Whether you are holding a million dollar company or small business in India, business compliance is one big thing which needs to be followed. India holds one of the most lucrative business environments not just for Startups but also for small business enterprises in India. MSME’s & small business in India hold more than 80% of market share collectively.
But most of the potential business Startups drops the idea of actually forming their business venture because of compliance barriers & lack of business know-how. In the light of these issues, we will discuss one of the easiest processes to start small business in India.
PROCESS TO START SMALL BUSINESS IN INDIA
Establishing a small business in India is not a difficult process as it looks like. But it requires expert consultation all the time to set-up your MSME in most effective & efficient way. Follow the steps listed down below to establish small business in India.
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1.) Choose the business format
Various business categories in India are as follows:
- Limited Liability partnership [LLP]: Partners of an LLP bears limited liability as compared to private limited partnership or OPC. Under LLP, Liability is limited to the assets of the partnership firm & partner’s liability is limited to the agreed contribution. No partner will be liable for any actions of other partners.
- Private Limited Company [PLC]: Private limited companies require less rigorous protection for their shareholders for company incorporation in India. In terms of ownership, risk & reward they possess a different relationship as compared to other form of company registration in India.
- Public limited company: A public limited company refers to those companies who offer shares to general public in exchange of a stake in the company. Buying & selling of stock can be processed through an Initial public offering (IPO) via stock exchange.
2.) Name for your business
Most crucial stage is finalizing the name of company that will be your business identity. It could be a tough job to choose a name in every business incorporation in India. It’s the name that goes along with the business throughout its lifetime; therefore one must keep it simple & give due importance in selecting company’s name. Choosing the right name of your business will make or break your company future.
3.) 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. As compared to a hand signature chances of tempering with a DSC are minimal.
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4.) Source of funding: Funding is just another step where both private players & the government seek their interest. Private players want to invest in the best business plan and acquire a stake in that business; whereas the government looks forward to ease the credit process for this small business in India to improve the economy. Popular methods of business funding in India are:
- Business incubators & accelerators
- Bootstrapping i.e. Self-financing
- Loan from commercialised bank
- NBFC financial assistance
- Venture capitalist
- Angel investor
FREQUENTLY ASKED QUESTIONS (FAQ’s)
Q.) How much does it cost to start a business in India?
There is no fixed cost to start a business in India; depending on the type of business & the net investment capacity the average cost to start a business in India can be decided.
Q.) What is the best way to open a small business?
The most effective & efficient way to start small business in India is to do a cost-benefit analysis >>> choosing an appropriate business model >>> consult best chartered accountant >>> find the best source of raw materials >>> start your business.
Q.) Should I start my own business?
Yes, one should start their own business in their individual investment capacity & according to their business plan should move in that direction. To start your own business, you just need to have an innovative business idea and the rest business compliance will be taken care of by business experts such as chartered accountants, company secretary & compliance experts.