5 Laws You Must Be Familiar With if You’re Conducting Business in India

If you’re running a business anywhere in the world, in any country, then you need to be up-to-date and in the know about what the laws are in those countries that will allow you to operate, and setting up and running a business in India is no exception.

It doesn’t matter what kind of business you’re running, if you’re operating within the Indian geographical boundaries, then some rules apply to you. To help you understand what some of these rules are, today we’re going to be focusing on five of the most important that will help you get started.

  1. Make Sure Your Business is Licensed

It’s imperative that the business you’re running in India is licensed and is operating legally, but what licenses you have will massively depend on the type of business you’re working as. This means you need to do your research and figure out what your business classes as, or get expert guidance if you’re not sure because you don’t want to get caught out and fined, especially if you’re a start-up.

Some of the common licenses you can expect to get include the Shop and Establishment Act required for all brick and mortar businesses. You may also need food adulteration, health trade, environmental clearance licenses, and so on.

2. You Need to Pay GST

GST stands for Goods and Services Tax, and if you’re operating in India, then this is a tax you’re going to need to pay. This is known as an indirect tax that applies to goods and services (unsurprisingly) and was created to replace the rather outdated excise tax, VAT, and service tax models. Now it all comes under the GST bracket.

The tax has been around since 2017 and has been relatively successful thus far. As a business, just like you would with the older VAT or excise models, you need to work out what you’re paying, how much your business owes, and make sure you’re paying it by the deadline. You can use an online GST calculator to work out how much your business needs to pay.

3. The Business Financing Laws

There are business financing laws you need to know since there are three common types of funding that could help you set up and grow your business. There’s equity financing (having stocks and shares), debt financing (taking out a loan), and self-financing.

Each form of financing has various laws and regulations attached to it that you’ll need to be aware of and keep records of. For example, a bank loan will need loan sanction papers, sanctions letters, and a loan agreement paper, as well as any proof of collateral that was needed to secure the loan; all kept as organized evidence.

4. Labour and Employment Laws

If you’re growing your business and plan to have people working for you, then you need to make sure you’re looking into the current labor and employment laws of India, including how you can manage employee privacy, manage disabilities, and any and all discrimination acts and regulations that need to be followed.

5. Learn About SEBI

The SEBI stands for the “Securities and Exchange Board of India” and helps your business get listed as being an official operation. However, the SEBI regulations and requirements can change from time to time, so you need to stay connected and informed about what’s going on, especially if you’re a start-up company. This can be a very helpful organization if you know how to use it properly.


As you can see, there are some important rules and regulations out there that you need to be aware of as a business operating in India. Of course, these laws can change yearly, so get informed and educated before you set out to make any significant business decisions.


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