How to Start a Business

To start a business in India you need to register your company. This can be quite a long drawn process. However it is very important to get your business registered.  Proper registration gives legitimacy to your business. It also keeps your documents clean which in turn prevents you from facing official hassles.

How to Start your Own Business?
The procedures needed to start a business in India are listed below

Step 1: Procure a Director Identification Number (DIN)
For this you need to fill a form online available with corporate affairs ministry at www.mca.gov.in. You will be issued a provisional DIN to immediately start off with your business. The duly filled form must be couriered to the ministry along with identity and address proof documents. Voter ID card, passport, PAN card, driving license card, electric bill, telephone bill, ration card etc will suffice. After the documents are verified a permanent DIN is issued within 4 weeks of application.

Step 2: Obtain a Digital Signature Certificate Online
For the new electronic filing system under MCA 21, it is essential for you to procure a Class-II Digital Signature Certificate.

You can get this from any one of the six private agencies authorized by MCA 21. One such reputed agency is Tata Consultancy Services. Even here you are required to submit the prescribed application form along with proof of identity and address. Fee to get this may vary from INR 400 to INR 2650.

Step 3: Register the Name of your Company with the Registrar of Companies (ROC) On-Line
It is important to get your company name approved electronically. You can check the availability of the desired company name on the MCA 21 Web site. You can provide a maximum of 6 suggested names. The names are checked for similar names with all other company names in India. The procedure is first cleared by the junior officer. Thereafter the name is sent to the senior officer for approval. Once approved, the name selected by you appears on the website. You must regularly consult the website to find out that one of your submitted names is approved. If the name is available it takes 2 days for obtaining a clearance.

Step 4: Stamp the Documents of your Company either at the Superintendent or an Authorized Bank
In order to obtain stamping permit, the documents must be accompanied by unsigned copies of the memorandum and articles of association and the payment receipt. The copies submitted to the Superintendent of Stamps or to the authorized bank for stamping must be unsigned and nothing hand written has to be done on it. After duly signing and embossing one of the copies which shows payment of the requisite stamp duty the superintendent returns the copies. The rate of stamp duty varies from state to state.

After being stamped, the articles and memorandum must be signed and dated by the company promoters. In your own handwriting you need to provide information about company name, its proposed activities and purpose, address, father’s name, occupation, and the number of shares subscribed.

Procedure 5: Form Filling Process
Form (a) e-form 1; (b) e-form 18; and (c) e-form 32 are to be electronically filled on the website of ministry of company affairs. Scanned copies of the consent of the initial directors, and stamped and signed form of the Memorandum and Articles of Association, must be attached to Form 1. The fee can be paid online by using a credit card or by cash payment at authorized banks.

Step 6: Make a Seal
You need to make a seal to issue share certificates and other documents.

Step 7: Obtain PAN (Permanent Account Number)
Obtain a PAN or permanent account number from National Securities Depository Services Limited (NSDL) or Unit Trust of India (UTI) Investors Services Ltd. The income tax act makes it mandatory to have this.

Step 8: Obtain TAN (Tax Account Number)
Obtain a tax account number for income taxes deducted at source from the Assessing Office in the Mumbai Income Tax Department. The application for TAN can be made either online TAN can be through the NSDL website www.tin-nsdl.com or offline.

Step 9: Register for VAT before the Sales Tax Officer of the Ward in Which the Company is Located
For this you need certified true copy of the memorandum and articles of association of the company, permanent residential address proof, copy of passport, copy of election photo identity card, copy of driving license, copy of property tax, copy of electricity bill, proof of place of business PAN card etc.

Step 10: Register for Profession Tax
It is mandatory for all employers to pay tax. And for this you have to obtain a certificate of registration from the prescribed authority. The company has to apply in Form I to the registering authority

Step 11: Register with Employees’ Provident Fund Organization
If you plan to employ 20 or more persons and plan to deal with any of the 183 Industries and classes of business in India you have to register with employees PF organization. You first have to fills an application where by you will be allotted a social security number.

Step 12: Register for Medical Insurance (ESIC)
With the help of this process every employer/factory and employee employed for wages are identified for medical insurance scheme. For this you have to fill and submit Form 01 for registration. You are responsible for submitting the required Declaration form.

If you meet all the above mentioned steps you can start and run a business smoothly in India.

19 thoughts on “How to Start a Business

  1. SUDESH Reply

    I am interested in form filling genuine jobs if any please revert back we have 25 pc and 45 people who are looking for desperate form filling jobs pleas do the needful if you have a project please email the details on my mail.

  2. Aby Thomas Reply

    Hello, I am thinking of starting my own business. i don’t have any employees with me, I am working alone only as a freelancer.
    What would be the best for me:

    1. To register a small business in India? or
    2. To register for becoming a proprietor?
    Can you please advise me.
    Regards
    ABY.

    • Scott Wilson Reply

      Mr. Thomas,
      If you are sure about your plan of business and its future, then you should register as small business firm or privet ltd. company.
      Other wise, you shousl register as proprietor, because there is a scope to take decisions weather to go further or nor depending upon the situation.
      I hope this answer clarifies your doubts.

  3. Bijith Reply

    Sir..
    I would like to start a small scale industry in kerala, based on rubber.Actually i dont have much idea about such a project ,I need your valuable guidence regarding..
    1. What product to make?
    2. Can i start with in Rs.10 lakhs?
    3. Can get any govt help for this project?
    4. What are the initial steps ?

    With greate expectations

    Yours faithfully

    Bijith RC

    • Scott Wilson Reply

      Mr. Bijith,
      There are many projects which you can study from the corporate libraries. There are many products which are in demand. For example rubber rings, machine belts, covers, tubes, tires, rubber products to industries etc.
      So you can take your call and chose any product line or multiple product lines for your business.
      As far as government help is concerned, the chances are less because it is rubber industry. You can get help from the banks and other financial institutes.
      Thank you.

  4. Gaurav Reply

    Hi,
    I am currently working in one IT company as a permanent employee. With this current job can I be a part of a new business? Will there be any legal concern if I continue with my Job and be a partner of a new business.

  5. manish Reply

    presently i am teaching successfully in coaching and want to open my own coaching in noida U.P. . Is it very necessary to register it first or is there any provision legally to start own coaching and if it were successful then register it later.

  6. dr.ashok hosamani Reply

    i want to start a small restorant in Belgaum city at Karnataka on my own
    finance base and before this i want to know the basic requirements and own building place please tell me in short….. thanks

  7. C H Reply

    Hi, I have a small industry of honey. I am doing OK locally but I would like to enter international market. So kindly let me know how I can approach international clients for my products. Thanking you in anticipation.

  8. A N Reply

    Dear Sir, I am planning to start a business in India, but I have a concern that, do I need to buy or rent a registered office before I register my business for permanent business address? Please advice.

  9. M K Reply

    Respected Friends, I want to start my company, but it need huge amount of investment, so I am thinking to start a public limited company and want to raise funds from market by issuing shares to people, Can you guide me to how to start a public limited company?

    • S T Reply

      Hello, I am a 40yr old insurance branch manager with almost 15yrs of pharma sales management and 3 yrs insurance sales experience. Want to start some small and low investment business asap. Could you help me with suitable ideas?

  10. LV Reply

    Hello sir,
    I have a business of auto parts and I want to give a different entity to it so that my product or company can be easily identified. Please tell me which types of entities are there like trademark, logo, patent and which should be register first so that I can develop my business without any hurdle.

  11. PC Reply

    Hello Sir,
    I am a retd prof in engg.mgmt and have lots of time. I intend to start a service company on improving the energy conservaion technicques in fleets of trucks and buses. I would like to be a consultant and how to go about advertising and getting calls. If any BE mech fresher is interested to join me, I will take him as a trainee and teach him EC techniques.
    Thank you.

  12. VN Reply

    Hi,
    I wish to start an online apparel business. Are all of the items mentioned in the article applicable? What are the other legal requirements, since I would be selling all over the globe? (in terms of excise, customs etc.)

    Thank You

    • Scott Wilson Reply

      VN,
      You need to have an export license and a permission from ECGC. For further information on export, you can read a page on export business on the same website. Just search in the tab and you will get the page. If you have any more doubt then after, you can ask your questions here.
      Thank you.

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