BUSINESS SETUP IN INDIA

Starting a business in India has become much easier over the years, thanks to the introduction of various policies and initiatives from the government. There are various steps that need to be followed in order to set up a business successfully in India.

Entrepreneurial aspirations among youngsters are rising along with the growing middle class in India. Technology has opened up numerous business opportunities and made starting and managing a business easier. Therefore, it is more rewarding than any other time to start a business in India. In this article, we look at how to start a business in India.

Choosing a Business

Prior to starting a business, the Entrepreneur must have a vision for the proposed business. A vision could be as simple as a plan of action to starting a business in the mind of the Entrepreneur or could even be a detailed business plan with market analysis, projected financial statement, etc., Detailed business plans will help the Entrepreneur avoid mistakes and increase the chances of succeeding in the business. In case the Entrepreneur doesn’t have any preconceived business idea, he or she can research online for business ideas.

Business Entity Registration

The first step in starting a business in India is deciding and choosing a business entity. There are many options available for setting up business in India. Same are mentioned as under: 

Options are classified in 2 gorups available for foreign entity for set up business in India i.e in form of either incorporated entities or unincorporated entities.

· Unincorporated Entities: Sole Proprietorship & Partnership.

· Incorporated Entities: One Person Companies, Private Limited Companies, Limited liability partnerships, etc..

Bank Account Opening

Opening a bank account in the name of the business is one of the first tasks to be completed after incorporation of the business entity. Corporate entities like LLP, Private Limited Company, One Person Company and Limited Company are allowed to open a bank account in India by submitting a copy of the Certificate of Incorporation and PAN Card of the entity. On the other hand, opening a bank account in the name of the business for a Proprietorship entity could be more cumbersome – as one or more tax registrations may be required to establish the identity of the proprietorship business or for partnership.

Tax Registration

Based on the type of activity proposed by the business or vendor criterion or customer requirements, various tax registrations may be required for the business, as follows:

• GST Registration: GST registration is mandatory for any person or entity if the turnover is over Rs.20 lakhs in most states.
• TAN Registration: TAN Registration is mandatory for tax deduction at source (TDS). Therefore, TAN Registration may be required while hiring employees or dealing with certain customers or vendors.
• EPFO & ESI Registration: ESI Registration will be mandatory when the number of employees in the business crosses 20. Proof of ESI Registration is often requested by businesses that outsource manpower requirements.