Starting a business in India involves various legal procedures and registrations. Here are the steps involved in the process:
- Decide the type of business entity: The type of business entity you choose will depend on factors such as the number of owners, the scale of the business, the amount of capital you plan to invest, and the liability you are willing to assume. For example, a sole proprietorship is suitable for a small business with a single owner, while a private limited company is ideal for a larger business with multiple owners.
- Obtain Digital Signature Certificate (DSC) and Director Identification Number (DIN): A Digital Signature Certificate (DSC) is required for filing online forms and documents with various government agencies, while a Director Identification Number (DIN) is a unique identification number issued to the proposed directors of the company. You can obtain these certificates by submitting an application to a government-approved agency.
- Reserve a unique name: The name of the company needs to be unique and not identical or similar to an existing company or trademark. You can check the availability of the name on the MCA portal and reserve it by filing Form INC-1 along with the necessary fees.
- File incorporation documents: Once the name is approved, you need to file the incorporation documents with the Registrar of Companies (ROC) within 20 days of name approval. The documents include Memorandum of Association (MOA), Articles of Association (AOA), Form INC-32 (for online filing of company registration), Form INC-33 (for e-memorandum of association), and Form INC-34 (for e-articles of association).
- Obtain PAN and TAN: After incorporation, you need to apply for a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) from the Income Tax Department. These are required for opening a bank account, filing income tax returns, and deducting and depositing TDS.
- Register for Goods and Services Tax (GST): If your business involves the supply of goods or services with an annual turnover exceeding Rs. 20 lakhs (Rs. 10 lakhs for Northeastern and hilly states), you need to register for GST. You can register online on the GST portal by submitting the required documents.
- Register for other licenses: Depending on the nature of the business, you may need to obtain other licenses such as a trade license from the local municipal corporation, FSSAI license (for food-related businesses), and Shop and Establishment license from the state government.
- Open a bank account: Once all the registrations are completed, you need to open a bank account in the name of the company. You need to provide the PAN, TAN, and other relevant documents to the bank.
It is important to note that the legal procedures for starting a business in India may vary depending on the type of business entity and the nature of the business. It is advisable to seek professional help from a lawyer or a chartered accountant to ensure compliance with all the legal requirements.
