“Chase the vision, not the money; the money will end up following you.”
–Tony Hsieh, Zappos CEO
The setting up of business in India can be a very impenetrable task if not researched about previously. It follows a step-by-step procedural formula in order to serve with respect & legality. The most primary step in this process is to focus on the variant government guidelines that should be taken into consideration from distinctive departments that hold importance; i.e. water, electricity, environment, etc. & executing registrations with duly required financial submissions.
The incorporation of business for start-up establishment can be done in the following five ways:-
One Person Company
This form of a company setup is more like a Sole Proprietorship where the founder beholds primary control & offers the benefit of limited liability. This form is perfect for a sole founder with the basic intention of inaugurating his/her idea in a rather processed & structured manner. It also gives the experience of conducting & administrating a private limited company.
Here, two or more people intend to operate & run the business in parallelism to the legal terms & conditions that encompass midst the Partnership Deed. The deed should be properly revised & printed on stamp paper in order to be levied upon. Following this, an application is to be formed and submitted to the registrar of firms of your respective state in order to get registered.
Sole Proprietorship Company
This type of business is the easiest to initiate, considering the fact that solely one person is to handle the company within 15 days minimum. It is also advisory to consider consultants who can assist you in managing legal affairs professionally & efficiently. Also, no separate registration is required for such a company.
Limited Liability Company
LLP or limited liability plan is a rather enhanced form of partnership companies & firms which enables limited liability to the partners involved with lesser compliance if compared to a private limited company.
Private Limited Company
This form of business is the most chosen alternative for a startup regardless its type & size. Here, scaling is done by formulating external funding in order to issue fresh equity shares in lieu of the funding attained.
Following are by degrees the steps involved in initiating & setting up a business in India, regardless the industry or company type:-
1. Retrieve a PAN Number from the Income tax Department
PAN stands for permanent account number that is a ten-digit alphanumeric number. It is issued by the Income Tax Department in the form of a laminated card.
2. Register your prospective company in order to incorporate a Public Limited or Private Limited Company.
3. Make sure that you open a Current Account with a renowned bank.
4. Enroll for registration of all Taxes that comprise under the GST
GST includes all the Central & State taxes that hold significance. For instance, service tax, VAT & Sales tax, service tax, excise duty, customs duty etc.
Service tax refers to a form of tax that is levied on the services provided. It solely focuses on the services itemized by the Central Government under the Finance Act of 1994. It is a type of an indirect tax that binds the service provider to pay the tax and recover the amount from the customer.
VAT stands for value-added tax, which is a multi-point destination based process of taxation where the tax is levied on value-addition in each stage of the transaction.
5. Shop & Establishment Act
This act provides a significant statutory obligation and rights to the employers & employees in the unorganized sectors of employment. However, in a state legislation each state has framed its own respective rules & conformities for the Act.
6. Don’t forget to Apply for TAN
TAN is essential for the entrepreneurs’ who intend on deducting tax or collecting at initial source on behalf of the Income Tax Department.
7. Employees Provident Fund
This refers to the establishments that employ 20 or more people and employ in a respective industry as notified under Section 6 of the EPF Act for legal initiation & functioning.
8. ESI Scheme
This act focuses on the non-seasonal factories that tend to employ 10 or more people.
For all the above schemes, management and setting up the procedures and processes as per the statutory compliance management system.
Henceforth, for further accounting & legal formality support, do not hesitate in seeking professional guidance from the Payroll Consultants at DKM Online.