Business setup · Project report · Funding
Business setup and project funding: incorporation to a sanctioned loan
Setting up a plant in Gujarat is one file, not ten: the company or LLP and its registrations, land and approvals, a project report the bank can lend on, and the VGIP 2026 claims that ride on the loan. We run it end to end — term, working-capital and machinery loans included, with collateral-free cover under CGTMSE now up to ₹10 crore a borrower.
20+ years in Gujarat incentives300+ projects99% filing success
From entity to term loan in five moves. Udyam bands from 1 April 2025: micro up to ₹2.5 crore in plant and machinery, small up to ₹25 crore, medium up to ₹125 crore.
- ₹10 croreCGTMSE cover a borrower, from 1 April 2025
- ₹20 lakhMSE loans that need no collateral
- 100%of the CGTMSE fee repaid for 5 years under VGIP 2026
On this page
What business setup and project funding cover
Two halves of one project. Setup: incorporating the right entity, Udyam and GST, land, building, pollution and factory approvals — through Gujarat’s single window, the Investor Facilitation Portal. Funding: a detailed project report and CMA data in the format banks lend on, term, working-capital and machinery loans, collateral-free cover under CGTMSE where it fits, and the VGIP 2026 subsidy claims lined up from the first day.
- Single window
- Investor Facilitation Portal (IFP), run by the Industries and Mines Department under the Gujarat Single Window Clearances Act, 2017.
- Incorporation
- Companies on the MCA’s SPICe+ form; LLPs on Form FiLLiP. Both also allot the new entity’s PAN and TAN.
- MSME status
- Udyam registration: online, free and paperless; classification by investment and turnover.
- Deferred state approvals
- Gujarat MSME Act, 2019: an acknowledgement certificate stands in for approvals under State laws for three years.
- What banks ask for
- A project report with cost of project and means of finance, machinery quotations, projections over the loan tenor, and CMA data.
- Collateral-free lending
- No collateral on MSE loans up to ₹20 lakh (RBI, for loans sanctioned or renewed from 1 April 2026); CGTMSE cover up to ₹10 crore.
- State support
- VGIP 2026 reimburses 100% of the annual CGTMSE fee for five years, alongside capital and interest subsidy.
Where new plants are going up. Each district has its own land, DISCOM and approval route.
- Sanand, Becharaji — auto and components
- Dholera, Dahej — large projects
- Changodar, Bavla — MSMEs on private land
- Rajkot, Morbi — engineering and ceramics
- Vapi, Ankleshwar — chemicals
What changed in 2025-26
- Udyam limits raised from 1 April 2025: micro up to ₹2.5 crore investment and ₹10 crore turnover; small ₹25 crore and ₹100 crore; medium ₹125 crore and ₹500 crore.
- CGTMSE cover up to ₹10 crore a borrower for guarantees from 1 April 2025, with fees from 0.37% a year.
- No collateral on MSE loans up to ₹20 lakh sanctioned or renewed from 1 April 2026 (RBI, 9 February 2026).
- Labour Codes in force from 21 November 2025: factories register under the OSH Code; Gujarat’s OSH Rules 2025 set 30-day, deemed plan approval.
- VGIP 2026 (from 1 June 2026) reimburses CGTMSE fees for MSEs for five years and supports listing on an SME exchange.
Micro, small or medium: the 2025 limits
Udyam classifies by both investment in plant and machinery and turnover; crossing either limit moves you up a category. Exports are left out of turnover, and all GSTINs under one PAN count as one enterprise. VGIP 2026 uses its own test for subsidies: plant and machinery investment only.
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| Category | Investment in plant & machinery | Turnover (Udyam) | VGIP 2026 test |
|---|---|---|---|
| Micro | Up to ₹2.5 crore | Up to ₹10 crore | P&M up to ₹2.5 crore |
| Small | Up to ₹25 crore | Up to ₹100 crore | P&M up to ₹25 crore |
| Medium | Up to ₹125 crore | Up to ₹500 crore | P&M up to ₹125 crore |
Investment means plant, machinery and equipment at purchase value excluding GST — not land, building, furniture or fittings.
Company, LLP or firm: registering the entity
The entity decides who signs, who carries the liability and which benefits are open: Gujarat’s Biotechnology Policy, for example, is only for companies and LLPs, and DPIIT startup recognition is not available to proprietorships. A private limited company is incorporated on the MCA’s SPICe+ form, which also allots the directors’ DINs and the company’s PAN and TAN, registers it with EPFO and ESIC and sends the request to open its bank account — and can apply for GST in the same filing. An LLP is incorporated on Form FiLLiP, which allots its PAN and TAN too.
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| Structure | Law and how it is registered | Minimum people | Worth knowing |
|---|---|---|---|
| Private limited company | Companies Act, 2013 · SPICe+ | 2 directors and 2 shareholders | Limited liability; can bring in equity investors; the usual choice for larger bank loans |
| One Person Company | Companies Act, 2013 · SPICe+ | 1 director and shareholder, with a nominee | Limited liability for a single founder |
| Limited liability partnership | LLP Act, 2008 · Form FiLLiP | 2 designated partners, at least one resident in India | Limited liability with lighter compliance; the LLP agreement is filed on Form 3 within 30 days |
| Partnership firm | Indian Partnership Act, 1932 · Registrar of Firms | 2 partners | Registration is optional, but an unregistered firm cannot sue to enforce its contracts; partners’ liability is unlimited |
| Proprietorship | No separate registration · Udyam, GST and local licences in the owner’s name | 1 owner | Quickest to start; the owner carries unlimited liability |
- First board meeting and auditor
- Within 30 days of incorporation: the first board meeting (section 173) and the first auditor, appointed by the board (section 139(6)).
- Commencement of business
- Form INC-20A within 180 days, declaring that the subscribers have paid for their shares. Until it is filed and the registered office is verified, the company cannot start business or borrow (section 10A).
- LLP agreement
- Filed on Form 3 within 30 days of the LLP’s incorporation.
- Then
- Udyam, GST if it was not taken on SPICe+, an IEC if you import or export, DPIIT recognition where the business qualifies — and the plant approvals below.
The approvals a new plant in Gujarat needs
Most of these are applied for on the Investor Facilitation Portal. Land and the Consent to Establish come first; power, fire, the Consolidated Consent and Authorisation and the factory licence close the file before production. Timelines below are the ones the State publishes for each service.
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| Approval | Law or authority | When | Published timeline |
|---|---|---|---|
| Udyam registration | Ministry of MSME portal | At the start; free | Immediate, self-declared |
| GST registration | CGST Act — compulsory above the turnover limit or for any inter-state supply | Before the first sale; within 30 days of liability | 7 working days; 30 with a site check |
| Land: NA permission or GIDC allotment | Revenue Department (s.65 / 65B) or GIDC | Before construction | NA 90 days; GIDC 90 days |
| Building permission | Development authority (CGDCR 2017) or GIDC | Before construction | 30 days |
| Consent to Establish | Gujarat Pollution Control Board | Before construction | 120 days |
| Factory plan approval | DISH, under Gujarat OSH Rules 2025 | Before construction | 30 days, then deemed approved |
| Power connection | UGVCL, MGVCL, DGVCL, PGVCL or Torrent Power | Before trial runs | 7 days; 15 with right of way |
| Fire safety certificate | Gujarat Fire Prevention and Life Safety Measures Act, 2013 | Before occupation | 21 days |
| Consolidated Consent and Authorisation | GPCB — consent to operate and hazardous-waste authorisation | Before production | 120 days |
| Factory registration and licence | OSH Code 2020 and Gujarat OSH Rules 2025 | Before production | Registration within 7 days or deemed |
| Boiler registration | Boilers Act, 2025 — if you run a boiler | Before use | 30 days |
| Import Export Code | DGFT — if you import or export | Before the first shipment | Online; update every April to June |
Gujarat MSME Act, 2019: file a declaration of intent and the acknowledgement certificate works as every approval needed under State laws for three years. It does not cover central-law approvals such as GPCB consents or GST.
Bank loans we arrange — for new projects and running businesses
Not only project loans. We prepare and place term loans for a new plant or an expansion, working capital limits, machinery loans, takeovers and enhancements of existing loans, export credit, and loan against property or construction finance — each in the format the lender asks for, with CGTMSE or MCGS-MSME cover where it fits. The lender decides; our job is a file it can decide on quickly.
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| Loan | What it funds | What the lender looks at |
|---|---|---|
| Term loan — new plant or expansion | Building, plant and machinery and other fixed assets, repaid over several years | Project report: cost of project and means of finance, quotations, projections to the end of the loan, repayment schedule; promoters’ contribution |
| Working capital — cash credit, overdraft, bill discounting | Stock, receivables and day-to-day running costs; reviewed every year | CMA data: past and projected balance sheets, stock and debtor levels, monthly stock and book-debt statements |
| Machinery loan | A specific machine or line, usually secured on the machine itself | Supplier quotation, the capacity it adds and how the extra output repays it; MCGS-MSME can guarantee 60% of equipment loans |
| Takeover and enhancement | Moving loans to a lender on better terms, or raising limits as sales grow | Audited accounts, repayment track record, existing sanction letters and a fresh CMA |
| Export credit — packing credit and post-shipment | Finance against export orders before and after shipment, in rupees or foreign currency | Export orders or letters of credit, IEC and past export performance |
| Loan against property and construction finance | Business needs secured on property; construction of a project by a builder or developer | Title and valuation; for builders, approvals and project cash flows |
- Interest subsidy needs a bank or FI loan
- VGIP 2026 counts term loans from RBI-recognised banks and financial institutions, ECB from overseas institutions, and government FIs such as GSFS, NDDB, HUDCO, REC and PFC. Loans from other NBFCs are not eligible (MSME scheme, para 1.8).
- Fixed assets only
- The interest subsidy is on term loan disbursed for eligible fixed capital investment — not on working capital.
- Collateral
- No collateral on MSE loans up to ₹20 lakh; above that, CGTMSE cover up to ₹10 crore — see the next section.
Collateral-free loans and credit guarantees
Collateral is the usual sticking point for a new or growing MSME. These are the routes around it in force today — and VGIP 2026 refunds the CGTMSE fee on collateral-free term loans to manufacturing MSEs for five years.
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| Route | Limit | What it does |
|---|---|---|
| RBI rule for MSE loans | Up to ₹20 lakh | Banks may not take collateral (loans sanctioned or renewed from 1 April 2026) |
| CGTMSE | Up to ₹10 crore a borrower | Guarantees 75% of the loan to micro and small enterprises — 85% for micro loans up to ₹5 lakh, 90% for women |
| MCGS-MSME | Loans up to ₹100 crore | 60% guarantee on loans for equipment and machinery |
| MUDRA | Up to ₹20 lakh | Tarun Plus (₹10–20 lakh) for borrowers who repaid a Tarun loan |
| PMEGP | Project up to ₹50 lakh (manufacturing) | Margin-money subsidy of 15–35% of project cost for new units |
- CGTMSE fee
- Annual guarantee fee from 0.37% (loans up to ₹10 lakh) to 1.20% (₹8–10 crore); the bank decides whether to pass it on.
- Gujarat refund of the fee
- VGIP 2026, para 15: 100% of the annual CGTMSE fee paid, for five years, to MSEs — paid once a year with the interest subsidy. Not for trading or service units.
- Stand-Up India
- Loans of ₹10 lakh to ₹1 crore for SC/ST and women entrepreneurs; its scheme period ran to 31 March 2025 — check with the bank before planning on it.
Setup and funding in numbers
Five illustrations: how the category and the guarantee work out, and what a new company must file before it can borrow.
How we take a project from idea to sanction
Structure and registrations first, approvals and the project report in parallel, then the loan — with the subsidy file built alongside rather than afterwards.
Choose the structure and register
Company (incorporated on the MCA SPICe+ form, which also allots its PAN and TAN), LLP, partnership or proprietorship; then Udyam and GST, and a bank account the loan can run through.
Weeks 1–2Secure land and file the approvals
NA permission or a GIDC plot, then building permission, Consent to Establish and factory plan approval on the single window.
Months 1–4Prepare the DPR and CMA data
Cost of project, means of finance, machinery quotations, capacity, projections to the end of the loan and a repayment schedule.
Alongside approvalsGet the loan sanctioned
Lender-specific proposal, CGTMSE or MCGS cover where it fits, and follow-up to sanction and disbursement.
Line up the subsidies
VGIP 2026 registration and eligibility certificates, so capital, interest, CGTMSE-fee and other claims start on time.
Before and after production
- Promoters’ KYC and ITRsthree years where available
- Land papers7/12, NA order, lease or GIDC allotment
- Machinery quotationswith supplier details
- Civil estimatesfrom the architect or engineer
- Approvals in handUdyam, GST, consents as available
- Projections and CMA datato the end of the loan
Where new projects lose time and money
- Building before the Consent to Establish.GPCB consent comes before construction, not after.
- A project report the bank cannot use.Projections must run to the end of the loan, with assumptions stated.
- Assuming the bank will waive collateral.The no-collateral rule stops at ₹20 lakh; above it, ask for CGTMSE cover explicitly.
- Classifying on investment alone.Udyam also tests turnover; crossing either limit moves you up a category.
- Leaving subsidies for later.VGIP 2026 claims depend on dates and documents set during the project.
- Counting on a lapsed scheme.Stand-Up India’s scheme period ran to 31 March 2025; confirm any scheme with the lender first.
Setup and funding: questions we get asked
What are the Udyam limits for micro, small and medium enterprises?
From 1 April 2025: micro — investment in plant and machinery up to ₹2.5 crore and turnover up to ₹10 crore; small — up to ₹25 crore and ₹100 crore; medium — up to ₹125 crore and ₹500 crore. Crossing either limit moves an enterprise to the next category.
Is Udyam registration free?
Yes. Udyam registration is online, free and paperless, based on self-declaration with Aadhaar, PAN and GSTIN.
How much can CGTMSE cover?
Up to ₹10 crore per borrower for guarantees approved from 1 April 2025. Cover is 75% for most borrowers, 85% for micro loans up to ₹5 lakh and for SC/ST, disabled, ZED-certified and aspirational-district borrowers, and 90% for women entrepreneurs.
What does CGTMSE cost?
An annual guarantee fee from 0.37% for loans up to ₹10 lakh to 1.20% for ₹8–10 crore, charged on the guaranteed amount in the first year and on the outstanding amount after that. The lender decides whether to pass it on.
Does Gujarat reimburse the CGTMSE fee?
Yes. Under para 15 of the VGIP 2026 MSME scheme, micro and small manufacturing enterprises get 100% of the annual CGTMSE fee they pay reimbursed for five years, disbursed once a year with the interest subsidy.
Can a bank ask for collateral on a small MSE loan?
Not on loans up to ₹20 lakh to micro and small enterprises sanctioned or renewed from 1 April 2026: RBI’s directions bar banks from taking collateral on them.
Which approvals does a new factory in Gujarat need?
Typically Udyam and GST; land (NA permission or a GIDC plot); building permission; GPCB Consent to Establish and, before production, the Consolidated Consent and Authorisation; factory plan approval and licence under the OSH Code and Gujarat OSH Rules 2025; a power connection; a fire safety certificate; and, where relevant, boiler registration and an IEC.
What is the Gujarat MSME Act acknowledgement certificate?
Under the Gujarat MSME Act, 2019, an enterprise files a declaration of intent and receives an acknowledgement certificate that works as the approvals needed under State laws for three years. Central-law approvals, such as GPCB consents and GST, are still needed.
Is PMEGP still available?
PMEGP continues to run in 2026-27. New manufacturing projects up to ₹50 lakh get a margin-money subsidy of 15% to 35% of project cost, depending on category and location.
Do you handle company or LLP registration?
Yes. We incorporate private limited companies and one person companies on the MCA SPICe+ form, which also allots the directors’ DINs and the company’s PAN and TAN, registers it with EPFO and ESIC and sends the request to open its bank account, and LLPs on Form FiLLiP — with digital signatures, GST and Udyam registration, and DPIIT startup recognition where the business qualifies.
When can a new company start borrowing?
Once it has filed Form INC-20A — the declaration that its subscribers have paid for their shares, due within 180 days of incorporation — and its registered office has been verified with the Registrar, which is normally done in the SPICe+ filing itself. Until then section 10A of the Companies Act, 2013 bars it from starting business or exercising borrowing powers.
Do you arrange bank loans other than project loans?
Yes. Besides term loans for new plants and expansions, we prepare and place working capital limits (cash credit, overdraft and bill discounting), machinery loans, takeovers and enhancements of existing loans, export credit, and loan against property or construction finance, in the format each lender asks for.
Does an NBFC loan qualify for VGIP 2026 interest subsidy?
Generally no. VGIP 2026 counts term loans from RBI-recognised banks and financial institutions, ECB from overseas institutions, and government financial institutions such as GSFS, NDDB, HUDCO, REC and PFC — some of which are themselves registered as NBFCs — plus any other government institution the scheme’s committee approves. Loans from other NBFCs are not eligible.
Do you prepare project reports for builders?
Yes. We prepare construction-finance proposals and loan-against-property files in the format the lender asks for.
Official sources
Figures on this page are from the Udyam notification, the Ministry of Corporate Affairs, the Investor Facilitation Portal, RBI, CGTMSE, PIB and the VGIP 2026 MSME GR.
Udyam classification notification
The investment and turnover limits in force from 1 April 2025.
Read the notificationMinistry of Corporate Affairs
Company incorporation on SPICe+, LLP incorporation on FiLLiP, and post-incorporation filings such as INC-20A.
Open MCAInvestor Facilitation Portal
Single-window applications and the published timelines for each approval.
Open the portalRBI directions on MSE lending
No collateral on MSE loans up to ₹20 lakh sanctioned or renewed from 1 April 2026.
Read the circularScheme for assistance to MSMEs
Para 15: CGTMSE fee reimbursement; para 14: SME exchange support; para 1.2: the MSME test.
Download the GRNotes. Published timelines are what the State commits to; real time depends on complete applications. Worked examples are illustrations; every loan is the lender’s decision.
We take a project from incorporation and approvals to a sanctioned loan, with the subsidy file built alongside.
- Company or LLP incorporation, Udyam, GST and single-window approvals
- Bank-ready DPR and CMA data
- Term, working-capital and machinery loans, with CGTMSE or MCGS cover
- VGIP 2026 registration and claims
Planning a new plant, an expansion or a new loan?
Tell us the project. We set up the entity, map the approvals, build the project report and loan file, and line up every VGIP 2026 claim.