Asked July 16, 2016

registration of business

  • 1 Answer

Hello sir, I am suraj resident of karad rural,maharashtra. I started business of Import export from my house by taking NOC from Gram panchayat as there is no any Gumastha licence they offer in rural areas thats what i found.I aquired import export code with help of current account in bank.So i need to register my business name as LLC or any legal state registered company as sole proprietor.I don't want any partner.SO please guide me how I form such business company.

Answer 1

 As per the facts given by you, sole proprietorship will be the best option for you. It is the easiest way to start the business with very few legal formalities. Also you will not be required to pay flat 30 % tax rate as required in companies. It will be most suitable for you if your business is not on large scale.

However, in case you need to raise debt or get funding for your business then you should register as a private Ltd company or OPC which is a better option these days.

For opening a current account in a bank, you can get yourself registered as a Proprietorship concern, giving it a Business name (e.g. XYZ Enterprises). All you have to do is to get a Trade License from a local Municipality, which you have already acquired. Your personal PAN card will be good for the business also. If you are into trading in any tangible goods, then you have to take a VAT registration. For your website income, you will have to take a Service Tax registration, if your annual receipt from that source exceeds Rs 9 Lakhs. It’s advisable to form two separate units, to avoid complication of accounting. However, certain Municipalities (KMC for example) do not issue license for two trade names to a single person.

Instead of Pvt limited or LLP, register it as a One Person Company (OPC) if there is only one director for your company. This is a very new registration type that has been introduced and has less headache and is more beneficial to single owner start-ups.

One-person company is a new concept in India which has been introduced by the companies act 2013. In the old Companies act 1956 a minimum of two directors and shareholders were required to form a private limited company. However, in case of a One-person company, only 1 person is required who can be a shareholder as well as the Director. Hence the name, One Person Company.

The process of incorporation of a one-person company is a very simple one.

First the sole shareholder shall get a Director Identification Number (DIN) as well as a digital signature certificate and then apply for the name of the company. If you have a nominee then get the consent of the nominee in the prescribed forms. After this file the final incorporation forms with the Memorandum and Articles and other required documents. You will then receive the final incorporation certificate from the register of companies. Now he can commence business under the name.

Please note that that the words ‘‘One Person Company’’ shall be mentioned in brackets below the name of such company, wherever its name is printed, affixed or engraved.


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