With the changing times, starting a business in India has become considerably easier these days comparing to the yester years. Currently it takes around 35 days to register a company in the financial capital of the country – Mumbai. And the reason behind the faster pace of the whole process is the computerization of tax registration for both, Personal Account Numbers (PANs) and Tax Account Numbers (TANs). Besides this, one can also pay the stamp duty through various banks and stamp offices. However, there is still a lot of scope for improvement. India still lags behind the other developed countries where the required time for starting a business is considerably lower.

Types of Business Entities

Before one can start a business in India, he/she needs to decide which type of business it would be. There can be two types of business entities in general:

Private Limited Company A private limited company will have following characteristics:

• The maximum number of share holders could be fifty.
• Shareholders cannot transfer their shares.
• The company cannot tender an invitation to the public for subscribing any shares or debentures.

A public limited company will have following characteristics:

• A public limited company must have at least seven shareholders.
• It must have at least three directors.
• For a public limited company, the certificate of incorporation is not enough to start business. In order to commence business, it must obtain trading certificate along with this.
• Before starting transactions, the company must publish a prospectus. It can also file a statement in lieu of it.
• The company must hold statutory meetings.
• It also needs approval from the government to appoint the management.

Once you have decided the type of your company, you need to follow certain steps before you can start your business. Following are the procedures for starting a business in India. Though these standard procedures are applicable in most of the Indian cities, however, there might be some variations in the procedures due to the different rules of the state governments.

1. Obtain Director Identification Number (DIN).
2. Obtain Digital Signature Certificate.
3. Present the name of company to the Registrar of Companies (ROC) for approval. Get the name reserved for you.
4. Apply to the Superintendent of Stamps for stamping of the Memorandum of Association as well as Articles of Association. Application can also be sent to an authorized bank.
5. Now the next step is to get the certificate of incorporation. You need to submit all the required documents to the Registrar of Companies, along with the registration fee.
6. Get a company seal.
7. Get a Permanent Account Number (PAN) from the UTI Investors Services Limited.
8. Contact the Assessing Office in the Income Tax Department of the respective state to get a Tax Account Number for income taxes deducted at source.
9. Register with Office of Inspector of the respective state.
10. Register for Value Added Tax (VAT) before the Sales Tax Officer of the respective ward where the company is situated.
11. Register for Profession Tax.
12. Register with Employee’s Provident Fund Organization (EPFO).
13. Register for Medical Insurance (ESIC).