How to Get a Rent Agreement for Your Business
At a glance
Cost
Rs 500 - Rs 5,000
Timeline
1-3 days
Difficulty
Easy
If you are renting a shop, office, kitchen, or warehouse for your business, a proper rent agreement is not just a good idea but a practical necessity. Almost every registration you apply for ( GST, Trade License, FSSAI, Bank Account) asks for address proof of your business premises, and a rent agreement is the most common document accepted.
Registered vs Unregistered Agreement
This is the most important distinction you need to understand:
Unregistered
Faster & cheaper- Limited legal validity (not admissible as primary evidence)
- Sometimes accepted for GST (with NOC from landlord)
- 11-month duration (avoids mandatory registration)
- Just stamp duty: Rs 100 to Rs 500
Registered
Recommended for business- Full legal validity in court
- Always accepted for GST registration
- Any duration (not limited to 11 months)
- Stamp duty + registration: Rs 1,000 to Rs 5,000+
The 11-Month Convention
Most landlords prefer 11-month agreements because the Registration Act (in most states) makes registration mandatory only for leases exceeding 12 months. An 11-month agreement saves registration costs and is renewed periodically. However, for business premises, a registered agreement gives you stronger legal standing and is preferred by government portals and banks.
Leave and License vs Lease Deed
Key takeaway
Leave and License
Best for most businessesThe most common format. You get permission to use the property without gaining tenancy rights. Easier to terminate. Ideal for offices, small shops, and co-working setups.
Lease Deed
Long-term / large spacesUsed for longer tenures (3 to 10 years). Stronger occupancy rights. More common for large commercial spaces, factories, and warehouses. Requires mandatory registration.
What clauses should a business rent agreement include?
Whether you draft the agreement yourself or use a lawyer, make sure these clauses are covered:
Rent amount and due date
Security deposit
Lock-in period
Permitted use
Maintenance and repairs
Subletting clause
Renewal terms
NOC for registrations
Get the NOC Clause in Writing
Many new business owners sign a rent agreement and then discover the landlord refuses to give a NOC for GST or trade license registration. Always include a clause that the landlord consents to the premises being used for business and will provide necessary NOCs.
What documents do you need for a rent agreement?
Rent Agreement Checklist
- Aadhaar of both landlord and tenant
- PAN of both parties (for registered agreements)
- Property ownership proof (sale deed, property tax receipt, or previous agreement)
- Passport-size photographs of both parties
- Two witnesses with their Aadhaar and photographs
- Stamp paper of the appropriate value for your state
- Draft of the agreement (you can use online templates or get one from a lawyer)
How to Get Your Agreement Done
- 1
Draft the agreement
Use online templates, a platform like LegalZoom India / Vakil Search, or a local lawyer (Rs 500–2,000). Include all key clauses listed above.
- 2
Buy stamp paper or use e-stamping
Print on stamp paper of the correct state value. Most states support e-stamping via SHCIL. Duty: 0.25%–5% of annual rent (min Rs 100–500).
- 3
Sign in front of witnesses
Both parties sign every page with two witnesses present. Keep at least two original copies.
- 4
Register (recommended for business premises)
Visit the Sub-Registrar with both parties, witnesses, and ID proofs. Fee: Rs 1,000–5,000. States like Maharashtra offer online registration.
Stamp Duty by State (Indicative)
Stamp duty rates change with state notifications. These are approximate rates for leave and license agreements:
Maharashtra
0.25% of total rent, min Rs 100
Delhi
2% of average annual rent
Karnataka
1% of annual rent
Tamil Nadu
1% of annual rent
Uttar Pradesh
2% of annual rent
Always confirm the current rate on your state's revenue or registration department website.
Official Resources
- SHCIL e-Stamping Portal (buy e-stamp papers online)
- IGR Maharashtra (online registration for Maharashtra)
- Your state's Sub-Registrar or Inspector General of Registration website for local stamp duty rates and registration process
Frequently Asked Questions
Want us to handle this for you?
Skip the paperwork. Our team can complete the entire process while you focus on building your business.
Get Expert HelpGet updates on this topic
We'll notify you when rules, fees, or processes change. Free, no spam.