To set up a business in India, validate the idea, choose a legal structure, register the entity, open a bank account, register for GST and other licences, set up accounting and payroll, and calendar your compliance dates. Registration is only the beginning.
Key takeaways
- Choose the structure before anything else; it drives tax, liability and funding.
- Open a current account and keep business money separate from day one.
- Register only for what applies: GST, Udyam, shop licence, PF or ESI.
- Put annual filings in a calendar the day you incorporate.
01The ten steps
- Validate the idea and estimate startup cost and cash flow.
- Choose the structure: proprietorship, LLP or company.
- Register the entity with the RoC, or start as a proprietor.
- Get PAN and TAN for the entity.
- Open a current account in the business name.
- Register for GST if required or beneficial.
- Obtain Udyam registration for MSME benefits where eligible.
- Get local licences such as shop and establishment or trade licence.
- Set up accounting, invoicing and payroll.
- Create a compliance calendar for taxes and filings.
02What applies to you
| Registration | When you need it |
|---|---|
| GST | Turnover above the threshold, interstate supply or e-commerce selling |
| Udyam | If you are an eligible micro, small or medium enterprise |
| PF and ESI | Once employee numbers and wages cross the limits |
| Shop and establishment | For most commercial premises, rules vary by state |
| IEC | For import and export |
03Common first-year pitfalls
- Mixing personal and business transactions
- Late GST or TDS filings
- No agreement between co-founders
- Ignoring the annual company filings
Keep a simple monthly routine: reconcile the bank, file GST and TDS, and review cash flow. Small habits prevent big penalties.
Frequently asked questions
What is the first thing to do when starting a business in India?
Decide the structure and confirm costs and funding. Registration comes after that decision.
Do I need GST registration from day one?
Only if your turnover or activity requires it. Some businesses register early to claim input tax credit.
How much money do I need to start?
It depends on the business. Plan registration costs, working capital for at least three months and compliance costs.
Can I start as a proprietor and convert later?
Yes, many founders do. Plan the transition to avoid tax surprises.
This guide is general information based on Indian law as understood in October 2026. Rules, fees and due dates change, so confirm current requirements with a qualified Chartered Accountant before you act. It is not professional advice.