Starting a private practice as a healthcare service provider requires licensing and regulatory criteria, be it a doctor’s clinic, individual practice, laboratory facilities, a single speciality hospital or a multi-speciality hospital.

Therefore, it is imperative for you to be aware of the different legal requirements before starting a clinic/hospital.

The Procedure for Hospital or Clinic Set Up in India

Registration under the clinical establishment act, 2017

This act was enacted by the central government and is being adopted by states of India. It needs a one-time registration for a premise towards being operated as a hospital. The registration must be done by the respective state government that has adopted this act. For registration, hospitals should fulfill the minimum requirement under the category in which it falls. Each state has described the procedure of registration of the hospitals that fall within their territory.

>Registration under companies’ Act, 2013

This act is applicable when the hospital established it under the ownership of a corporation. The act needs that the corporation is registered and fulfills the requirement of incorporation like memorandum of association, articles of association, capital structure formation, securities allotment, account audits, etc.

Director Index No (DIN NO) for each director

This comes under the Ministry of Corporate Affairs, Government of India. It is a compulsory registration required for each director who wants to be a part of a corporation. It is a onetime registration for directors.

Registration under societies registration act, 2001

In case the hospital is being established under the ownership of society, the society registration act is required.

Locations of the Hospital

This is required to be chosen well, because if there are already some hospitals in the locality, then it would be difficult to get in patients. Also, the hospital must set up in an area that has a good transportation facility or is close to a railway station. One must look for a non-agricultural land particularly designed for hospitals. All the electricity supply, as well as the water supply, should be easily available and that is required to be checked before purchasing any land for the hospital set up.

Facilities Offered

The facilities offered through the hospital should be decided by the management dependent on the locality of the hospital. It might be generalized into pathology, ICU treatment; orthopedic, as well as other specialized services should be specified. Also, the facilities linked to electricity, AC rooms, water, hygiene maintenance, etc, should be checked before providing any specialized services.


Land and construction

A Hospital could be set up only on a no- Agriculture land could be used. The numerous approval, as well as permissions required from the local authority and the government, should be obtained before starting any hospital.

Electricity and water

A hospital needs approximately 100 liters of water per bed each day. The water requirement for the various hospitals would be different from project to project based on whether the hospital is a primary, specialized hospital, etc. The concerned municipal authority permission should be obtained for making available the water as well as electricity facilities.

Well planned sanitary measures for disposal of waste as well as drainage system which includes tanks, pipelines, etc. and permission from the local authorities should be obtained.

Biomedical Waste

The large hospitals must have an incinerator for disposal of bio-disposal waste, for instance, body parts or tissues. A smaller hospital is not able to afford such cost and it needs minimum space and additional machinery installations which are expensive for a small hospital set up. The Municipal corporation permission would also be required for such disposal of waste and it must not be harmful to the people living at a nearby location.

Fire and Health License

Approval of Fire Department is required for a large hospital as well as ahealthcertificate from the local authority after installation of all the beds and equipment within the Hospital. A NOC from Fire the department shall also be required for small hospitals and it would be the responsibility of the hospital management to prove that the hospital would not cause any harm or loss of life and requires to be procured from the local municipal council.

Regulations relating to Employment of Staff

  • Employment of employees (Doctors, Nurses, Pharmacists) only after proper credentialing
  • Prevention of sexual harassment of women employees at the workplace
  • Responsibility of the employer for the safety of workforces
  • Rules governing the employment of staff
  • Immunization / other measures for the protection of staff from Occupational Health hazards.

Sign Boards
Rules for the size, contents as well as the correct place for signboards (IMC Regulations 2002)

Information that requires be displayed at the Hospital are:

  1. Certificate of registration of hospital with the municipal authorities
  2. IMC/SMC registration certificate (IMC Regulations, 2002)
  3. Charges for consultation as well as other procedures/services (IMC Regulations 2002)
  4. Clinic timings, closed days

FSSAI license for operating a kitchen

FSSAI license comes under the Food Safety and Standards Authority of India under the Ministry of Health and Family Welfare, Government of India. The license is necessary if the hospital runs an in house kitchen for the patients as well as attendants.

Permit to store LPG cylinder

If the hospital store has an LPG cylinder in large quantity for usage in the hospital’s Kitchen or hospital purposes, the hospital must have a permit of Controller of Explosives under the Petroleum act, 1934.

Pharmacy registration for medical shop

This comes under the Office of the Drug Controller. There are different licenses for medical shops attached to hospitals (IP) and standalone medical shops. There are minimum requirements for the registration like the minimum size of the shop ( 250 – 300 ft) as well as requirements of Air conditioner and Refrigerator. This license is valid for 5 years.

Trademark registration

Indian Trademarks Act 1999 is not a mandatory activity and is essential only if the hospital wants to trademark its logo or name

Vehicle registration for ambulances

The ambulance bought by the hospital must be registered under RTO, Transport Department, and state government.

Arms licenses under arms act 1959

If arms are possessed by the hospital or its employees (for example by security guards), a license for the same should be available

Planning the Hospital Infrastructure

One must take care of these things

  • Qualifications of Doctors as well as their registration numbers
  • Working hours for Nurses as well as their shift timings
  • Medical equipment as well as instruments purchased
  • Computers as well as other hardware devices set up
  • Engineers as well as staffs required for maintenance, plumbing, medical gas pipelines, air conditioning, etc.

The other important license required is:

  1. Regulations Building Permit and Licenses (From the Municipality)
  2. No objection certificate from the Chief Fire Officer “License under Bio-Medical Management and Handling Rules, 1998.
  3. No objection certificate under Pollution Control Act.
  4. Narcotics and Psychotropic substances Act, 1985
  5. Vehicle Registration Certificates (For all hospital vehicles.)
  6. Atomic energy regulatory body approvals (For the structural facility of radiology dept, TLD badges, etc)
  7. Boilers Act, 1923(If applicable)
  8. MTP Act, 1971 (MTP stands for Medical termination of pregnancy. To be displayed in the Gynaec and Obs department)
  9. License for the Blood Bank (To be displayed in the Blood Bank)
  10. Transplantation of Human Organs Act 1994(If applicable)
  11. PNDT Act, 1996 (PNDT stands for Prenatal diagnostics test. To be displayed in the Radiology department that this is followed. )
  12. Dentist Regulations, 1976
  13. Drugs & Cosmetics Act, 1940
  14. Electricity Act, 1998
  15. ESI Act, 1948 (For contract employees)
  16. Environment Protection Act, 1986
  17. Fatal Accidents Act 1855
  18. Guardians and Wards Act, 1890
  19. Indian Lunacy Act, 1912 (Applicable only if a Psychiatry dept is there in the hospital)
  20. Indian Nursing Council Act 1947 (Whether nurses are registered with NCI).
  21. Also one must check whether pharmacists are registered with Pharmacy Council of India.)
  22. Insecticides Act, 1968
  23. Lepers Act Maternity Benefit Act, 1961
  24. Minimum wages act, 1948 (For contract employees)
  25. Pharmacy Act, 1948
  26. SC and ST Act, 1989
  27. Protection of Human Rights Act, 1993
  28. Registration of Births and Deaths Act, 1969
  29. Urban Land Act, 1976
  30. Right to Information Act 2005

Registration for transplantation of human organ Act, 1994 (in case the hospital varies out human organ transplantation or organ harvesting, it shall be registered under this Act)
Excise permit to store spirit (to store spirit beyond a certain quantity, the hospital must obtain a permit from state excise department)

Multiple medical laws along with ethics are required to be followed at every step. A set of rules and eligibility criteria were put forth by our government for hospitals, which offer services towards central government health scheme beneficiaries.



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