Starting a Business in India – Business Ideas

Entrepreneurial aspirations among youngsters are rising along with the growing middle class in India. Technology has opened up numerous business opportunities and made starting and managing a business easier. Therefore, it is more rewarding than any other time to start a business in India.

Business Idea

The first step in starting a new business is the ideation stage. In this stage, the Entrepreneur must look for various ideas or be inspired to start a new business. Once an idea or aspiration develops in the mind of the Entrepreneur, time must be spent in trying to understand the market, the product/service offered, existing competition, availability of manpower, funds, infrastructure, etc., Once the above research is complete, the Entrepreneur can fully-develop a business idea into a plan of action.

Choosing an Advisor and Entity

Before beginning to invest time and money into the new business, it is important to consult an Advisor with experience in helping startups. The Advisor can then understand your business plan and advise you on the choice of a legal entity, licenses, funding, taxation and compliance.

IndiaFilings specialises in providing Startup Advisory support. We have helped start over 50,000 businesses across India in every industry possible. Our Advisors are available 24/7, 365 days and can help answer various questions you may have concerning the legal formalities, business licenses, funding, income tax, GST and labour law compliance.

Registration of Business

Once you have selected the right Advisor, the next step would be to register the business. It is essential to register the business before purchasing or investing, as the investments can be accounted for under the entity.

Today, an Entrepreneur has various choices for legal entity ranging from proprietorship firms to limited companies. For most Entrepreneurs who wish to build a professional business with long-term value creation – an LLP or private limited company would be the right choice. On the other hand, if an Entrepreneur wishes to start a small business with a limited scope of operation – a proprietorship firm or partnership firm would suffice.

Every type of legal entity has various advantages and disadvantages. Hence, it is important for the Entrepreneur to discuss his/her plan for business with an Advisor and select the one that fit his/her requirement the best.

Based on the type of activity proposed by the business or vendor criterion or customer requirements, various tax registrations may be required for the business, as follows:

GST Registration : GST registration is required for any person or entity if the turnover is over Rs.20 lakhs in most states.

TAN Registration : TAN Registration is required for tax deduction at source (TDS). Therefore, TAN Registration may be required while hiring employees or dealing with certain customers or vendors.

ESI Registration : ESI Registration will be required when the number of employees in the business crosses 20. Proof of ESI Registration is often requested by businesses that outsource manpower requirements.

Bank Account Opening

Opening a bank account in the name of the business is one of the first task to be completed after registration or incorporation of the business entity. Corporate entities like LLP, Private Limited Company, One Person Company and Limited Company are allowed to open a bank account in India by submitting a copy of the Certificate of Incorporation and PAN Card of the entity along with Director KYC documents. On the other hand, opening a bank account in the name of the business for a Proprietorship entity could be more cumbersome – as one or more tax registrations may be required to establish the identity of the proprietorship business. Refer to the article on “Opening a business bank account in India“, for more information.

If a bank loan is required for working capital or purchase of equipment while starting a new business, it is best to open a bank account with a Nationalized Bank. Nationalised banks are more in favour of providing bank loans for startups, when compared to privatised banks. Hence, the right banker must be selected while opening a business according Ideas

Technology has made starting and operating a business from home, easy and cost-effective. The advancement in technology combined with the Entrepreneurial spirit of the middle-class has made many home-based business models a success in India. Working from home can be very rewarding both in terms of money and work-life balance. Home-based businesses are rapidly gaining popularity in Indi