the founders
You must submit the following documents for registered office address:
Rental agreement (in case of rented premises)
Ownership deed (in case you own the premises)
No Objection Certificate (NOC) from the property owner
Utility bill (electricity/water/gas) not older than 2 months
The following business structure-specific documents are necessary for registering your startup business:
Partnership Deed (for partnership firms under Indian Partnership Act 1932)
LLP Agreement (for LLPs under Limited Liability Partnership Act 2008)
Memorandum of Association (MoA) and Articles of Association (AoA) for Pvt Ltd or OPC under Companies Act 2013
You will require DSC for filing company incorporation documents online on the MCA portal
DIN is a mandatory requirement for individuals who will be directors in the company.
For Startup Registration, you require certain licenses and certificates to ensure compliance with all the legal requirements. In case of non-compliance with the mandatory requirements, your business may attract penalties. The licenses and certificates required for startup registration are as follows:
Certificate of Incorporation is a certificate that the Registrar of Companies (RoC) issues to a newly registered company. It implies that the business is legally registered with the Ministry of Corporate Affairs. To secure this certificate, you must file a company registration application using the prescribed form via the official MCA portal.
Getting in touch with Company Registration consultants can be quite beneficial for you, especially if you have a hectic schedule and find the process of application filing a bit complicated.
GST Registration is one of the most important requirements for not just startups, but also other businesses in India. A GST certificate must be secured by every business in India if its annual turnover exceeds Rs. 40 Lakhs (for goods) and Rs. 20 lakhs (for services).
If a business required to register for GST fails to do so, it is liable to pay a penalty of Rs. 10,000 or 10% of the tax due, whichever is higher. Make sure to fulfill this legal requirement for your startup business in a timely manner to avoid penalties and legal repercussions.
The Department of Promotion of Industry and Internal Trade (DPIIT Ministry of Commerce and Industry, issues a DPIIT Recognition certificate to Indian startups under the Startup India initiative. This certification is a legal document that recognizes eligible startups in the country, and grants them access to various benefits such as funding opportunities, tax exemptions and easier compliance requirements.
To establish your business entity as a startup under Startup India scheme, DPIIT certificate of recognition is necessary.
If you want to run a startup that deals in manufacturing, selling, distributing, importing, exporting, transporting, storing or processing food products, then you must secure a FSSAI license. This license is issued by the Food Safety and Standards Authority of India. There are three types of FSSAI licenses: FSSAI Basic Registration, FSSAI State License, and FSSAI Central License.
FSSAI Basic Registration is required for small businesses or startups with an annual turnover of up to Rs. 12 lakhs. FSSAI State License is necessary for medium-sized businesses with an annual turnover between Rs. 12 lakhs and Rs. 20 crores, operating within a single state.
Lastly, FSSAI Central License is required for large businesses with an annual turnover above Rs. 20 crores, or for those involved in import/export, operating in multiple states, or handling large-scale food operations. As a legal requirement, all Food Business Operators, including startups, must display the 14-digit FSSAI registration or license number on their food products and packaging.
Import Export Code (IEC) is a unique 10-digit alpha numeric code that the Directorate General of Foreign Trade (DGFT) issues to the Indian importers and exporters. All the businesses wanting to engage in export or import activities must mandatorily obtain the IEC code.
Therefore, if you want to run a startup business engaged in import or export of goods, you must secure IEC beforehand. You can apply for the Importer Exporter online by filing an application via the official DGFT portal.
Starting a new business involves fulfilling several legal requirements, including preparing the necessary documentation and securing various licenses and certifications. While the term "startup" is commonly used to describe any newly established innovative business, not all such businesses are eligible for benefits under the Startup India initiative. To qualify for these benefits, a business must register under the Startup India initiative and obtain a recognition certificate from the Department for Promotion of Industry and Internal Trade (DPIIT). Once recognized, the startup can access various advantages, including tax exemptions and easier funding options.
If you want to register a startup, connect with us for assistance. We will help you to fulfill all the legal formalities!
Q1. What is the Startup India initiative?
A. Startup India initiative is a flagship government scheme that aims to support startup businesses by offering tax exemptions, funding opportunities, mentorship, and easy regulatory procedures.
Q2. Which Department issues Certificate of Recognition to startups?
A. Department for Promotion of Industry and Internal Trade (DPIIT) issues a Certificate of Recognition to all the eligible startups.
Q3. Do startups require FSSAI license?
A. Yes, startups require FSSAI license if they are engaged in manufacturing, selling, distributing, importing, exporting, transporting, storing or processing food products.
Q4. Which Ministry runs the Start-Up India initiative?
A. The Ministry of Commerce and Industry runs the Start-Up India initiative.
Q5. Is a sole proprietorship eligible for the Startup India scheme?
A. No, a sole proprietorship is not eligible for the Startup India scheme.
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