Clothing business is a service that involves designing, manufacturing, or selling various types of garments, accessories, or textiles. Clothing business requires creativity, skill, and equipment to ensure the quality and appeal of the products or services. However, before starting a clothing business in Hyderabad, you need to obtain various registrations and licenses from different authorities to ensure compliance with the legal and regulatory requirements. In this article, we will discuss the main legal requirements for starting a clothing business in Hyderabad.

Company Registration from Ministry of Corporate Affairs (MCA)

Company registration is the first and foremost step to start a clothing business in Hyderabad. Company registration involves registering your business entity with the Ministry of Corporate Affairs (MCA), the central authority that regulates and governs the corporate affairs in India. Company registration provides legal recognition, protection, and benefits to your business. There are various types of company structures that you can choose from, such as:

• Sole Proprietorship: A sole proprietorship is the simplest and most common form of business entity, where you are the sole owner and operator of your business. A sole proprietorship does not require any formal registration, but you may need to obtain a trade license, GST registration, and other licenses depending on your business activity and turnover.
• Partnership Firm: A partnership firm is a business entity where two or more persons agree to share the profits and losses of a common business. A partnership firm can be registered under the Indian Partnership Act, 1932, or the Limited Liability Partnership Act, 2008. A partnership firm registration helps establish the rights, duties, and liabilities of the partners and ensures smooth operations.
• Private Limited Company: A private limited company is a business entity where the ownership is limited to a maximum of 200 shareholders and the shares are not publicly traded. A private limited company is the most preferred choice for clothing businesses, as it offers limited liability, perpetual succession, easy transferability, and access to funding. A private limited company registration can be done online through the MCA portal¹, by filing the required forms and documents.
• One Person Company: A one person company is a business entity where there is only one person as the owner and director of the company. A one person company is a hybrid of a sole proprietorship and a private limited company, as it offers limited liability, perpetual succession, and easy compliance. A one person company registration can also be done online through the MCA portal¹, by filing the required forms and documents.

GST Registration from Goods and Services Tax Network (GSTN)

GST registration is another essential requirement to start a clothing business in Hyderabad. GST registration involves registering your business entity with the Goods and Services Tax Network (GSTN), the online portal that administers and facilitates the GST system in India. GST registration enables you to collect and remit GST to the government and ensures compliance with the tax regulations. GST is a comprehensive indirect tax levied on the supply of goods and services in India. GST registration is mandatory for clothing businesses with annual turnover more than ₹20 lakhs (₹10 lakhs for special category states). GST registration can be done online through the GST portal², by filing the required forms and documents.

Trade License from Greater Hyderabad Municipal Corporation (GHMC)

Trade license is a permission granted by the municipal corporation to carry out a specific trade or business activity at a particular location. It is also known as a clothing license for clothing businesses. Any clothing business operator must obtain a trade license from the Greater Hyderabad Municipal Corporation (GHMC) before starting the clothing business. The trade license is valid for one year and must be renewed annually. The trade license ensures that the clothing business follows the local regulations, health and safety standards, and other statutory requirements. The trade license can be applied online through the GHMC portal³, by filling the required details and paying the requisite fee.

Shops and Establishments License from Labour Department

Shops and establishments license is a permission granted by the labour department to regulate the working conditions and welfare of the employees and workers in the shops and establishments. Shops and establishments license is required for clothing businesses that operate any shop, showroom, or outlet where the products or services are sold or displayed. Shops and establishments license is granted under the Telangana Shops and Establishments Act, 1988, and the Telangana Shops and Establishments Rules, 1990. Shops and establishments license is subject to various conditions and restrictions such as the working hours, holidays, leaves, wages, health, safety, etc. Shops and establishments license is valid for five years and must be renewed thereafter. Shops and establishments license ensures that the clothing business complies with the norms and standards prescribed by the act and the rules for the welfare and protection of the employees and workers⁴.

Other Registrations and Licenses

Depending on the nature and scope of your clothing business, you may also need to obtain other registrations and licenses from various authorities, such as:

• Trademark Registration: If your clothing business creates or uses any distinctive mark, name, logo, or symbol to identify your products or services, you may opt for the trademark registration. Trademark registration protects your mark from infringement, misuse, or imitation, and gives you exclusive rights to use, sell, or license your mark. Trademark registration can be done online or offline through the respective trademark authorities, by filling the required forms and documents.
• Import-Export License: If your clothing business is involved in the import or export of any goods or services, you may opt for the import-export license. Import-export license is a permission granted by the Directorate General of Foreign Trade (DGFT) to engage in the international trade of goods or services. Import-export license involves obtaining an Importer-Exporter Code (IEC) for your clothing business. Import-export license enables you to avail various benefits and incentives under the foreign trade policy. Import-export license can be done online through the DGFT portal, by filling the required forms and documents.
• FSSAI License: If your clothing business also sells or serves any food or beverage items, you may opt for the FSSAI license. FSSAI license is a permission granted by the Food Safety and Standards Authority of India (FSSAI) to ensure the quality and safety of the food or beverage items. FSSAI license is mandatory for any business that deals with food or beverage items. FSSAI license can be done online through the FSSAI portal, by filling the required forms and documents.
• Fire Safety Certificate: If your clothing business involves any fire or electrical hazards, you may opt for the fire safety certificate. Fire safety certificate is a certificate issued by the fire department to certify that the premises of the clothing business are safe from fire hazards and have adequate fire-fighting equipment and measures. Fire safety certificate is mandatory for clothing businesses that involve cooking, heating, or storing inflammable materials. Fire safety certificate is issued by the fire department after inspecting the premises and verifying the fire safety standards. Fire safety certificate is valid for three years and must be renewed thereafter. Fire safety certificate ensures that the clothing business minimizes the risk of fire accidents and protects the lives and property of the clients and the workers.