“Take up one idea. Make that one idea your life – think of it, dream of it, live on that idea. Let the brain, muscles, nerves, every part of your body, be full of that idea, and just leave every other idea alone. This is the way to success” – Swami Vivekananda

As a person, everyone would like to be an entrepreneur, but only those who are ready to take up the immediate business challenges will end up being an entrepreneur. As I mentioned earlier, we will have lot of business challenges with respect to setting up of business entity like fund raising, business planning, business continuity planning, mobilization of resources and disaster recovery plan so on and so forth.

We have summarized the key business registration requirements in India in this article.

  1. Constitution of Business (Type of Business Entity):
  2. A) Sole Proprietorship (Also known as – sole trader, individual entrepreneurship or proprietorship), B) Partnership Firm, C) Limited Liability Partnership (LLP), D) One Person Company (OPC), E) Private Limited Company and the last but not the least F) Public Limited Company.

Each types of business entities are having its own merits and demerits. We have to cautiously choose the right one depending upon our business requirement, module, status, visibility, market reach.

  1. Business Registration / setup:

As soon you finalize your business constitution, you have to go for registration of your business based on the constitution of the business. As a Sole Proprietorship, nothing much to be done. For Partnership Firm, you have to register your partnership deed, apply for PAN and TAN and have to open the bank account. For LLP, OPC, Private Limited and Limited company, you have to apply for name availability, followed by incorporation certificate, PAN, TAN, bank account and commencement certificate.

  1. Other registrations:

Presently, we are going to discuss about common business registration requirements in India.

 

  1. GST Registration:

As of now, with an aggregate turnover of INR. 40.00 Lakhs would be exempted from the GST. For the north eastern states, the exemption would now be INR. 20.00 Lakhs, for the service providers the aggregate turnover of INR. 20.00 Lakhs and INR.10.00 lakhs will be applicable respectively.

 

Advantages of GST Registration:

  • Extend Input Tax Credit (ITC) to your customers/Clients.
  • Avail Input Tax Credit (ITC) on your inward supplies.
  • Make inter-state sales without many restrictions.
  • Be compliant.
  • Greater visibility in toughest competitive market.

As other side of GST registration, you will have to be filing GSTR and adhere to GST compliance requirements.

Please visit the following URL for more information:

https://www.gst.gov.in

  1. Professional Tax Registration:

 

  1. Professional Tax Employer Registration – Certificate of Enrollment (EC):

Every business entity in Karnataka shall obtain the Certificate of Enrollment (EC) from the Profession Tax Officer within Thirty days from the date of commencement of the business. This registration is mandatory for business whether they employ any people in employment or not.

Every registered business with Enrollment Certificate shall pay tax every year before 30th of April at the specified rates. The amount of tax payable by the employer and the date by which the amount to be paid shall be mentioned in every certificate of enrollment. If an employer has fails to obtain the registration or enrollment within the time specified, the assessing authority shall impose a penalty for delay in obtaining the Registration.

  1. Professional Tax Employee Registration — Certificate of Registration (RC):

Every employer is liable to Professional Tax on behalf of their employees must obtain a Certificate of Registration (RC) within thirty days of his becoming liable to pay tax (starting employment of people).

Professional Tax Employee Registration is a must for all the employers who employ people

with salary or wages of INR.15,000.00 or more. Certificate of Enrollment (EC) is must for obtaining the Certificate of Registration (RC).

 

Please visit the following URL for more information:

 

https://pt.kar.nic.in/(S(kw1e2ou3qwbfk0fzo4h4wepu))/Main.aspx

 

 

C. Karnataka Shops and Commercial Establishment Act Registration:

Karnataka Shops and Establishment Act registration is mandatory for all shops and commercial establishments in Karnataka, expect those are exempted. New shops or commercial establishments in Bangalore or Karnataka are required to apply for Karnataka Shops and Establishment Act Registration within 30 days of commencing operations. The Shops and Establishment Act Registration must be submitted in the prescribed format to the Labour Inspector of the area concerned.

Exemptions from Registration:

  1. Offices of or under the Central or State Governments or Local Authorities, except commercial undertakings.
  2. Any railway service, water transport service, postal, telegraph or telephone service, any system of public conservancy or sanitation or any industry, business or undertaking which supplies power, light or water to the public.
  3. Railway dining cars.
  4. Establishments for the treatment or care of the sick, infirm, or the mentally unfit.
  5. Establishments of the Food Corporate of India.
  6. Offices of legal practitioners and medical practitioners in which not more than three persons are employed.
  7. Offices of a banking company.
  8. Any person employed in any business from point 1 – 7 above.
  9. Persons occupying positions of management in any establishment.
  10. Persons whose work is inherently intermittent such as drivers, care-takers, watch and ward staff, or canvassers.
  11. Persons directly engaged in preparatory or complementary work, such as, clearing and forwarding clerks responsible for the dispatch of goods.

Please visit the following URL for more information:

http://164.100.133.176/ekarmika/static/home.aspx

  1. Provident Fund Registration (PF):

Employees Provident Fund is a scheme under the Employees Provident Funds and Miscellaneous Provisions Act, 1952. It is regulated by Employees’ Provident Fund Organization.

EPF registration is mandatory for all establishments:

  • which is a factory engaged in any industry having 20 or more employees, and
  • to any other establishment employing 20 or more employees or class of such establishments which the Central Government may, by notification specify in this behalf.

Both employee and employer have to contribute 12% each of basic salary plus dearness allowance.

Please visit the following URL for more information:

https://epfindia.gov.in/site_en/index.php

https://shramsuvidha.gov.in/home

  1. E) Employee State Insurance (ESI) Registration:

The ESI scheme is applicable to all factories and other establishments as defined in the Act with 10 or more persons employed in such establishment and the beneficiaries’ monthly wage does not exceed INR. 21,000.00 are covered under the scheme.

 

          ESI contribution
Particulars %
Employee                 0.75
Employer                 3.25
Total                    4.00

Please visit the following URL for more information:

 https://www.esic.nic.in

https://shramsuvidha.gov.in/home

As of now, we have discussed about, registration of GST, PT, Shop and Establishment, PF and ESI. We may have to go for registration of Trade license, EXIM, NSIC, FSSAI, GeM – Government eMarketplace so on and so forth, based on the nature of business, industry, turnover.

Statutory Compliance requirements: 

Based on the constitution of the business, turnover, nature of business and industry, we have to adhere to following compliance requirements:

  1. Companies Act of 1956 and its subsequent amendments.
  2. Income Tax Act of 1956 and its subsequent amendments.
  3. The Limited Liability Partnership Act, 2008.
  4. Goods and Service Tax (GST).
  5. Provident Fund (PF).
  6. Professional Tax (PT).
  7. Employee State Insurance (ESI).
  8. The Karnataka Shops and Commercial Establishments Acts, 1961.
  9. The FEMA Act, 1999.
  10. And all other acts / rules as applicable from time to time as business and situation demands.

 

Techno functional / Socio economic Registrations / set up

 

  1. Google my business registration:

To have an online business presence and to feature on Google map, Google my business registration is necessary. Please visit the following URL:

 

https://www.google.com/intl/en_in/business/

 

  1. Social media account set up:

The social media accounts on LinkedIn, Facebook, Twitter, YouTube, Pinterest and Instagram, etc., registration will help to reach the customer / client in most sensible way.

 

  1. Pitch Deck:

Pitch Deck is a brief presentation about your business, which can be used to attract prospective clients / customers / investors as the case may be. In common parlance, we can call it as “business profile”. Attractive pitch deck may attract more and more investors, clients / customers.

 

  1. URL / Website creation:

URL / Website is like online presence as compared to physical address of the business. The great URL / Website is need of the hour as most of the business requirements will fulfill through internet of things.

 

  1. Online listing:

Online listing is similar to an advertisement, which exists on internet.

 

  1. Corporate stationeries:

Business seal, common seal, letter head, identity cards are part of corporate stationeries.

  1. Startup India Registration:

Startup India registration will be applicable to LLPs, OPCs, private limited companies and registered firms.

 

DPIIT-Recognised Startups are eligible for the following benefits:

  1. Intellectual Property Rights benefits.
  2. Relaxation in public procurements norms.
  3. Self-Certification under Labour & Environment laws.
  4. Fund of Funds for Startups.
  5. Faster exit for Startups.
  6. DPIIT-Recognised Startups may apply to IMB for the income tax exemption for first 3 years u/s 80 IAC of Income Tax Act.

Please visit the following URL:

 

https://www.startupindia.gov.in/

 

 

  1. Udyam Registration:

 

Benefits of MSME Registration:

 

  1. Interest rate subsidy on Bank loans.
  2. Collateral free from Banks.
  3. Protection against delayed payments, against materials / services supplied.
  4. Special beneficial reservation policies in the manufacturing/ production sector.
  5. Ease of obtaining registrations, licenses, and approvals.

 

 

Please visit the following URL:

 

https://udyamregistration.gov.in

 

  1. GeM Registration:

 

The Indian government introduced the Government E-MarketplaceGeM‘ in August 2016 as an end-to-end online marketplace to facilitate online procurement of common use goods and services required by central and state government ministries, departments, public sector undertakings, autonomous institutions, organizations.

Government e-Marketplace Registration GeM is a short form of one-stop Government e-Market Place hosted by DGS&D where common user goods and services can be procured. GeM is dynamic, self-sustaining and user-friendly portal for making procurement by Government officers.

 

Public procurement forms a very important part of Government activity and reform in Public Procurement is one of the top priorities of the present Government. Government e-Marketplace (GeM – gem.gov.in) is a very bold step of the Government with the aim to transform the way in which procurement of goods and services is done by the Government Ministries and Departments, Public Sector Undertakings and other apex autonomous bodies of the Central Government.

 

GeM Advantages for Buyers:

 

  • Provide transparency and ease of buying.
  • Offers rich listing of products for individual category of goods/services.
  • Direct purchase for amounts up to INR 25,000.00.
  • L1 purchase for amounts greater than INR 25,000.00 and less than INR 5 Lakhs.
  • Proprietary Article Certificate Bid- Procurement of specific product as per requirement.
  • Price Trends and Price Comparison from Multiple Suppliers.
  • Direct notifications to sellers.
  • Integrated Payment System.
  • Easy to comprehend interface to search, compare, select and buy.
  • User friendly dashboard for monitoring supplies and payments.
  • Online grievance redressal mechanism for quick resolution.
  • Float bid among population of 3 lakhs sellers.
  • Buyers can now select bid duration between 10 & 21 days.
  • Delivery period up to 180 days.
  • Option to provide multiple consignee locations and quantity.
  • Multiple consignees can be selected for Services.
  • Pin-code based seller selection for Direct Purchase Mode.
  • ATC library available for addition of terms and conditions.
  • Additional Deductions can be applied by buyers at the time of bill generation.
  • Notification to buyers regarding:

o   expiry of DP (Delivery Period) for the contract.

o   Initiation of cancellation of contract in case of non-delivery by sellers.

  • Buyer during technical evaluation can make a MSE seller eligible or ineligible for MSE purchase preference.
  • Now buyers get the option to cancel the Product contract(s) even if the invoice has been generated by seller provided 15 days have expired from delivery period.
  • 11 Banks have enabled GeM Pool Account.
  • To improve fair participation in Bid / RA, GeM now ensures that at least 3 sellers have participated and offered products from at least 2 different OEMs. In case buyer wants to proceed with less than 3 Resellers or two OEMs/Brand, they have to upload approval from Competent Authority.

 

GeM Advantages for Sellers:

 

  • Access to National Public Procurement market.
  • No charges or fee for getting registered.
  • Special provisions and sections for startups, MSMEs and Emporium products.
  • Fully online, paperless and contactless platform.
  • A list of prerequisites for the seller registration has been made available so that it becomes a guide to the seller during registration.
  • Brand application and brand approval process has been revamped for sellers.
  • Multiple invoices for single order.
  • Easy access to participate in bids/reverse auction.
  • Clock has been enabled in RA to display remaining time for seller participation.
  • Online grievance redressal mechanism for quick resolution.
  • All sellers will be shown reasons for rejection.
  • Seller friendly dashboard for monitoring supplies & payments.
  • Business Cockpit has been enhanced with additional parameters in existing report as well as new chart widgets based on OEM and MAIT recommendations.
  • Seller belonging to North East states and J & K are exempted from ITR at the time of bid participation.
  • Dynamic Pricing- Price can be changed based on market conditions.
  • Direct access to Government departments and their organizations.

 

Please visit following URL: https://gem.gov.in

 

  1. NSIC Registration:

 

Benefits of NSIC Registration:

 

The units registered under Single Point Registration Scheme of NSIC are eligible to get the benefits under Public Procurement Policy for Micro & Small Enterprises (MSEs) Order 2012 as notified by the Government of India, Ministry of Micro Small & Medium Enterprises, New Delhi vide Gazette Notification dated 23.03.2012 and amendment vide order no. S.O. 5670(E) dated 9th November 2018.

 

  1. Tender information at free of cost.
  2. Exemption from payment of Earnest Money Deposit (EMD).
  3. Tender advantage.
  4. Consortia facility for tender marketing.

 

Eligibility:

 

  1. All Micro & Small Enterprises having Udyog Aadhaar Memorandum (UAM) / Udyam Registration are eligible for registration with NSIC under its Single Point Registration Scheme (SPRS).
  2. Micro & Small Enterprises who have already commenced their commercial production but not completed one year of existence.

Please be noted that, the MSEs engaged in following activities are not eligible for registration under Single Point Registration Scheme:

 

  1. Manufacture of Medicine and drugs except MSE (unit) engaged in manufacturing and supply of Ayurvadic, Unani, Sidha and Homeopathic Medicines.
  2. Wholesale trading, Retail Trading or commission agents.
  3. The MSEs who have been black listed till expiry of such period.
  4. The proprietor/partner/director/Karta of the MSEs has been convicted for any criminal offence.

 

Please visit following URL: https://www.nsic.co.in

 

To conclude, as we all aware, there is no fixed formula as such to be a successful entrepreneur, as long as we are following the best practices ethically and adhering to the rule of the land, rest will follow sooner than later. All the best.

About Ganashri

At Ganashri, we help to build the nation by giving the quality services to our clients on time every time. Ganashri is Tax and Accounting advisory firm based out of Bangalore, India. Ganashri started its operations in June 2018. Our business sustainability is depending upon the triple bottom line, i.e., Planet, People and Profit.

Please keep in touch with us @ https://www.ganashri.com/

Disclaimer

“This document is issued in the general interest of knowledge transfer purpose only and it cannot be construed in any other manner whatsoever.”