Running a business in India requires adherence to multiple legal and regulatory requirements, especially for Micro, Small, and Medium Enterprises (MSMEs). Non-compliance can result in fines, legal disputes, and operational challenges.
This post provides a step-by-step checklist for MSMEs, covering licenses, registrations, and filings necessary to operate legally and grow your business confidently.
Table of Contents
Why Compliance Matters?
Legal Protection: Protects you from penalties and legal disputes.
Business Credibility: Clients, suppliers, and investors trust compliant businesses.
Access to Government Benefits: Many schemes, grants, and loans require compliance.
Tax Efficiency: Proper filings prevent tax notices or penalties.
Treat compliance as a checklist project. Schedule a quarterly review to ensure all documents, registrations, and filings are up to date.
Mandatory Registrations for MSMEs
Udyam Registration (MSME Registration)
Provides recognition under the MSME Act.
Required to access government schemes, subsidies, and credit benefits.
Documents needed: PAN, Aadhaar, business address proof.
Tip: Udyam registration is free, and no documents need to be uploaded physically.
Business Structure Registration
Depending on your business type:
Proprietorship: Optional registration; recommended for credibility.
Partnership: Partnership deed; optionally register with Registrar of Firms.
LLP / Pvt Ltd: Mandatory MCA registration.
Refer Post 4 & 5 for registration and structure selection.
GST Registration
Mandatory if turnover exceeds ₹20 lakh (₹10 lakh for NE/North East states) or if dealing in interstate supply.
Helps in legal invoicing, claiming input tax credit, and smooth trade operations.
Tip: File returns regularly to avoid fines and maintain compliance records digitally.
Shops & Establishment License
Required if you have a physical shop, office, or commercial establishment.
Issued by the local municipal corporation or state authority.
Covers employee working hours, leave, and safety regulations.
Professional Tax Registration (if applicable)
Certain states in India require businesses to deduct and pay professional tax for employees.
Check your state’s official tax portal.
Import Export Code (IEC) – if applicable
Required if you plan to import or export goods.
Apply online via DGFT
Industry-Specific Licenses
Labour & Employee Compliance
Employee Provident Fund (EPF): Mandatory if you have 20+ employees.
Employee State Insurance (ESI): Mandatory for 10+ employees (in some states).
Minimum Wages & Employment Laws: Comply with state labour regulations.
Maintain salary registers, attendance, and statutory filings digitally.
Intellectual Property & Trademarks
Trademark Registration: Protect your brand name, logo, or tagline. Portal: IP India
Optional but highly recommended for branding and long-term value.
Copyrights or patents if your business produces unique products, software, or creative content.
Digital Compliance & Record-Keeping
Maintain digital copies of all registrations, certificates, and licenses.
Use cloud storage for invoices, contracts, and bank statements.
Enables faster audits, smoother GST filing, and better internal tracking.
Tax Compliance Checklist
Income Tax Registration (PAN of entity): File taxes timely.
TDS (Tax Deducted at Source): Deduct and deposit if applicable.
GST Compliance: File returns monthly/quarterly.
Maintain proper accounting records: Supports all tax filings.
Compliance Calendar
Common Compliance Mistakes to Avoid
Mixing personal and business accounts.
Delaying GST filings or EPF contributions.
Ignoring renewal dates for industry-specific licenses.
Failing to maintain proper accounting and statutory records.
Insights
Create a compliance checklist table: Columns – License/Registration, Date Obtained, Expiry Date, Renewal Status. Review quarterly.
Automate reminders for renewals using calendar alerts or software to avoid missed deadlines.
Now that your MSME compliance is in place, the next step is tax-specific compliance and understanding GST.
Read: GST Registration and Filing Basics
(A detailed, step-by-step guide to GST registration, filing returns, and common pitfalls to avoid.)