Electrical business is a service that involves installing, repairing, or maintaining electrical wiring, equipment, or systems. Electrical business requires technical skills, knowledge, and equipment to ensure the safety and functionality of the electrical work. However, before starting an electrical 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 an electrical business in Hyderabad.

Company Registration from Ministry of Corporate Affairs (MCA)

Company registration is the first and foremost step to start an electrical 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 electrical 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 portal, by filing the required forms and documents¹.
• 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 portal, by filing the required forms and documents¹.

GST Registration from Goods and Services Tax Network (GSTN)

GST registration is another essential requirement to start an electrical 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 electrical businesses with annual turnover more than ₹20 lakhs (₹10 lakhs for special category states). GST registration can be done online through the GST portal, by filing the required forms and documents².

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 an electrical license for electrical businesses. Any electrical business operator must obtain a trade license from the Greater Hyderabad Municipal Corporation (GHMC) before starting the electrical business. The trade license is valid for one year and must be renewed annually. The trade license ensures that the electrical business follows the local regulations, health and safety standards, and other statutory requirements. The trade license can be applied online through the GHMC portal, by filling the required details and paying the requisite fee³.

Electrical Contractor License from Telangana State Electrical Licensing Board

Electrical contractor license is a permission granted by the Telangana State Electrical Licensing Board, which is the authority that regulates and monitors the electrical contractors in the state. Electrical contractor license is required for electrical businesses that provide electrical installation, repair, or maintenance services to any client. Electrical contractor license is granted under the Telangana State Electrical Licensing Regulations, 2018, which prescribe the eligibility criteria, the application procedure, the fees, the validity, and the renewal of the license. Electrical contractor license ensures that the electrical business complies with the norms and standards prescribed by the regulations for the safety and quality of the electrical work⁴.

Other Registrations and Licenses

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

• Income Tax Registration: It is the registration of the electrical business under the income tax act. It involves obtaining a Permanent Account Number (PAN) and a Tax Deduction and Collection Account Number (TAN) for the electrical business. PAN is a unique identification number for the electrical business for the purpose of income tax. TAN is a unique identification number for the electrical business for the purpose of deducting and collecting tax at source from the payments made to the suppliers, employees, etc. Income tax registration is mandatory for every electrical business and can be done online through the income tax portal.
• Professional Tax Registration: It is the registration of the electrical business under the professional tax act of the respective state. Professional tax is a tax levied by the state government on the income earned by the professionals and employees. Professional tax registration is required for electrical businesses that employ any workers or professionals. Professional tax registration can be done online or offline through the professional tax authority of the state.
• Labour Law Registrations: These are the registrations of the electrical business under the various labour laws and authorities. Labour law registrations are required for electrical businesses that employ any workers or staff. The main labour law registrations for electrical business are:
  • EPF Registration: It is the registration of the electrical business under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952. It involves obtaining an EPF code number for the electrical business. EPF is a social security scheme that provides retirement benefits to the employees. EPF registration is mandatory for electrical businesses that employ 20 or more workers. EPF registration can be done online through the EPF portal, by filling the required forms and documents.
  • ESI Registration: It is the registration of the electrical business under the Employees’ State Insurance Act, 1948. It involves obtaining an ESI code number for the electrical business. ESI is a social security scheme that provides medical and cash benefits to the employees and their dependents in case of sickness, injury, or death. ESI registration is mandatory for electrical businesses that employ 10 or more workers. ESI registration can be done online through the ESIC portal, by filling the required forms and documents.
  • EC Registration: It is the registration of the electrical business under the Employee’s Compensation Act, 1923. It involves obtaining an EC policy for the electrical business. EC is a social security scheme that provides compensation to the employees and their dependents in case of injury or death due to an accident arising out of and in the course of employment. EC registration is mandatory for electrical businesses that employ any workers. EC registration can be done online or offline through the EC authority.
• Infrastructure Licenses: These are the licenses to avail the basic infrastructure facilities such as electricity, water, and gas for the electrical business. Infrastructure licenses are required for every electrical business to ensure the smooth and uninterrupted operation of the electrical business. The main infrastructure licenses for electrical business are:
  • Electricity License: It is the license to obtain the electricity connection for the electrical business. Electricity license is granted by the electricity distribution company of the area. Electricity license is subject to the payment of security deposit and monthly electricity charges. Electricity license ensures that the electrical business has adequate and reliable power supply for the electrical work, lighting, cooling, etc.
  • Water License: It is the license to obtain the water connection for the electrical business. Water license is granted by the water supply board of the area. Water license is subject to the payment of security deposit and monthly water charges. Water license ensures that the electrical business has adequate and clean water supply for the electrical work, drinking, washing, etc.
  • Gas License: It is the license to obtain the gas connection for the electrical business. Gas license is granted by the gas distribution company of the area. Gas license is subject to the payment of security deposit and monthly gas charges. Gas license ensures that the electrical business has adequate and safe gas supply for the electrical work, heating, welding, etc.