Well India is one of the most lucrative places for investing and starting your business. Small businesses & MSME’s are the bedrock of Indian economy with a market shareholding of more than 80%. India has one of the most optimal online Startup business environments in terms of ease of compliance structure, credit facilities, multiple business setup options etc.
If you’re looking to go & grow your business in India then you must read the complete article and get answers to almost all your queries related to Small business incorporation in India.
HOW TO START A SMALL BUSINESS IN INDIA?
Starting a small business in India or company incorporation in India is not a difficult process rather you need to have an experienced chartered accountant on your side who can guide you throughout your business journey. Follow the steps to establish your business and make it up and running.
1. Choose the business format
There are several categories of business setup in India which are as follows:
- Limited Liability partnership: LLP has a limited liability on the partners of the firm. Liability under LLP is limited to the assets of the partnership firm & liability of partners is limited to the agreed contribution. No partner in anyway will be liable for any actions of other partners.
- Private Limited Company: Private limited companies require less rigorous protection for their shareholders for company incorporation in India. However they possess a different relationship in terms of ownership, risk & reward as compared to other form of company registration in India.
- Public limited company: According to Company Act 2013, a public limited company (PLC) refers to those types of business with limited liability & who offers their shares to the general public in exchange of stake in the company. Buying and selling of stock can be initiated through an Initial public offering (IPO) via stock exchange.
Choose a name for your business
Choosing a name could a tough job in every business incorporation in India. Since the name goes all along with the business till its life, one must keep it straight & simple and give it due importance before finalizing the company’s name. Choosing the right name for your business will make or break your company future. Before finalizing the company’s name, please get it checked from MCA website whether it is available or not and basis on that register your business.
# Apply for digital signature certificate (DSC): It is important to apply for Digital signature certificate (DSC) since it is the most trusted way of authorising and verifying the documents. The chances of tempering with a DSC are minimal as compared to a hand signature.
# Funding source: It is one of the most important steps where most of the businesses either drop their idea of business registration in India or they go ahead with their Startup plan. Funding is just another step where both private players and the interest of government lies. Private players look for funding to invest in the best plan and get the stake in that business whereas the government ease the credit process for these Startup registrations to improve the economy. There are various methods of business funding in India viz.
- Business incubators & accelerators
- Bootstrapping i.e. Self-financing
- Loan from commercialised bank
- NBFC financial assistance
- Venture capitalist
- Angel investor
How India has the favourable environment for FDI?
According to United Nations Conference on trade & development (UNCTAD), India is among the top 10 FDI recipients in the world. There was an increase of about 16% in the FDI from the previous year. This exponential increase in the FDI is due to ease of compliance norms in India, improved tax structure, convenient company registration and favourable environment for MSME’s.
FREQUENTLY ASKED QUESTIONS (FAQ’s)
Question: Can a foreigner start business in India?
Yes, a foreigner can start a business in India. There are various modes through which a foreigner can start their business venture in India.
- Foreign portfolio investor (FPI)
- Foreign direct investment (FDI)
- Branch Office/subsidiary office
Question: What is DIN?
DIN refers to the Directors identification number. Getting a DIN for the directors of the company is necessary before the business incorporation in India. DIN is a unique number issued by the central government to any person intending to be a director or he/she is an existing director.
Question: How will CAONWEB help you to start small business in India?
CAONWEB is the most trusted Chartered accountants financial firm which provides all sorts of business services which will make it convenient to smoothly operate your business. Starting from business registration, income tax consultancy and GST registration, we offer various CA services which will help you to achieve your desired goals.
Know More: Types of Business Entities in India
Know More: INCORPORATING A COMPANY IN INDIA