The world’s business giants were not born overnight. Somebody had an idea somewhere, formed a strategy, gathered funds, and launched a small business. It was nurtured by unique ideas, determination, and superior service. It safeguards performance and branding. This idea is continuously followed by a study of the background of every big business. The same edict applies to the industrial giants of India. If you want to set up a new business, then how to start a business in India is the first question that comes to mind. Starting a new company appears to be a challenging task.
Sometimes when I think regarding an entrepreneur’s liberty, courage, Belief, optimism, and style these thoughts come to my mind.
There is no need for any university degree or even any required prior experience. There are no constraints and limitations to becoming an entrepreneur if you have compassion, conviction, and belief.
List of documents needed prior to the company’s submission:
- The initial copy of the ROC formal letter about the availability of the name of the organization
- Director Identification Number of all those directors of a proposed business
- DSC – Digital Signature Certificate
- Form-1 for a company’s incorporation
- Form-18 for the condition or the proposed company’s address
- Form-32 for details of proposed directors, managers, and secretaries
Check: How To Start A Blog
How to start any business in India?
You’ve got a dream, but you’re afraid to take any action. Before starting any business in India, if you want to start a profitable business in India, then you need to consider a few things.
Why would you want to start a business?
There might be various reasons to start your own business, some of them might be-
- You might be passionate about something, and this has been your dream since childhood.
- You might not want to work under somebody and want to be your own boss.
- Whatever you wish to do, there is liberty.
- Most of us are working professionals who are afraid to leave our jobs.
- You might be inspired by the words and wishes of our Prime Ministers to open a small shop.
I’ll teach you everything from a to z about how to start any business in India, no matter what the reason is.
Some Ideas of Businesses that you can start in India
First of all, what kind of business can a person start in India? Before finding out how to start a company in India. In India, there are various types of business one can start, such as,
- Travel agency. Image credits: Shutterstock.
- Mobile recharge shop. Image credits: Creative Commons.
- Breakfast joint. Image credits: pixabay.com.
- Fruit juice kiosk.
- Garment tailor.
- Online bakery.
- YouTube channel.
- Wedding consultants.
How can I start a business in India?
Would you like to start a company with a small investment in India? Following that, we can split the article into some steps!
Step 1:- Idea and Planning
You have to look at two things, first what is your passion and what interests you and what do you like to do.
And the second thing is how you can give people value from your job and how you can benefit people and give them value in return for giving you money.
After these two things are done, You can see which company already exists that coincides with any of these two things. Then study what kind of company is already on the market as well as how they operate.
For instance, imagine that the first thing is if you love adventure sports such as river rafting, then the second thing is how you can give people benefit. Then you can start a company for adventure sports here.
If this satisfies you, then look at what the business of all kinds of adventure sport already exists in India.
How are they doing, contacting them to research them and questioning them about their company, and researching their business model?
A business plan is a next move after this.
Assume you commence your business now, then plan a full one-year budget report from tomorrow to the end of the year.
How much money are you going to need to start the company, how much capital and investment are you going to require? And how high the costs will be and what benefit you’re going to make in the whole year.
And where are you going to get the necessary capital and resources you need? You’re going to borrow from friends, ask your parents, or take a loan out of the bank.
The business plan you have developed for the year should be as thorough as possible. Investors would be persuaded. However, that this company will certainly be profitable. And if we invest in this, then we’re not going to make any losses, and we’re just going to make a profit from the company.
We will shift one to the next level now that you have made your one-year business plan.
Step 2. Register your Business
Register your company with the government. There are various ways of registering it, depending on the form of the company. These various forms are known as business entities.
A. Sole Proprietorship
‘Sole Proprietorship’ is the first, oldest, and simplest way of registering your company.
Proprietorship is a way of registering your business where you are the owner of the business.
No matter what, the revenue or loss of the business would be your own profit or loss.
So in the context that you are personally responsible for all that happens with the business,
To register their shop as Sole Proprietor, small business owners like a shopkeeper chose this.
If you want to become a Chai wala, you can register your company as the proprietorship.
The proprietorship has many advantages, and the government rules are the minimum here.
You would have to go to the local authority in your area to register your business as the proprietor.
If you live in a good city, then you have to go to the municipality, and to the Gram Panchayat if you reside in a village. For a few areas, this is also accessible online, though not in others.
It takes approx Rs-1000/- and 1-2 days to file. You can only apply for a Proprietorship if you are having a small scale business. Often, the business does not employ more than 4 employees as then it would become a large -scale business.
B. One Person Company (OPC)
One Person Company is a form of registration in which you are not directly responsible if anything happens to the company.
And they can’t come to your house and force you to leave your house to pay for your company’s loss.
The cost of registration of this is about Rs-6000/- and more or less in different companies. And it’s going to take 8-10 days for the registration work, and because this is a one-person company, you’re going to have to be the director and shareholder of this business.
Once you have completed your company registration as OPC, if the name of your company is SBL, it will be SBL Pvt. Ltd. and in the brackets, OPC
C. Private Limited Company (Pvt. Ltd.)
The next way your business can be registered is Pvt. Ltd, ltd. Company.
In Pvt. Ltd. Company, the shareholders’ minimum number is only 2. The minimum threshold for directors is two. The maximum number for shareholders here is 200.
But, then, if you’d like more than two shareholders and directors, you have to form a public limited company. So the name of Pvt. Ltd. is operated in the same way as a one-person company.
There is a limited liability here because the shareholders have limited liability, so if there is a loss in the business then the shareholders would not have to compensate for the loss directly. Hence, it’s a very reputable and credible way to register your business as Pvt. Ltd.
If you do so, if your business has Pvt. Ltd. in its name, the faith of investors and customers in your business and the confidence of banks rise greatly.
Many startups register their business as private limited as it is easier to get a loan from the banking institutions and also because the investors investing in the company becomes easy.
The cost of this is about Rs-7000/- and registration takes between 5 and 10 days.
Obviously, the business with Pvt Ltd is highly trusted. The enforcement by the Pvt. Ltd. is therefore also rising.
D. Limited Liability Partnership
This is great, however, only when you are a specialist in a field such as physicians, architects, or financial consultant, and this is useful when you form an enterprise for a short period of time.
If you are a builder, for instance, and you started a company to build a building. You must need and would have hired some staff members like engineers, architects, and workers. Now, however, the construction is completed, and you do not need this company, so that company can be dissolved.
Step 3. Make it official
You want to know how to start a company without investing or investing less. Then understand these things in depth. It seems like a hard job to start up a new company. Nevertheless, as many companies are considering setting up by entrepreneurs, it helps both the business and the economy at large.
When you are going to register your company in India, there are a few things to take into account. With this in mind, we are glad to share some basic steps essential for any company to register in India.
1. Evaluate the availability of the name of the company
Check that the proposed name is available before the registration of the company. This is possible online, and on the MCA21 website, the applicant will verify the availability of your chosen company name. Discuss the chosen company’s name on the website after the cleaning visit.
2. Obtaining a Director Identification Number (DIN) (DIN)
A unique identifying number is what a Director Identification Number (DIN) means. Which is given by the director of any current or potential business. DIN can be accessed temporarily by filling out the online application form DIN-1. A printed and signed copy of the form should then be sent with their identification card to the Ministry. After verification of documents and approval after submission, the permanent DIN is provided.
3. Obtaining a digital signature certificate
A digital signature certificate is an electronic key given which verifies and confirms the holder of this certificate. It is possible to grant this certificate via one of the approved agencies registered with the Ministry. An application, proof of identity, and proof of permanent address must be given by the director of the company when applying for the Digital Signature Certificate.
4. Obtaining an Incorporation Certificate
The Ministry of Corporate Affairs issues a Certificate of Incorporation and uses it as proof for the establishment of the company. To register, the following things should be filled out on the Ministry of Digital Transactions’ official company website: e-Form 322 and e-Form 1.
A copy of each Memorandum and Articles of Association (MOA and AOA), the approval of the directors, and a stamped copy of the Power of Attorney must be given to the Registrar of Companies in accordance with Form 1.
Upon joining the company, a certificate of joining will be sent automatically to the e-mail ID with the information given along with the form.
5. Company seal preparation for official documents
In order to share certificates and other official documents, the business should be stamped on the paper. Depending on the number of seals issued and the time needed for seal delivery, the overall cost of acquiring an official seal must be interpreted. It should be noted here that the need for private companies to retain the company’s seal is not compulsory.
6. Company seal preparation for legal documents
In order to exchange certificates and other official records, the company needs to be stamped on paper. In terms of the number of seals and the time needed for the delivery of the seal, the overall cost of obtaining the official seal must be estimated. It should be noted here that the company seal is not necessary to be retained by private companies.
7. Obtain a permanent account number (PAN)
You must fill out Form 49A to apply for a PAN. But the original version of a PAN card will be issued to your registered address by an official post. PAN applications may also be made online, but it would still be necessary to physically submit the necessary documents for final verification. After the unique PAN has been issued, the next step would be to get a TAN.
8. Obtain Tax Account Number (TAN)
A Tax Deduction Account Number or Tax Collection Account Number (TAN) is a special number provided by the Income Tax Department to all institutions needed to deduct tax at source according to the Government of India.
Step 4. Tax Registration
You have a company registered, and the next step is to file for taxes.
Apply for registration under GST
For any individual wishing to supply goods and services in the States while retaining a total annual turnover of over INR 40 lakhs / 20 lakhs, GST registration is mandatory. Anyone who is under for new company registration should be given priority.
The minimum turnover in some of the northern states is 10lacs and GST registration is also required if you deal with import-export even within the states or if you have an e-commerce related company.
Get a Profession Tax Certificate from the office of State Profession Tax
Any employer (who is not a government official) is liable for taxes and must obtain a certificate from the authority concerned for registration. A business is required, if necessary, to file Form 1 only at the State Profession Tax Office to apply to the State Tax Office.
If you have an import-export business you also need to get import-export code registration done, in the same way, there are different types of tax called professional tax registration that you have to get if you live in those states.
Completing a National Employees Provident Fund Registration
Each employer is required to provide the local Employees Provident Fund Organization (EPFO) with its employee data. This should be achieved in a specified way such that the company can be assigned an Establishment Code Number (ECN).
This procedure is within the employer’s sole reach, and the workers do not need any separate application. Notice that this would only be appropriate if the provisions of the Employees Provident Fund and the 1952 Act on Miscellaneous Provisions apply to the company.
If you have more than 10 employees in your company, you have to register for employee state insurance, and if you have more than 20 employees, you have to get provident funds registration.
There is an optional MSME registration, which is not mandatory, but if you do it, you can get a lot of benefits.
It’s going to be easier for you to get bank loans, get some exemption plans for tax subsidies, and several advantages, so it’s nice to get it done.
Step 5. YEARLY COMPLIANCE
The first thing is income tax returns meaning that every corporation needs to file an income tax return at the end of the year. It is a mandatory annual compliance.
The second thing is the accounting and what you need to do, and I’d suggest you have to do it carefully.
You can employ an accountant for this, or you can do it yourself if your business is small.
You have to file GST if you are registered for GST, it has monthly or quarterly compliance.
Make In India
On September 25, 2014, Prime Minister Narendra Modi unveiled ‘Make In India’, a groundbreaking initiative in the history of the world’s largest democracy.
‘Make In India’ is a three-pronged project.
It encourages upscale performance from Indian producers and service providers to meet and meet worldwide expectations. ‘Make In India’ also promotes Indian entrepreneurship through incentives and offers to build micro, small and medium-sized companies.
What is Startup India?
Startup India is the Government of India’s flagship initiative aimed at creating a strong ecosystem that is conducive to start-up development, fostering sustainable economic growth, and generating large-scale employment opportunities. Through this initiative, the government aims to empower start-ups to expand through creativity and design.
After the launch of the initiative on January 16, 2016, by the Honourable Prime Minister, various initiatives have been undertaken to contribute to his mission of turning India into a nation of job creators rather than job seekers. The start-up culture has been catalyzed by these initiatives, with start-ups being recognized through the Startup India initiative, and many entrepreneurs benefiting from starting their own company in India.
Four key steps for registering a company/start-up in India:
Step 1: First of all, one must have a Digital Signature Certificate (DSC)
In order to maintain the security and originality of documents filed electronically, the Information Technology Act 2000 provides provisions for the use of digital signatures on documents submitted in electronic form.
Step 2: The next step is to get the Director Identification Number (DIN)
With the introduction of Sections 266A to 266G of the Companies (Amendment) Act, 2006, the requirement of a Director Identification Number (DIN) was enforced for the first time.
Step 3: Build an MCA portal account- New user registration @mca.gov.in
Step 4: Establish or request the registration of the company
About the Companies Act, 2013
On August 29, 2013, the Companies Act, passed by Parliament, received the approval of the President of India. This act consolidates and amends the laws pertaining to businesses. The Companies Act, 2013 was announced in the official gazette on August 30, 2013. The notification released on September 12, 2013, introduced some provisions of the Act. The provisions of the 1956 Companies Act are still in effect.
How complicated is it to do business in India? Start a business in India with very little capital and investment? Follow all the steps mentioned and start your own business without any issues. If you follow all the steps properly then you would not be facing any trouble to start any business in India.