Many Individuals aspire to open their own business, but succeeding in it is not an easy task. Before starting to sell products and services in the market one needs to build up a brand and get a following of customers who would jump as soon as you open doors of your business. To start a Fashion business one must have a plan and in-depth market research in the field of fashion industry. To build a fashion business or a brand there are various task which needs to be accomplished. From identifying the type of business to getting it registered, acquiring licenses and complying with various laws are fundaments to start any business in India.

Indian textile and apparel industry contributed 2.3% to the GDP of India, 13% to industrial production and 12% to export earnings in the year 2020-2021. Textile Being a billion dollar industry attracts various legislations such as IPR laws for the protection of artistic works of the creators, Consumer Protection act 1986 to safeguard the rights of customers, Labour laws, Code of Social security to provide various benefits to the workers, Taxation laws, international trade laws, advertising laws etc. Legal compliance is mandated for the smooth functioning of any business.

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Identifying the business structure

Before starting fashion business, an entity would need to be set up and a bank account must be open in name of the business. It is important to know the nature and type of business one would like to start. Founders will have to incorporate the business into a specific business type i.e. partnership, sole proprietorship (one person company), Private limited, public limited, limited liability partnership. Each business type has its own legal requirements and regulations so it is important to know before incorporating any business.

Registration and Licensing of a fashion industry

Each type of business registration would require the Shop and Establishment license which is given by the inspector of that area. The Shop and Establishment license should be acquired within a month from starting the business by submitting subsequent statements to the respective inspector. The statements will contain Date of the commencement of business, the name and address including the postal address of the business, name of the employer, the number of employees employed, and the category of business. Certain documents such as Identity proof, commercial address proof, Pan Card, payment of Challan proof is required for acquiring the licence under the Shop and Establishment Act. Challan fees may vary between Rs. 125-12500 depending upon the man power of the company. License is issued if the application is accepted.

For a Private limited company, the promoter has to get the company registered with the Registrar of the company (ROC) at the Location of the registered office. Documents to be enclosed are Memorandum of Association (MoA), Article of Association (AoA), Declaration by practicing professionals (CA, CS, Advocate etc) engaged in the formation of company, Declaration by Director/ manager/secretary and subscribers. Address for correspondence, details and identity proof of subscribers, detail and identity proof of first directors, Director Identification Number (DIN).

After the registration of all documents Registrar issues certificate of Incorporation which includes Corporate Identification Number (CIN). It is the conclusive proof of existence of a company.

Earlier all the documents filling was in physical form but after 2006 amendment Ministry of Corporate Affairs launched project for electronic filing – MCA 21 Called SPICe (Simplified Proforma for Incorporating Company Electronically) which helped in incorporating of company by uploading PDF file.

Recent 2020 Amendment, Ministry of Corporate Affairs launched new web form called SPICe+ replacing the old SPICe form as a initiative for ease of doing business.

SPICe+ can help incorporate a company with a single application for:

Name reservation, Incorporation, DIN allotment, Mandatory issue of PAN, TAN, EPFO, ESIC, Opening of Bank Account.

Registration under TRADEMARK

A trademark is a visual representation of a word, name, symbols, design, sounds or any combination thereof used by a business to differentiate its goods and services from that of another. It’s an exclusive identity of goods and services that a person is offering from other such goods and services. Trademark is an asset of a company which can be further sold, bought or licensed. Trademark plays a vital role when it comes to registration of fashion brand and logo. The primary object of a trademark is to avoid the dubiety in market place amongst the consumers. Therefore it’s important for a brand to get registered under the Trademark Act, 1999. Trademark, in India get registered by Controller General of Patents, Designs and Trademark under the Trademarks Act, 1999 and authorises the owner of the trademark with the right to sue for damages in case contravention of trademark takes place.

A trademark after registration is protected for 10 years and it can further be renewed easily after every 10 years before the expiry of the registration.

Registration process

The registration process includes filling of an application for trademark registration, examination of trademark, publication of trademark, objections if raised, registration thereof and renewal after every 10 years.

The 1st step would be to search for trademark; the applicant must choose a trademark which is different from the one existing in the market. And the chosen trademark must not be offensive, deceptive, and generic and must not contain exclusively protected emblems. Once it is chosen it is requisite to carry out public search on a trademark database, available with trademark registry to ensure that the trademark is unique.

After ensuring the chosen trademark is not registered with the Trademark registry India one can apply for registering the same. Filing is mostly done online and a receipt is issued immediately after filing application.

Post the filing of application, trademark is examined for any discrepancies and a report is issued by the examiner if application is in harmony with trademark act 1999. Within 30 days from filing of registration application an examination report is issued by the authority. The authority might accept the trademark absolutely, conditionally or might raise any objection.

If the trademark is accepted unconditionally it is published in the Trademark journal. If not, conditions to be satisfied. The objection of the authority will be mentioned in the report and a reply against the report asserting all the contentions and evidence against it must be filed within 30 days.

If such response gets accepted by the authority the trademark gets published in Trademark Journal. If the response fails to satisfy the examiner he can call for hearing. If in the hearing, objections raised are satisfied, examiner subsequently allows the registration of the said trademark and it further gets published in the Trademark Journal.

Trademark is advertised and published in a Trademark journal for a period of 4 months. The object behind it is to allow opposition (if any) from the general public. In case the published trademark is objected, a due process of law which includes hearing, filing of counter statements, presenting evidence etc is followed in order to get the Trademark registered.

Once the application proceeds for the registration, following the publication in journal, a registration certificate under the seal of the trademark office is issued.

Once the Trademark gets registered it is protected for 10 years and can further be renewed before the expiry.

Pan registration of a company 

A PAN is a permanent account number which is a vital document for any tax payer. It is a mandatory requirement for all tax-paying individuals, partnerships, companies, etc. Every corporate body carrying out business in India whether registered in India or Abroad requires a PAN card. It serves as a reference number for the Income Tax Department to track financial transactions. It also serves as an identity proof for various purposes. PAN helps in paying invoices, remittances during the income tax returns. Indian companies applying for a PAN card have to submit the following documents along with the application form- Proof of identity/proof of address, Copy of Certificate of Incorporation/registration, Copy of No Objection Certificate issued by MCA.

GST Registration

Goods and Service Tax Identification number or GSTIN is an unique 15 digit number which has replaced Tax Identification Number (TIN), before the introduction of GST, dealers were registered under state VAT laws and were given TIN by respective taxing authorities. Business which provides online services or provides services like hotel, restaurant, shopping, factories etc has to pay GST to government. Such business must register under GST and have GSTIN. The Tax identification number helps income tax authorities to maintain records of GST dues and payments. Business whose turnover in more than 40 lakhs needs to be registered under GST and for the North-eastern and Hill states the turnover limit is 10 lakhs.

One needs to apply for GST registration while applying for incorporation of company on MCA (Ministry of Corporate Affairs) portal by furnishing information including PAN card no., Aadhar No., Business address proof, directors identity proof, incorporation certificate or business registration proof etc is required. Registration process under GST is now integrated with SPICe-AGILE Form (Simplified proforma software of MCA). After the acceptance of furnished details by the GST Portal, Acknowledgement Reference Number (ARN) is generated and the status of SRN (Service Request Number) gets updated to “pending”. The person gets information on the status of application from the tax authorities within 3 days via email. If the ARN gets approved the status of SRN will get updated to “approved” and the intimation/GSTIN will be sent via SMS or mail.