In this changing economic environment, the whole world looking towards India. Indian Economy witnessing rapid growth. Indian economy is sustainable in nature, Massive Consumer market, Digital competitiveness, better infrastructure, and also the current stable government with a full majority and business-friendly. Considering all these advantages and for better future growth in India, businessmen, Investors, and entrepreneurs from all over the world want to parts of Indian Business, especially startups. MNC and young generation.
Starting a business in India one has to decide the following things
Type of Business:
To start a business in India one has to create a business entity. Business entities work as a vehicle through which a business can run. A business Entity can be a Proprietorship, Partnership, Limited Liability Partnership (LLP), Private Limited Company or Limited Company. This decision depends on your Business Goal, Capital Contribution, Tax, and ownership Preferences
Plan for the business:
Develop a comprehensive business plan that outlines your business objectives, target market, marketing strategy, financial projections, and operational plan. It is very important for the success of a business.
Choose a Business Name:
Choose a unique and suitable name for your business. For Company (Private/Public Limited Company, LLP, OPC, and Section 8 Company) kindly Check the availability of the business name through the Ministry of Corporate Affairs (MCA) website. However, it is good to start your business with a unique name so that you can register it as a Trademark.
Register the Business: Register your Business to the respective registrar according to the Type of Business you want to start.
Open a bank Account: Open a business bank account using the registration certificate and other required documents.
Tax Registration: Obtain a PAN (Permanent Account Number) for the business. Registered your organization on the Income Tax Portal. Register for Goods and Services Tax (GST) if your turnover exceeds the prescribed threshold.
Labour Law Registration and Compliance: Comply with labor laws by obtaining the necessary registrations, such as Employee Provident Fund (EPF) and Employee State Insurance (ESI) registrations.
Local Licenses and Permits: Depending on the nature of your business, you may need local licenses and permits. Verify the specific requirements with local authorities.
Maintenance of Book of Account: Set up an accounting system to maintain accurate financial records.
Compliances and Corporate Governance: Comply with the statutory requirements of the entity.
Networking and Marketing:
Network with other businesses and potential clients and Develop a marketing strategy to promote your products or services.
Except for Proprietorship in all other forms of Business entities the Entrepreneur has to apply for PAN and TAN for the Business entity. Once the Pan and TAN get allotted it needs to open a business current Account.
Proprietorship:
A proprietorship is a type of business that is owned, managed, and controlled by the proprietor. As the proprietorship and proprietor are the same, it is very easy to start and there are very minimal compliance requirements.
Benefits of Proprietorship
- Ease of Formation
- Control on Business
- Direct Benefits
- Flexibility in Decision Making
- Lowest Legal Compliance
Problem/Difficulties/cons of Proprietorship
- Proprietors have no limited liabilities.
- The challenge in raising Capital.
- Limited Growth Potential
- Lack of Skill
- Lack of proper management support
Registration:
As there is no dedicated government establishment it can get recognition by registering it in GST or obtaining UDYAM-AADHAAR or a license through other respective government authorities. Hence the general outline of registration of proprietorship is as follow:
- Choose a Business Name
- PAN and AADHAAR of the proprietor
- Register yourself under GST(Good and Service Tax)
- Open Bank Account
- Register professional tax(if applicable)
- Register under Labour law (if applicable)
- Udyog Adhaar Registration
- Trademark registration
- Shop and Establishment Registration
- ISO registration
- IEC code
Obtaining GST Registration
Following Documents and Information required for obtaining GST registration
- Consent of Proprietor for obtaining GST registration
- PAN of proprietor
- Passport Size Photo of Proprietor
- Email of proprietor
- Mobile number of proprietor
- Aadhaar of proprietor
- Electricity Bill for Registered office
- Rent Agreement and NOC from the Owner of the property for the registered office if it is not owned by the proprietor.
Note: Proprietor can obtain DSC (Digital Signature Certificates) for smooth operation for obtaining the GST
Once the GST gets registered the Proprietor can go for the opening of the current account with the following documents:
- GST registration certificates
- PAN and AADHAAR of the proprietor
- 2Photograph
- Utility Bill of the registered office
Compliance
- Yearly Income Tax filing
- GST Return Filing
- TDS Return filing
- EPF /ESI return filing(if applicable)
- Regler maintenance of the Book of Account for the business operation
Timelines for Registration of Sole Proprietorship in India
It will take 10 to 15 days from the date of obtaining complete documents from the clients. However, the timelines for registration will vary from case to case depending on the government and bank processing timelines.
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Great article! π The comprehensive approach to starting a business in India is incredibly helpful for both new and seasoned entrepreneurs. I especially appreciated the sections on choosing the right business structure and navigating compliance requirements. Itβs clear that understanding these aspects is crucial for success. Looking forward to more insights from @StartBizzIndia! Keep up the great work! π #Entrepreneurship #BusinessIndia