Starting a business in India
A proprietorship is a bank account and a GST decision - the company is a SPICe+ filing - and Udyam registration is the free step everyone should take.
Checked against the sources on 2026-08-30
Before anything else
An Indian sole proprietorship has no registration of its own: PAN, a current account, and whatever sectoral licences apply. The two questions that shape the start are GST - registration is compulsory at ₹20 lakh of annual turnover for services (₹40 lakh for goods, lower in special-category states), and effectively earlier for interstate or marketplace sales - and whether clients demand a company.
Two free registrations punch far above their cost: Udyam (the MSME registration, minutes online against Aadhaar) unlocks the delayed-payment protections and scheme access built for small business; and on the tax side, presumptive taxation under 44ADA lets professionals declare 50% of gross receipts as profit with no books to speak of, up to ₹75 lakh - the quiet engine of Indian freelancing.
The legal shell
Proprietorship, LLP, or private limited?
Proprietorship
Solo start.
₹0 beyond incidentals.
No shield; banks want some registration (GST or Udyam serves) to open the current account.
LLP
Partners without the full company apparatus.
MCA filing, modest fees; audit only above thresholds.
Startup investors overwhelmingly prefer the private limited - the LLP is for services firms, not funding stories.
Private limited
Funding, ESOPs, corporate clients.
SPICe+ on the MCA portal, all-in with DSCs commonly ₹7,000-15,000; no minimum capital.
The compliance calendar (board meetings, ROC filings, audit regardless of size) makes a CA/CS retainer a fixed cost from day one.
The sequence
Foundations: PAN, bank, Udyam
PAN exists for most adults; open the current account and file Udyam free at the official portal - beware lookalike paid sites.
Watch out: The Udyam portal is udyamregistration.gov.in. Every other domain selling it is a middleman.
Decide GST deliberately
Where: gst.gov.in
Below the thresholds and selling intra-state, staying out is legal and simpler. Interstate services, exports (for refunds), or marketplace selling push registration regardless of turnover. Once in: monthly/quarterly returns for as long as the registration lives, including nil months.
For a company: SPICe+ end to end
Where: mca.gov.inTakes: Days once DSCs exist
The integrated form issues name, incorporation, DIN, PAN, TAN, EPFO/ESIC and a bank account in one flow. Two directors, one resident in India, digital signatures for each.
Use the presumptive regimes while they fit
44ADA (professionals, 50% presumed profit to ₹75 lakh) and 44AD (businesses, 6-8% to ₹3 crore) trade deductions for near-zero bookkeeping. Advance tax still applies quarterly once liability passes ₹10,000.
What it costs to start
| What | Amount |
|---|---|
| Proprietorship | ₹0 |
| UdyamOfficial portal only. | ₹0 |
| Private limited via SPICe+ | ₹7,000-15,000 all-in |
| CA retainer (company)The real recurring cost. | ₹3,000-10,000/month |
The words on the forms
- PAN / TAN
- The tax identities for the person and for withholding.
- GST / GSTIN
- The unified indirect tax and its registration number.
- Udyam
- The free MSME registration with real protections attached.
- SPICe+
- The MCA’s integrated incorporation filing.
- DSC / DIN
- Digital signatures and director identification numbers.
- 44ADA / 44AD
- The presumptive-profit regimes for professionals and businesses.
- ROC
- The Registrar of Companies the annual filings go to.
The traps
- Registering for GST casually and inheriting the return treadmill forever.
- Paying an agent site for Udyam.
- Interstate or marketplace sales below threshold without registration - the exemption does not cover them.
- A private limited formed for prestige and a compliance calendar nobody budgeted.
Where to check this yourself
- MCASPICe+ and company filings.
- GST portalThresholds and registration.
- UdyamThe one real MSME portal.
This is a map, not legal or tax advice - and an honest one about how it was drawn: the Germany guide was written by a person who walked the route; most other countries were drafted with AI against the official sources and have not yet been walked by someone who did it. Laws change. Every guide carries the date it was last checked and the sources to check it yourself - and if you have been through one of these routes, your corrections are exactly what this handbook wants.