To start any kind of business activity in any state a Gumasta License is required, which officially registers the entity under state law. The license is issued by the municipal corporation under the  Shops and Establishment Act. Obtaining the Gumasta License is a requirement by the government to start a business and it serves as a proof of legal entity – irrespective of whether it is run by a single individual or a company. For example, the license enables the entity to open a current account in a bank and apply for loans.