SMALL BUSINESS REGISTRATION GUIDELINES & PROCEDURES TO START A BUSINESS IN INDIA FOR BEGINNERS
The objective of crafting this article is to provide information about small business registration procedures in India to the entrepreneurs. Regardless you are starting a business in manufacturing, retailing or service providing, you must register your business. However, there are different Govt authority for specific types of licensing needs. Even dealing with the same product with a different business model may attract different licensing procedures. However, there are some basic requirements that are common to everyone.
Small business registration is the first step of initiating any type of business. However, the most important consideration is selecting the right form of organization. In India, you can for 8 types of business organization. Those are:
1. Sole Proprietorship Company
2. One Person Company
3. Limited Liability Partnership
4. Private Limited Company
5. Public Limited Company
6. Non-Banking Financial Corporation
7. Joint Hindu Family Business
8. And Co-operative Organization
However, each and every entity have specific advantages and limitations both. Choose a proprietorship firm as a service providing startup. Choose partnership firm when you have partners and all want to continue their jobs in other companies. And want to just test their business ideas. You can go for Private Limited Company when you want to start a long term business. And your idea is already tested as trial and looking for the funding. Furthermore, when your small business registration budget is less than 10000 Go for LLP. However, with this entity you can enjoy all the company features with ROC. Finally, you can form OPC, when you are a single owner and want to enjoy the corporate features. In conclusion, this is the most crucial step in small business registration for new entrepreneurs.
STEP-BY-STEP PROCESS OF SMALL BUSINESS REGISTRATION
OBTAIN DIGITAL SIGNATURE
This is the first step. You can use the digital signature in India for various online transactions. It includes Income Tax E-Filing, Company or LLP Incorporation, Filing Annual Return, E-Tenders, etc. There are three types of digital signatures. However, you will need to apply for Class II.
OBTAIN DIRECTOR IDENTIFICATION NUMBER (DIN)
This is a simple one day process. In addition, you can apply for DIN online. PAN number is mandatory for Indian citizen and Passport is mandatory for foreign national. You can get a provisional DIN number immediately.
SECURE YOUR COMPANY NAME
In the form INC-29 you have an option of giving a single name for your company. However, you can check before if there is already an entity with the same name.
CRAFT MEMORANDUM AND ARTICLES OF ASSOCIATION
You will need to attach the Memorandum of Association (MoA) and Articles of Association (AoA) with the INC-29. However, it is a very important internal document. Thus you need to pay keen attention in crafting this document. Some of the important aspects are Main Object, Share Participation, Authorized Capital, Registered Office etc.
FILE INC-29 & GET THE INCORPORATION LETTER
This is a one-day procedure. However, you will need to attach several documents. Ensure that you have all the document ready. Any sort of error leads to a resubmission of this form. In addition, the filing of the single INC-29 form will grant you the incorporation certificate from the ROC.
OBTAIN PERMANENT ACCOUNT NUMBER
Obtain a Permanent Account Number (PAN) from an authorized franchise or agent appointed by the National Securities Depository Ltd. (NSDL) or the Unit Trust of India (UTI) Investors Services Ltd., as outsourced by the Income Tax Department (National)
OPEN A CURRENT ACCOUNT
Now you can open a current account in the bank. Furthermore, it is important to get the other licenses from the different authority. However, choose a nearby bank. And choose account type carefully.
OBTAIN MSME UDYOG AADHAAR REGISTRATION
This is a simple process of getting SSI or MSME registration. Furthermore, you can apply it online now. This one page Udyog Aadhaar Memorandum is an initiative of MSME Ministry Govt. of India. In addition, the objective is to simplify the registration process for entrepreneurs and promoting ease of doing business.
OBTAIN TAN NUMBER
First of all, this is important for Tax payment. However, you can obtain this from the Assessing Office of Income Tax Department of your state.
OBTAIN SERVICE TAX REGISTRATION
Service tax is, as the name suggests, a tax on Services. In addition, Service Tax registration number is mandatory for any person or entity providing taxable services of over Rs.9 lakh. Furthermore, you can pay the tax either by manually depositing in the bank or by online payment.