The First Steps to doing Business in India

Setting up a business entity in India depending on the requirements and circumstances , various types of business entities can be established in India .

We will explain the process step by step , step .

One , the first step is to decide on the type of business entity .

The registration procedure and associated legal requirements depends on the type of business .

We will explain various types of common businesses now , types of business entities .

One proprietorship is one of the simplest forms of business entity to register and maintain in India , a startup with a single owner on a small scale might choose this type of business .

There is no formal proprietorship registration to start a proprietorship only pin number for the proprietor is required along with a bank account in the name of the proprietorship .

Two partnership , the objective of a partnership firm is to pull together people so that more capital , skills and efforts can be brought together .

At least two members are required to start a partnership business to register such business .

One needs a partnership deed which is duly notarized through a notary three limited liability partnership .

L LP is a partnership firm that has its own legal standing .

The liability of the partners in an L LP is limited to the investments and therefore , it is called a limited liability partnership .

L LP is governed by the provisions of the L LP Act 2008 .

The registration of L LP is done through registrar of companies that is R O C first , the partners need to register at R O C and get designated partner identification number .

And thereafter they can apply for registration of L LP online .

Four , a private limited company is similar to L LP and is a separate legal entity from its directors and owners being more complex .

A private limited company is established only when the business grows significantly .

Or if a business involves significant capital and efforts , limited companies are governed by the provisions of the Companies Act 2013 .

The directors of the company need to register and obtain directors identification number that is D I N and then the application for registration of company may be applied online at R O C website .

51 person company is similar to a limited company , only one person is required who can be a shareholder as well as the director of the company new concept in India , which has been introduced by the Companies Act 2013 and is useful for small companies with less than ₹50 lakh annual turnover .

Six A registered society is managed by a governing body answerable to each other .

The donors and the Registrar of societies are informed on decisions made by the governing body .

It is registered under society's registration act .

18 60 seven Trust enables the transfer of ownership from the first person to a second person for the benefit of a third person .

It is governed by a board of trustees .

Private trusts are registered under the Indian Trusts Act .

18 82 Hindu undivided family H U F consists of persons linearly descendant from a common ancestor .

H U F is governed by the provisions of Hindu law .

A business entity can be registered as an H U F as well .

Now that we know the different types of businesses in India , we may choose the one that suits us the most and move to the next step .

Step two , one needs to identify what nature of the business the firm registered in step one would conduct from export , import perspective .

One can choose any one of the options manufacturer .

A manufacturer has a unit which takes in raw materials and processes them to create finished goods as per the foreign trade policy .

Manufacture includes processes such as refrigeration , rep , packing , polishing , labeling , reconditioning , repair , remaking , refurbishing testing , calibration , reengineering for manufacturers .

The moment your turnover crosses a certain threshold , one has to pay excise duty before the goods can leave the factory gate for the sake of paying excise duty .

A central excise registration certificate has to be obtained .

In addition , other registrations such as W T industrial license , pollution control , fire safety and such might be applicable depending on the nature and type of manufacturing activities .

Merchant merchants do not have their own manufacturing .

Set up .

Merchants buy goods from a manufacturer or another merchant and then sell the goods to customers or other merchants or manufacturers in India or abroad .

Both merchants and manufacturers are allowed to carry on export , import businesses in India .

Merchants too need to register with applicable agencies like state commercial tax department , merchant guilds , et cetera .

Service provider , services provider provides intangibles like consultancy services I T services B P O services , et cetera .

All service providers need to register with service tax department and pay service tax as applicable once the turnover crosses a certain threshold .

In addition , they may also register with various service sector associations such as Nasco , et cetera .

Yeah , step three value added tax vat registration is a tax registration required for businesses trading or manufacturing goods in India that is collected and governed by the state government .

Vat registration is mandatory if turnover is about five or ₹10 lakh depending on the state summary to recap this video , one needs to first decide on the type of business entity depending on the size scale and requirements .

As explained in step one , then one needs to register the business entity as detailed in step one and step two thereafter , depending on the type of business and turnover .

One has to check whether they are required to get their excise service tax and vat registration done .

one may refer to the websites of Ministry of Corporate Affairs triple W dot mc A dot G O V dot I N for more details on registrations at step one , one may refer website of Central board of excise and Customs triple W dot C B E C dot G O V dot I N as well as state commercial tax department .

For more details on step two and step three registrations .

In case of any doubt , your Banu is available for help .