Intelligent minds brimming with innovative ideas may be keen to start a small business in India but there are many problems in their paths right from the issue of funding to ignorance about the procedure involved in the registration of such an entity. This guide will try to list all the formalities required by an entrepreneur to complete in order to begin a venture.
Type of Business
In our country a small business institution may be categorized into the following types:
2.One Person Company
3.Limited Liability Partnership
6.Non-Banking Financial Corporation
7.Joint Hindu Family Business
The most important decision before moving towards the registration process is to decide the nature of your company from the above list.
- Digital Signature Certificates (DSC)
Office of Controller of Certifying Authorities (CCA) issues the certificates to Certifying Authorities (CA) who in turn provide it to the end-user who can apply for any of the three DSC types based on their needs.
- Direct Identification Number (DIN)
This 8 digit number, allotted by the MCA to the director of a company has to be mentioned by him under his signature on any legal document. Permanent Account Number (PAN) is mandatory for applicants and a scanned copy of it has to be submitted with photographs and copies of voter ID card/ driving license/ utility bill.
- Registration of Company
The whole process can be done by filing a detailed form known as INC-29 and starts with getting the enterprise’s name approved. The desired name’s availability can be checked on the mca.gov.in website and the trademark can be checked on ipindia.nic.com while ensuring that the first its first half is unique and the second depicts your business sector.
The Memorandum of Association (MoA) listing the establishment details like its office location, shareholding pattern and the object of the enterprise along with the Articles of Association specifying the rules and regulations governing the venture has to be submitted.
The details of the registered office also need to be provided with a copy of the Rent Agreement, if the property is leased from someone else or the sale deed if it is owned.
A number of self-attested copies of documents have to be submitted with the Company Secretary engaged to fill the form giving a declaration claiming all information provided by the applicant to be authentic.
INC-29 can be submitted online with all the required attachments and the fees can be paid the same way via a payment gateway and on acceptance, the Registrar of Companies will grant the Incorporation letter.
- Permanent Account Number (PAN)
It is compulsory for all commercial undertakings operating in the nation and can be obtained from an IT department outsourced agency like National Securities Depository Ltd.(NSDL) by filling Form 49A.
- MSME Aadhar
An enrolment programme for Micro, Small and Medium Enterprises (MSME) and Small Scale Industries (SSI) called the Udyog Aadhar with an eye on helping an individual looking to start a small business in India has been introduced which if successfully applied for entitles the applicant for all government scheme benefits like low rate of interests for loans, subsidies and financial support for foreign trade show participation.
- Tax Deduction & Collection Account Number (TAN)
This 10 digit number is required by those organizations which are supposed to pay tax deducted at source (TDS) and can be obtained like the PAN from NSDL.
- Shops and Establishments Act License
The Department of Labour oversees the implementation of this law which governs the working conditions and the rights of workers in the unorganized sector and is promulgated by every state requiring all sorts of commercial establishments to register themselves by applying to the labor department of their state.
- Goods and Services Tax (GST)
This has to be done in each state separately if the operations are in more than one state even when the name and PAN details are same. The process may seem cumbersome but is beneficial as it requires the paying of a single tax instead of multiple ones like VAT and service tax in some cases.
- Professional Tax
All enterprises have to get this procedure done by applying to their respective state tax authorities within 30 days of employing personnel.
- EPF & ESIC
Any entity hiring more than 20 persons has to enroll with Employee Provident Fund and any facility having 10 or more members of staff must obtain the Employee State Insurance Corporation (ESIC) registration.
- Other Registrations
In addition to this, as per the nature of the business, a few more authorizations are needed like:
Pollution Control Board No Objection Certificate: For potentially polluting industries
FSSAI Registration: Needed by food-related services
Importer Exporter Code: 10 digit number for any type of foreign trade
Customs Duty: Not required by all and therefore has to be checked with the corresponding authority, the Central Board of Excise & Customs (CBEC)
Just because of the complexities involved a prospective entrepreneur may hesitate to start a small business in India as it may seem to be an unmanageable task but with this information in hand, any person will feel confident in moving ahead with his plans.
George Dille is a Business Expert by profession who provides company registration services in India at BusinessVenturesIndia Ltd. He has vast experience in creative and technical writing. You can follow her company on various social networks like Twitter, Facebook, and GooglePlus.