What are the registrations required to start the Business in Karnataka?

In India, we can constitute commercial business in following means:

• Sole Proprietorship – Operating business with one man ownership
• Partnership – Operating business with more than 1 individual. Legally known as partners
• Private and Public Limited Company – Registering business as per Ministry of corporate affairs and governed as per Companies Act 2013
• Limited Liability - Registering business as per Ministry of corporate affairs with limited liability as a main clause.

After considering the constitution, we need to register entity under respective acts i.e. companies Act 2013, partnership Act etc

Apart from entity registration, we need to register under following acts mandatorily.

• Karnataka Shop & Establishment Act: Every commercial establishment within the boundaries of Karnataka need to register under Karnataka Shop & Establishment Act 1961. This license is broadly known as Labour license. Based on the number of employees, entity is liable to pay registration fees.

This registration is a one time application and to be renewed on due basis. Based on nature of business, employees and various aspects license will be allotted either for 1, 3 or 5 years.

• Karnataka Professional Tax Act: Professional tax is broadly of 2 types. Well known as Employer Professional Tax and Employee Professional Tax.

Employer PT returns are liable to file and pay tax on annual basis. Employer is liable to pay Rs 2,500/- as annual professional tax. Due date for filing Annual PT return is 30^th April.

With respective employee professional tax, entity is liable to pay employee returns on monthly basis. Due date for filing monthly returns 20^th of succeeding month.

• Labour Tax – Employee state insurance and Provident fund: Entity having more than 10 employees are liable to register under Employee state insurance. Entity having more than 20 employees are liable to register under Employee provident fund Act.
• Trade License – Every commercial establishment within the boundaries of Bangalore corporation are liable to register under BBMP Trade License. Alternatively as per MSMED regulations, entity registered under MSMED is not mandatorily liable to register under Trade License Act
• Micro small medium enterprise development act – Well known as MSMED.

Commercial establishments can avail the opportunity of registering under MSMED Act. Such establishments can claim the benefits of loans and government grants.

• Food safety and standards authority of India – Popularly known as FSSAI. This license is mandatory for all food related establishments.
• GST – Goods and Service Tax – GST is liable for all entities, whose turnover is more than 20 Laks. Ecommerce establishments are liable to GST irrespective of turnover.

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