Which License is Required to Start a Hospital?

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Which License is Required to Start a Hospital?

Registrationwala

Starting a hospital can be a promising business opportunity. This is because a hospital provides people with a dedicated space where they can get medical care from licensed-healthcare professionals and recover as soon as possible. However, establishing a hospital isn’t a cake walk. It is a highly tricky undertaking. It demands you to have well-thought planning, a substantial amount of money and strict compliance with regulatory and legal requirements. 

Before you begin your journey of establishing a hospital, it is essential that you understand the necessary licenses to start a hospital. Doing so will help you get an estimate of costs involved and allow you to plan effectively!

Why Start a Hospital in 2025?

A hospital is primarily a place where patients receive the necessary medical care, treatment and support when they suffer from an illness, sustain an injury or require medical attention. Therefore, visiting a hospital is more of a necessity than a luxury for most individuals. 

Over time, there has been a rise in medical illnesses and new diseases have emerged that our ancestors had never even heard of, making hospital visits mandatory. Additionally, many people visit hospitals even when they are medically fit, simply to undergo routine health checkups. 

Due to all these reasons, we can say that the hospital business is one that will always remain relevant and cannot be replaced, whether in 2025 or 2050. Therefore, setting up a hospital sounds like a business opportunity you might want to consider.

Licenses and Certificates Required to Start a Hospital

To start a hospital, you require various approvals from concerned authorities. Here are the most common licenses and certificates required to start a hospital in India.:

1. Certificate of Incorporation

To start a hospital in India, you need to register your company with the Registrar of Companies (ROC) in accordance with the Companies Act 2013. For this, you must file the company incorporation application via the official MCA portal, and attach certain incorporation documents along with the application such as Memorandum of Association and Articles of Association. 

After filing the application, it will be reviewed by the Registrar. If your application meets all the requirements and is found to be satisfactory, the ROC will register your company and issue a certificate of incorporation. 

2. Certificate of Commencement of Business

According to Companies (Amendment) Ordinance 2018, it is mandatory for a company to secure a certificate of commencement of business. Without this certificate, a company cannot legally begin its business operations. 

Just like the certificate of incorporation, the certificate of business commencement is also issued by the ROC. Make sure to secure this certificate in a timely manner so you can commence business activities at your hospital.

3. Clinical Establishment License

One of the most important licenses to start a hospital is clinical establishment license. This license is granted under the Clinical Establishments (Registration and Regulation) Act 2010. 

The clinical establishment license is required for all clinical establishments in India, including diagnostic laboratories, clinics and hospitals. In Delhi, this license is issued by the Health Department. 

4. Health Trade License

Health Trade License is a mandatory license for businesses engaged in health-related products and services that directly impact public health (like food, medicines and diagnostic testing). Therefore, hospitals must secure this license. 

The Municipal Corporation of the respective state is responsible for issuing the health trade license. By securing this license, a hospital ensures compliance with health and safety regulations.

5. Fire Safety Certificate

Another certificate required for starting a hospital business in India is the fire safety license. It is basically a No Objection Certificate (NOC) from the Fire Safety Department of the state where the hospital is located. In Delhi, the Department of Delhi Fire Services is responsible for providing fire safety certificates.

Securing this certificate ensures that patients and staff will be safe in case of fire or other emergencies. Usually, the fire department inspects the fire safety measures of the hospital before issuing fire safety NOC. 

6. Bio-Medical Waste Management Certificate

Bio-Medical Waste Management Certificate is issued by the Pollution Control Board/Committee. An entity must secure this certificate if it is engaged in handling bio-medical waste, regardless of the quantity of such waste. 

This requirement applies to hospitals as well. Ensuring the bio-medical waste management certificate ensures compliance with Bio-Medical Waste Management Rules 2016.

7. NOC from Pollution Control Board

Hospitals are a potential source of pollution. They release waste water and air emissions that are harmful to the environment. Therefore, it is mandatory for them to obtain a Pollution NOC from the Pollution Control Board. 

By securing the NOC, hospitals ensure that they have necessary measures in place for handling pollutants and operating in a sustainable manner.

8. Drug License

If you want your hospital to have a medical shop within hospital premises or at a space attached to the hospital, you must secure a drug license. This license is issued by the Office of Drug Controller. To secure this license, you must meet certain requirements for refrigerator and air conditioner. Upon issuance, the drug license remains valid for a period of 5 years. This license must be renewed in a timely manner for smooth functioning.

Drug License Registration

9. ESIC Registration Certificate

ESIC Registration Certificate is a mandatory legal document for private hospitals if they employ 10 or more employees. The Employees' State Insurance Corporation (ESIC)  issues this registration certificate. 

By securing this certificate, private hospitals ensure compliance with ESIC Act 1948. Further, it helps the employees to receive benefits like medical care, sickness benefits, etc.

10. Blood Bank License

Blood Banks are entities that are engaged in the manufacture of blood and blood products. If a hospital operates a blood bank, it must secure a blood bank license. The Drug Controller issues the blood bank license after approval from the Drugs Controller General of India. 

11. Registration Certificate under MTP Act

Under the MTP Act of 1971, hospitals that conduct Medical Termination of Pregnancy (MTP) are required to register with their respective state authority. The place will be permitted to conduct MTP only after registration. 

MTP permission falls into one of two categories: category A, which does not have an operating room, or category B, which does. To implement MTP, the guidelines outlined in the MTP Act must be strictly followed.

12. Registration Certificate for Human Organ Transplantation

A hospital must register with the concerned authority if it engages in human organ transplantation or organ harvesting. The registration is mandatory under Transplantation of Human Organs Act 1994. To secure registration, the necessary infrastructure must be available for conducting the transplant. 

Conclusion

To open a hospital, several licenses and certifications are required from various government authorities. If you need assistance in setting up a hospital, you can connect with Registrationwala’s experts. We can help you secure a company incorporation certificate, drug license and various other approvals so you can start a hospital smoothly!

Frequently Asked Questions (FAQs)

Q1. Is GST registration required for healthcare services provided by hospitals?

A. No, healthcare services provided by hospitals are exempt from GST registration.

Q2. Which authority issues health trade license in Delhi?

A. The Municipal Corporation of Delhi (MCD) issues health trade license in Delhi.

Q3. How can I obtain a Drug License for pharmacy?

A. To obtain a drug license for pharmacy, you must file an application with the Office of Drug Controller.

Q4. Which license is required to open a blood bank in India?

A. A blood bank license, issued by the Drug Controller, is required to open a blood bank in India. 

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