India Business Setup Guide
Introduction
A business (also called a Company, LLP, Firm and Enterprise) is a legal or‐ ganization designed to provide goods and/or services to consumers in order to earn profits and acquire wealth. Entrepreneur is an ambitious leader who organize resources to often create and market new goods or services. Entre‐ preneur is prepared to take risk and face challenges. Invention and risk tak‐ ing is the twin qualities of an entrepreneur. An entrepreneur before finalizing his business plan should have an under‐ standing about business forms and laws governing the business such as regulatory compliances, taxation etc. What CompaniesInn do for new business start up in India? 1. Guide for selecting the business form 2. Incorporation and basic registrations 3. Basics of tax laws 4. Basic of Regulatory Requirements
A study conducted by CompaniesInn revealed that many business fails not for the reason of their business model, but for the reason of improper start up and non compli‐ ance with regulatory re‐ quirements.
The success mantra in any business is selection of right business struc‐ ture, and compliance
Business Forms in India
Business forms available for new entrepreneurs in India are, Limited Liability Partnership (LLP), Lim‐ ited Company, Sole Proprietorship and Partnership. LLPs and Companies are incorporated business forms and Proprietorship and Partnership are unincorporated business forms
Limited Liability Partnership (LLP)
Limited Liability Partnerships (LLPs) are incorporated business forms. It is a Body Corporate having the features of a Partnership Firm and a Company. The management of LLP is defined by LLP agreement and partners have the freedom to regulate affairs of the LLP. Minimum two persons are required to form a LLP and there is no restriction regarding maximum number of members.
LLP & Company Are the Incorporated Business Forms in India. Limited Company
It is the oldest form of incorporated business in India. A company is a legal entity that is separate from its owners, the shareholders. No member of a company is personally liable for the debts, obligations or acts of the company, except under special circumstances such as the number of members falls below the required minimum number. This type of business organizations are incorporated under the Companies Act, 1956 by respective Registrar of Companies (ROC) in each state of India. In India two type of companies available for registration. Private Limited Company and Public Limited Company. Private Limited Companies are which limits its number of members to 50, restrict share transfer, prohibits public issue of shares etc. The minimum number of persons required to form a pri‐ vate limited company is two.
Sole Proprietorship
It is the oldest form of business in the world. It is nothing but a person doing his business either in his name or some other name. Examples of such business are small glossary shops or vegetable shops. This is the simplest way to set up a business and sole proprietor is completely responsible for all debts and obligations related to his or her business. A creditor with a claim against a sole proprietor would nor‐ mally have a right against all of his or her assets, whether business or personal. This is known as unlim‐ ited liability.
Sole Proprietorship & Partnership are unincorporated Business Forms. These business form have the risk of Unlimited Liability Partnership
A partnership is an agreement in which two or more persons combine their resources in a business with a view to make profit. Partnership is an unincorporated form of business. It is an association of persons pooling resources for business. Partners share the profits according to the terms of the agreement. There is no compulsion to register a partnership agreement
How to decide right business Structure?
The decision is primarily based on your business plan. The following question will answer your choice S.N Question Yes No 1 Do you want to protect your personal assets against business risk? 2 Whether your business is into selling products to other businesses, public or you invite customers to your office? 3 Do you have investors or partners? Will you manage your business or will it be managed by some profes‐ 4 sional manager? 5 Do you want to raise capital from investors? 6 Looking to improve creditability of your business? 7 Is less taxation is your priority? If majority of answers are yes, go for Company/LLP business From. The answer to the question 7 is yes, go for LLP
Majority of the New Entrepreneurs select LLP or Company Form of Business. Rest of this guide covers, registration process of these two business forms
Other Registration Required for Company/LLP Business Forms
Permanent Account Number (PAN).
This is a unique number issued by Income Tax department to Company/LLP for tax filing. This number is mandatory for doing business in incorporated business.
TAN (Tax Account Number)
This number is issued by Income tax department for filing of Tax Deducted at Source (TDS). Many of the transactions requires deduction of tax at source and this number is required for proper compliance.
Service Tax Registration
If the company/LLP provides taxable services, collection of services tax is compulsory. Such service pro‐ vider shall register and obtain Service Tax Registration.
Value Added Tax
Value Added Tax and Central Sales tax registration is compulsory for Companies/LLPs dealing in tax‐ able goods. It is a state matter and if Companies/LLPs deals locally in different states, separate registra‐ tions are required for each state.
Import Export Code
Import and Export Code number is compulsory for companies/LLPs planning for import and export of goods.
Shops & Establishment Registration
A statement containing the employer’s and manager’s name and the establishment’s name (if any), postal address, and category must be sent to the local shop inspector with the applicable fees. New Business Forms shall register with in 30 days from the date on which the it commences its operation.
Professional Tax
Every employer (Company/LLP) shall register with prescribed authorities and pay professional tax on yearly basis. Employee registration is also required in some cases and professional tax needs to be paid to local government .
CompaniesInn Business Setup Group will help you in other Regula‐ tory Registration and compliance.
CompaniesInn Business Setup Service
CompaniesInn (CN) is the First business setup service company in India. We have two unique model of operation for Company Incorporation and LLP Incorporation.
Online Company or LLP Incorporation
Visit our web site www.companesinn.com. In the home page you will get two options, LLP Registration and Company Registration. Click any of these links and place an order for registration. You can also opt for others Business Set up services.
Once your order is confirmed and order amount is credited into our account, CompaniesInn Business Setup team will be in touch with you for necessary guidance and documentation. They will ensure your company will be registered in time.
Offline Company or LLP Incorporation
If you do not have the time and patience to place an order. Take a print out of the order form (see next page), fill it and courier it to our address (see below)
Business Simplified
Simples Steps ‐ Company/LLP Incorporation
DIN/DPIN Email the address proof and identity proof of the proposed Directors/Designated Partners. Our Email Id is
[email protected] NAME FILING Select an appropriate name for your business. [Please note that approval of name is subject to MCA guidelines and at the discretion of Registrar. Read name guidelines in our website] EXECUTION OF DOCUMENTS AND REGISTRATION Immediately on approval of name, we will mail/courier the registration documents for your signature. Execute documents as per our guidelines and mail/courier it to us for filing. Usually in 2 to 3 days your Company/LLP will be registered.
Incorporation Simplified
CompaniesInn.com India Private Limited
# 48, 2nd Block | Opp. Kendriya Sadan | Koramangala | Bangalore—560 034 Tel +91 80 25501860, 25501861, 25501862
[email protected] www.companiesinn.com
ORDER FORM
India Business Incorporation
Notes
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Please produce separate documents to evidence proof of identity and proof of address (the only exception being a valid passport, which will be accepted as both proof of identity and proof of address) for each pro‐ posed Director/Designated Partners Please fill the form in capital letters Please provide correct information Please give full information as per page 4 if directors are not promoters For service charges and tariffs, please visit www.companiesinn.com or call +91 96633 29656
Business Form Options
Private Limited Company Limited Liability Partnership
Business Form
Company Incorporation
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Minimum 2 persons as Directors and Shareholders. Director should be a natural person. He need to be a shareholder. Simple Process 1. Apply for DIN (Director Identification Number 2. Apply for name 3. Execute Incorporation documents 4. File all documents and get company registered 5. Apply for PAN (Tax number) and open Bank account 6. Company is ready to function
Requirements
Completed Application
Passport size photograph (2 numbers) for minimum 2 proposed Directors/ Designated Partners Any ONE Document to evidence Proof of Identity (List A) and Proof of Address (List B) from each proposed Director/ Designated partner
LLP Incorporation
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Minimum 2 partners and Designated partners. Designated Part‐ ner shall be a partner Simple Process 1. Apply for DPIN (Designated Partner Identification Number) 2. Apply for name 3. Execute incorporation documents 4. File and register LLP 5. Execute LLP agreement & file 6. File consent to act as a partner/designated partner 7. Apply for PAN (Tax number) and open Bank account 8. LLP is ready for function
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List A
Passport Voterʹs ID Driving License Photo PAN Card
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List B
Passport Voterʹs ID Driving License Life Insurance Policy Electricity Bill Telephone (Land/Mobile) Bill Bank Account Statement
Contact Info:
Client Name
Telephone No
Email ID
Basic information of the proposed Company/LLP
Name
Read name guidelines in www.companiesinn.com before selecting the name of your proposed Company/LLP. For easy process, please give 7 names in the order of preference. Read the name guidelines in www.companiesinn.com
Registered Office Address
Every Company/LLP is registered with an address of your choice. Please note that address can be any place sup‐ ported by an address proof. Address Line 1
Address line 2
City
District
State
Pin Code
Email ID
Address of the Police Station
Name of the PS
Address Line 1
City State Pin Code
Objects of the Proposed Company/LLP
Brief about your company’s/LLP’s objects.
Directors and Other Information
Directors/Designated Partners
• Minimum two persons [ for more persons add separate sheet] • Valid Address Proof and Identity Proof (see 1st page of this order form) • Please give full information (as per Identity Proof & Address Proof) * for Public Company, please ensure to have the details of 7 shareholders and 3 directors Name and Fathers’ name of the first Proposed Director/Designated Partner
Name Fathers Name Email Id
First Name*
Middle Name
Last Name*
First Name*
Middle Name
Last Name*
Name and Fathers’ name of the 2nd Proposed Director/Designated Partner
Name Fathers Name Email Id
First Name*
Middle Name
Last Name*
First Name*
Middle Name
Last Name*
Whether the above Directors/Designated Partners are the first shareholders/partners in the proposed Co./LLP Yes/No Other Services (Please tick ) PAN /TAN services Company Kit Service Tax Registration Shop & Establishment IE Code VAT Professional Tax
Please confirm the service charges from www.companiesinn.com before finalising the order. Our charge are inclusive of all fees and taxes.
I hereby confirm that the information and documents provided to CompaniesInn.com India Private Limited (CN) are for registration of a Company/LLP for doing lawful business and information provided are correct. I also agree to pay CN all service charges as agreed on time and provide additional information as may be required for registration. Name of the Client & signature
Date Place
Address
CompaniesInn.com India Private Limited
# 48, 2nd Block | Opp. Kendriya Sadan | Koramangala, Bangalore—560 034 Tel +91 80 25501860, 25501861, 25501862
[email protected]