Here we are discuss on how to start business in India various Form of business registration in India, select the choice of your business in India on the basis of legal entity, taxability, annual compliance, time limit.
HOW TO START BUSINESS IN INDIA
For start a business in India take the business registration in India, After taking the business registration in India take tax registration in India.
PROCEDURE FOR BUSINESS REGISTRATION IN INDIA –
There are various form of business in India select any form of business as per your requirements and start your business in India.
I Formation Of Sole Proprietorship –
Sole Proprietorship is very easy and less expensive way to start your business, foreign national cannot form a sole proprietorship business.
Registration of Sole Proprietorship – If you want to start a sole proprietorship business get any one registration certificate Gumastha or Professional tax registration in the name of your business. There is no need to apply for PAN CARD as Pan Card of Individual act as a Sole Proprietorship Pan card. After getting the registration certificate you can open a current account with bank in the name of your sole proprietorship business.
Time limit for Sole Proprietorship – It will take 5-7 working days to start sole proprietorship business.
Annual Compliance for Proprietorship Concern – There is no annual compliance for a sole proprietorship concern, At the time of filing his Personal Annual Income Tax Return, Individual should considered the profit and loss of that Proprietorship Concern.
II Formation Of Hindu Undivided Family(HUF)
An HUF is an separate entity of taxation under Income tax Act 1961. Buddhist, Jain and Sikhs can form an HUF.
Creation of HUF – An HUF is created as and when you get married. If you want to register an HUF prepare an HUF Deed, after creating a deed apply for a Pan card. After getting the PAN CARD of an HUF you can open a current account with bank in the name of your HUF.
III Formation of Partnership firm –
If you want to start your business with two or more than two persons, than you can start your business under the head Partnership Firm, but in partnership firm maximum number of partner will be 20 persons. Foreign national cannot form a partnership firm business.
Registration of Partnership Firm: For registration of your Partnership firm, first you have to make a partnership deed. After that you have to apply for PAN No. in the name of your partnership firm. Registration of deed with Registrar of Firm (ROF) is not compulsory. For Registration of deed with Registrar of Firm you can access at here Partnership firm registration After getting the partnership deed and PAN CARD you can open a current account with bank in the name of your business.
Time limit for Partnership Firm – It will take 15-20 working days to start a Partnership Firm.
Annual Compliance – A Partnership firm should file the Annual Income tax return (IT3).
IV Formation of Limited Liability Partnership (LLP) –
If you want to form a separate Legal Entity than Form a LLP there should be a minimum two designated partners, there is no maximum numbers of partner in LLP. Foreign National can form a Limited Liability Partnership. LLP is separate Legal Entity.
Registration: It is compulsory to register a LLP at Registrar of Companies. A limited liability partnership firm can be formed by registering the company name with appropriate Registrar of Companies (ROC). After getting a certificate of incorporation apply for Pan Card in the name of LLP. After getting the PAN CARD and Certificate of Incorporation you can open a current account with bank in the name of your business.
Time limit for LLP – It will take 30-40 working days to start a Limited Liability Partnership firm.
Annual Compliance of LLP – An LLP should file the Annual Income tax return (IT3), Annual Return in ROC.
V Private Limited Company –
If you want to form a separate Legal Entity than Form a Private limited company, there is a minimum one director and maximum 200 hundred members in private limited company the personal liability of the shareholders is limited to their share capital. Venture Capital investors prefer to invest in businesses that are Private Limited Company since it allows great degree of separation between ownership and operations. It also allows investors to exit the company by selling shares without being liable for company affairs
Registration of Private Limited Company: A private limited company can be formed by registering the company name with appropriate Registrar of Companies (ROC).
Time limit – It will take 30-40 working days to start a Limited Liability Partnership firm.
Annual Compliance – Private Limited Company has more compliance burden when compared to a Partnership and LLP. Like Board meetings of Directors at every quarter and at least one annual general meeting of Shareholders and Directors. Accounts of the company must be prepared in accordance with Income Tax Act as well as Companies Act.
VI Public Limited Company –
Public Limited Company is similar to Private Limited Company with the difference being that number of shareholders of a Public Limited Company can be unlimited with a minimum seven members. A Public Limited Company can be either listed in a stock exchange or remain unlisted. A Listed Public Limited Company allows shareholders of the company to trade its shares freely on the stock exchange
Registration of Private Limited Company: A private limited company can be formed by registering the company name with appropriate Registrar of Companies (ROC). For Listing the company registered the company at stock exchange.