"To enjoy life, we must touch much of it lightly."
The ease of doing business in India has improved notably, according to a new report from the World Bank. A series of reforms have made it easier for companies to obtain construction permits, trade across borders and pay taxes. India has jumped 23 spots from last year and now ranks 77 out of 190 countries on the list. It is also among the top 10 most improved economies, which is exciting news indeed.
For any entrepreneur, starting a business is not a cup of tea. It takes a lot of passion, determination and the most important thing, registration. Whether you are starting a business in manufacturing, retailing or service providing, small business registration is the first step before starting out.
Especially for small businesses, registration is vital. For this, first you have to choose the right form of organization. In India, there are 8 types of business organizations that you must select based on your business goals.
Registration may seem like a long, exhausting process and a lot of people are often confused about what documents are required or what exactly the whole process entails.
So to make things a little clearer, here is the step by step process of small business registration and exactly which documents are required –
1. Obtain Digital Signature –
This is the first step of registration. It is an identity of any business. You can use this digital signature in India for many online transactions. It includes filing annual return, income tax e-filing, e-tenders, etc.
2. Get your Director Identification Number (DIN) –
This is a unique 8 digit number which is required for any existing or proposed Director of a company. It is an easy, one day process and you can even apply for it online.
3. Secure your Company Name –
Giving a name to your company and securing it right away is extremely important, without a doubt. There is a form called INC-29 in which you have the option of giving a single name for your company. You can also check if there is already a business or entity having the same name.
4. Prepare the Memorandum and Articles of Association –
These two documents have to be attached with the INC-29 form. They are very important so you will have to make these documents very carefully. Some important aspects of it are Main Object, Authorized Capital, Share Participation, Registered Office, etc.
5. File the INC-29 and get the Incorporation Letter –
Although you will need several documents for this, it is a one day process. Any kind of error leads to resubmission of this form. Filing of the single INC-29 form will grant you the incorporation certificate.
6. Obtain the Permanent Account Number –
This is the most important document without which any kind of business registration is not possible. You can obtain it from an authorized franchise or agent appointed by the NSDL or the UTI, as outsourced by the Income Tax Department.
7. Open a Current Account –
You can open a current account from any nearby bank. Make sure to choose the account type carefully.
8. Get MSME Udyog Aadhaar Registration –
This is a simple process and you can apply for it online as well. The Udyog Aadhaar Memorandum is an initiative of MSME Ministry Govt. of India. Its main objective is to simplify the registration process for entrepreneurs and to promote ease of doing business.
9. Obtain your TAN Number –
This number is important for tax payment. You can get it from the Assessing Office of the Income Tax Department of your state.
10. Service Tax Registration –
This, as the name suggests, is a tax on services. It used to be mandatory, but after the GST was initiated, it has become obsolete.
11. Obtain Shops & Establishments Act
Every shop and establishment comes under the Act within 30 days of commencement of work, whether or not it has employees.
12. Get GST Registration –
Every existing and new business needs to get this done. But under the GST Regime, businesses with a turnover of less than Rs 40 lakhs per annum do not need to take this registration.
13. Professional Tax Registration –
This is mandatory for all types of businesses. You have to register within 30 days of employing staff in your business.
14. Obtain IEC Code –
This stands for Importer Exporter Code and is a 10 digit number. You must obtain this license for any kind of foreign trading.
15. Custom Duty –
It is imposed on import and export of goods. While it is an important requirement, all businesses do not need it. So check if your business needs custom duty or not.
16. NOC from Pollution Control Board –
One little-known fact is that there are three types of permission – red, orange and green. You first need to check whether or not your business requires an NOC from the Pollution Control Board.
17. FSSAI Registration –
This license is mandatory for all food startups. It includes bakeries, restaurants, food franchise outlets, canteens, cafeterias and even small kitchens.
18. Apply for AGMARK –
It is a certification mark in India given specifically for agricultural products, to ensure that they conform to a set of standards approved by the Directorate of Marketing and Inspection, which is the certifying agency of the Government of India.
19. Obtain Intellectual Property Registration –
By doing this, you can protect your company or product brand name. You can also protect any innovative product from being duplicated. In our country, Intellectual Property Rights like trademarks and patents are controlled by the Controller General of Patents, Designs and Trademarks.
20. Register with Employees Provident Fund –
It is applicable to companies employing 20 or more persons and engaged in industry notified under Section 6 of the Act.
21. Register with Employees State Insurance Corporation –
This scheme provides monetary and medical benefits to employees. Some of these benefits are maternity, sickness and employment injury.