Guide to Start-up a Business in India
Starting a business is not an easy task, for starting your business you need to know about many things before you start. Firstly need set what kind of business you are planning for, means need to decide in which sector you are planning to commence your business, then need to do the market study of that chosen business sector and, learn about the rule and reform for commencement, then need to see the competitor, then prepare a business plan for next five years, then give a kick start to your business, then comply all the applicable compliance, then finance your business if required.
Ultiwise gets your right from the plan and register your startup and getting it up and running:
We the team of compliance officer/professional will help you in planning and executing your idea, into existence. Once you choose your business type then we will help you in:
- a. Preparing your business plan
- b. Formation or incorporation of your business
- c. Procuring the required license /registration and certification
- d. Financing your business
- e. Complying all the applicable compliance
- A. Preparing your Business plan
A business plan is a written document outlining in detail how a company – usually a new one – can achieve its objectives. A business plan allows for a written plan from a marketing, financial, and organizational point of view. Business plans are important in enabling a business to set its goals and attract investment. They are also a way of keeping businesses on track for the future. Also, a business plan is a road map that offers guidance so that a company can plan its future and helps it avoid road bumps. The time you spend making your business plan thorough and accurate and keeping it up to date is an investment that pays great long-term dividends.
Along with business plan we will also help you in strategizing you management for your business, Strategic management is the management of the resources of an organization to attain its goals and objectives. Strategic management means setting goals, evaluating the business environment, evaluating the internal structure, reviewing tactics, and ensuring management carries out tactics around the structure.
Strategic management is an ongoing process of strategic analysis, strategy development, execution and monitoring, used by companies to gain and sustain a competitive advantage
Strategic management's basic aim is to attain the firm's sustained-strategic competitiveness. Developing and implementing such strategies that will create value for the company. It focuses on identifying opportunities and challenges, keeping in mind the strengths and weaknesses of the company, and designing survival, growth, and expansion strategies for it.
- B. Incorporation of your business:
A business can be incorporated in various forms like a sole proprietorship, Partnership, Private Limited company, Public Limited company, Limited Liability Partnership, or a one-person company. We will help you by incorporating your business.
A sole proprietorship is one of the oldest forms of business, also known as an individual entrepreneur or proprietorship or sole trader is a business entity that is unregistered and is owned, managed and controlled by a single person is called as its sole proprietorship. This is one of the most common forms of business in India used by micro and small business operators. This form of business is very easy to start and close and has minimal regulatory compliance. A Sole Proprietorship does not offer benefits such as corporate status, separate legal identity, perpetual existence, independent existence, as it is owned and managed by a single person. Therefore proprietorship is suited only for unorganized or small businesses.
- 2. Partnership:
Partnership form of business is an easy and simple way to get into the business and it is an easy way for a good start-up. As compare to Sole Proprietorship, a partnership is a better form of business.
As per section 4 of the partnership act 1932, the partnership is the relationship between persons who have shared the profits of a business carried on by all or any of them acting for all. The one who has entered into a partnership with another are called individually, "partners" and collectively "a firm", and the name under which their business is carried on is called the "firm-name"
- 3. Private Limited company
- Under section 2 (68) of company act, 2013 Private company mean company incorporated under company’s act 2013 having paid-up share capital as may be prescribed, and which by its articles, —
- a. Restricts the right to transfer its shares:
- b. The maximum number of shareholders is restricted to 200 in the case of a Private Limited Company. The following should not be counted as shareholders of the Company:
- ➲ A person who or was is in the employment of the company shall not be counted
- ➲ a shareholder who was previously in the employment of the Company shall not be counted
- c. Prohibits any invitation to the public to subscribe for any securities of the company
- It is a form of business which is came into existence through the Companies Act, 2013, and has separate legal entity from that of its promoter. One of the distinctive features of a Private limited is that the financial liability of a shareholder is limited to the value of their shares.
Public Limited Company is a type of Company with the following features:
➲ Is not a private company
➲ Has a minimum paid-up capital of five lakhs rupees or more
➲ Has a minimum of 3 directors
➲ Has a minimum of 7 shareholders
Provided that a company which is a subsidiary of a company, not being a private company, shall be deemed to be public company for the purposes of this Act even where such subsidiary company continues to be a private company in its articles
An alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership is known as limited liability Partnership (LLP). The LLP can continue its existence irrespective of changes in the partners; it is capable of entering into a contract and holding property in its own name. Mutual rights and duties of the partners within an LLP are governed by an agreement between the partners or between the partners and the LLP as the case may be.
LLP contains elements of both ‘a corporate structure’ as well as ‘a partnership firm structure’ LLP is called a hybrid between a company and a partnership.
Recently, the One Person Company (OPC) was introduced as successful refining over the sole proprietorship. In OPC, a single promoter assumes full control over the company while restricting his / her liability towards their contributions to the company. The said person will then be the sole shareholder and director (although a nominee director is present, but has zero control unless the actual director proves incapable of entering into the contract).
- C. Procuring the required license, registration, and certification
After incorporation, we will help you in procuring appropriate license and certification which will be required for your business. If your business is dealing with the financial sector then we will help you in procuring a license under that sector like NBFC license, Money changer registration, PCI_DSS certification, Payment wallet license, Payment gateway services, and many as per your business requirement.
If your proposed business is dealing with the food sector then we will help in procuring license required their under like FSSAI, pollution control license, health and trade license, shops and establishment, and others as per the requirement.
Or we will help you in procuring your business license as per your business requirement.
Some are the basic registration which every business may procure like:
- 1. GST
- GST is an indirect tax levied on the supply of goods and services It is applicable to all India service providers, traders, and manufacturers as per their turnover basis. As per government latest notification, a business whose turnover exceeds Rs 40 lakhs* is required to register as a normal taxable person. This process of registration is GST registration. For a certain set of business GST is mandatory.
In 2017 parliament if India has passed the Goods and Service Tax act (GST act) and this act came into effect from 1st July 2017. It’s an indirect tax which replaced many other prevailing indirect taxes in India. It is all in one tax which includes a variety of state taxes like VAT, Entertainment Tax, Octroi etc and central taxes like CST, Service tax, Excise duty etc.
- 2. MSME
All the business which are operating in market and want to get a legal existence and want avail benefits under MSME scheme can get register themselves under Micro, small and medium enterprise development act 2006 and as per government enacted act Micro, Small and Medium Enterprise Development (MSMED) Act 2006, micro, small and medium has been defined as under:
For the Manufacturing sector:
- Micro means an enterprise where investment in plant and machinery does not exceed Rs.25 lakh.
- Small means an enterprise where investment in plant and machinery is more than 25 lakh but does not exceed Rs 5 crores.
- Medium means an enterprise where investment in plant and machinery is more than 5 crores but does not exceed 10 crores.
For the Service sector:
Micro means an enterprise where the investment in equipment does not exceed Rs. 10 Lakh
Small means an enterprise where the investment in equipment is more than 10 lakh but does not exceed 2 crores.
Medium means an enterprise where the investment in equipment is more than 2 crores but does not exceed Rs. 5 crores.
Startup means an entity, incorporated and registered in India which fulfills the following:
a. Is any of the following
- ➲ Private Limited Company
- ➲ Public Limited Company
- ➲ Limited Liability Partnership
- ➲ Partnership Firm
- b. The annual turnover of the applicant shall not be more than INR 100 crores for any financial years since its incorporation.
c. Shall be working towards innovation / development / improvement products / processes / services. It can also be a scalable business model with a high potential for wealth creation or employment generation.
d. An entity that has come into existence by splitting up or reconstruction of any existing business entity shall not be considered a ‘Startup’.
e. Shall not be more than 10 years old.
f. Shall not be incorporated before April 2016 in order to claim the Tax Exemption certificate.
g. Details of Revenue Model and Unique Features of the Product/Service
h. Details of the Website of the business
i. Pitch Deck of the business
j. Video or Patent registered in the name of the Company
D.Financing your business
Every start-up required funds to run their business, without capital no business can run. Ultiwise will help you in procuring funds for your business as per the requirement and business type. We also work as syndicators and as manage funds for the business.
Stages of startup funding and source
1. Pre-seed Stage
This is the stage where you, the businessman, have an idea and are working on bringing it to life. The amount of funds needed at this point is usually low.
Since you are in the start-up lifecycle at such an early point, there are very small and mostly informal outlets available to collect funds. Popular sources of funding used by startups at this point are:
➲ Friends and Family
- 2. Seeding Stage
This is the stage where you have a prototype ready for your startup and you need to validate the potential demand for the product/service of your startup. This is called carrying out a 'Proof of Concept (PoC),' after which the big market launch comes. The startup will need to conduct field trials, test the product on a few potential customers, onboard mentors and build a formal team to do this. Common funding at this source:
➲ Government Loan Scheme
➲ Angel investors
3. Series A stage/ Early Traction
It is the stage where the products or services of the startup were introduced into the market. From this point, key performance metrics such as customer base, sales, app downloads and so on become relevant. At this point, funds are raised to further increase user base, product offerings, extend to new geographies, and so on. Popular sources of funding used by startups at this point are:
➲ Venture Capital Funds
➲ Venture Debt funds
4. Series B/Scaling & Above Stage
The startup is experiencing strong market growth rates and growing revenues at this point. Popular sources of funding used by startups at this point are:
➲ Venture Capital funds
➲ Private equity
E. Complying all the applicable compliance
Establishing your business is not only the end task for running of the business, businesses need to comply with applicable compliance on a regular basis otherwise the business will suffer from fines and penalties.
We will help you in complying your all applicable compliance of your business like:
Accounting is a draconian subject and includes various sub-sets under its ambit. like financial accounting, management accounting, general accounting etc. These categories represent a specific type of activity and underlying applicable standards defining presentation and documentation of the financial statements. different accounting categories operate under their specific legal regime prescribed by the applicable provisions of law.
General accounting is a vital thing for every business owner and essentially refers to general ledger collection and accounting activities that include collecting ledgers of general accounts in debits & Credits and documenting the periodic financial ledgers. This kind of general accounting process is widely undertaken by medium to small businesses. It is noteworthy that general accounting.
GST means goods and services tax is a form of indirect tax that has replaced other types of indirect taxes such as service tax, excise duty (not on all items), sales tax etc. GST has made indirect taxation much easier and simpler by eliminating the cascading effects of taxes. GST is regulated by the Goods and Service Tax Act, passed in Parliament on 29 March 2017 and came into force on 1 July 2017.
We have already seen a host of positive improvements in India's fiscal environment with the introduction of GST. Due to this new revised indirect tax, the numerous taxes that had been compulsory earlier are now obsolete. Not only that, GST makes sure that the slogan "One Nation, One Tax, One Market" is becoming our country's reality and not just a fantasy.
- 3. IT returns
It is a tax explicitly imposed on a taxpayer who pays it to the government and is unable to pass it on to someone else. It is directly imposed on taxpayers on their direct income.
Types Of Direct Taxes:
➲ Income tax:
The tax is collected directly on the taxpayer’s income. The taxpayer has to pay the tax as per the income bracket (slab) in which they fall. These income slabs are decided by the government every year.
➲ Wealth tax:
Wealth tax is imposed on the value of the property an individual owns. However, the government has abolished this tax.
A business incorporated in India has to fulfill a specific set of compliance, filings, and returns as prescribed under the provisions of various corporate and tax laws. In simple words, compliance means following rules and orders applicable to the entity. Every entity is governed under law and order and that entity needs to follow the rule and regulations prescribed by it. Legal and regulatory enforcement must be handled as an integral part of every corporate strategy. The executive board and management must consider the scope and consequences of the company's relevant laws and regulations. They need to set up a compliance management system as a supporting risk management program, as it significantly reduces enforcement risk.
How Can Ultiwise Help
Ultiwise is an initiative by Ultiwise, a team of more than 100 corporate legal and finance professionals, set out to assist entrepreneurs around the globe in their business quests. We believe that every business needs nourishment in its budding stages. Ensuring smooth navigation through the bumpy ride of legal compliance, financial risks is what we are good at.
We, at, Ultiwise, offer a complete range of professional services and tailor-made solutions for the evolution of your business ranging from compliance, legal, financial, technology. Our mission to shield our clients from risks and promote good governance as our contribution to the good of society.
Our services comprise of incorporation, finance, compliance, business strategy and marketing consulting, legal services, compliance and regulatory advisory. We have you covered from incorporation to compliance to finance and marketing functions.
Our team of experts aims at easing Compliance and incubating your business growth with maximum efforts & minimalist timeline.