Simple business set up advice needed

#1 May 19th, 2011, 23:43
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#1
Hi,

I live in India with my Indian husband and have PIO status.

We are planning on starting a new business and I am trying to find out how you go about registering your business / registering for tax / paying tax etc ...

We have spoken to lawyers here who seem to think it costs around Rs60,000 - that seems a crazy amount of money just to set up a business and that you need a certain amount of shareholders,

And then there is the world of DIN / TIN / PAN numbers etc ... which further complicates matters. Of course I have read various posts and information on the web about starting a business but it is not easy to understand if you are new to business in India.

Please can someone let me know what are the steps you need to take to register a business here and how long does the whole process take - including getting your TIN number. And can you do this on the internet?

Simple English and business / tax explanations for the clearly stupid (that's me) needed.

Thankyou

MadangMeri
#2 May 20th, 2011, 15:09
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#2
Quote:
Originally Posted by Madangmeri View Post Hi,

I live in India with my Indian husband and have PIO status.

We are planning on starting a new business and I am trying to find out how you go about registering your business / registering for tax / paying tax etc ...

We have spoken to lawyers here who seem to think it costs around Rs60,000 - that seems a crazy amount of money just to set up a business and that you need a certain amount of shareholders,

And then there is the world of DIN / TIN / PAN numbers etc ... which further complicates matters. Of course I have read various posts and information on the web about starting a business but it is not easy to understand if you are new to business in India.

Please can someone let me know what are the steps you need to take to register a business here and how long does the whole process take - including getting your TIN number. And can you do this on the internet?

Simple English and business / tax explanations for the clearly stupid (that's me) needed.

Thankyou

MadangMeri
i would recommend you to get in touch with a CA(chartered accountant) for registration.

You cant register a company online in india.

Registration costs,taxes etc is different for diffrent types of business.

Note: let your indian husband do the talking because most of the indians think that foreigners have a lot of money.
#3 May 20th, 2011, 15:19
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#3

Idea of costs

Thanks for that. We already have gone to a lawyer and accountant but can't say I trust them fully.

Do you have any idea how much it costs to set up a business?
Costs of around Rs60,000 seem extreme to me.

One lawyer was talking about the difference between setting up a firm and a company - that a firm was about half the cost. Any idea what he was talking about?

Do we have to go through the process of shareholders, memorandams etc, its only a small business - not exactly going to create the next Kingfisher.

Madang Meri
#4 May 20th, 2011, 15:24
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Quote:
Originally Posted by Madangmeri View Post Thanks for that. We already have gone to a lawyer and accountant but can't say I trust them fully.

Do you have any idea how much it costs to set up a business?
Costs of around Rs60,000 seem extreme to me.

One lawyer was talking about the difference between setting up a firm and a company - that a firm was about half the cost. Any idea what he was talking about?

Do we have to go through the process of shareholders, memorandams etc, its only a small business - not exactly going to create the next Kingfisher.

Madang Meri
Which city are you planning to set up your business?
What would be the nature of business?
#5 May 20th, 2011, 15:28
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#5
Quote:
Originally Posted by Madangmeri View Post Thanks for that. We already have gone to a lawyer and accountant but can't say I trust them fully.

Do you have any idea how much it costs to set up a business?
Costs of around Rs60,000 seem extreme to me.

Madang Meri
Don't trust them! Rs. 60000 is extreme! Register online if possible!
#6 May 20th, 2011, 15:56
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#6

Where, what?

The business will be in Trivandrum, main products - handicrafts - planning on exporting later - hence the reason for trying to do things legally.
#7 May 20th, 2011, 16:03
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Originally Posted by Madangmeri View Post The business will be in Trivandrum, main products - handicrafts - planning on exporting later - hence the reason for trying to do things legally.
this should be helpful for you.http://india.gov.in/howdo/index.php

for export you need an export license too.

i am not sure on the state taxes or registration for the state of kerala but you can get detailed info and contact nos from the above government webportal.
#8 May 20th, 2011, 16:08
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Originally Posted by Fundoo View Post You cant register a company online in india.
sorry this is incorrect. you can initate the registration process online in few states of india.
#9 May 20th, 2011, 16:16
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#9
If it is going to be small then you are better off forming a firm. If you form a company , there are a lot of legal compliances that need to be taken care of. Charges vary for formation of company - if both the shareholders of company are going to be Indian, then you could get it done in 30-35K (excluding fees) max. from a CA. but even 60K is not very unreasonable. Just make sure they include everything like getting DIN/PAN/VAT registrations etc. in their fees. But, again I would suggest a firm if it is going to be family business and small.
#10 May 20th, 2011, 16:19
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Originally Posted by Fundoo View Post sorry this is incorrect. you can initate the registration process online in few states of india.
You can only initiate the registration process online. Still, a lot of documents need to be submitted offline, attested etc. Don't think about forming company yourself - it could be done but only if you are very aware of the system.
#11 May 20th, 2011, 16:28
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Originally Posted by Madangmeri View Post The business will be in Trivandrum, main products - handicrafts - planning on exporting later - hence the reason for trying to do things legally.
Better register a shop as per the shop and establishments act of the state of Kerala and get an export license this will reduce the registration cost drastically and the amount of documentation required will also be reduced.
#12 May 20th, 2011, 16:29
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Originally Posted by engharsh View Post You can only initiate the registration process online. Still, a lot of documents need to be submitted offline, attested etc. Don't think about forming company yourself - it could be done but only if you are very aware of the system.
yes only initiate that is what i meant
#13 May 20th, 2011, 16:50
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I would say open a shop first then get the sales tax registration done and after that get a cottage industry registered at State Small Industries Development Corporations (SSIDC) ( http://www.newagepublishers.com/samp...ter/001681.pdf ) this may help. And once the business starts you can get the TAX part taken care off.

And once the shop is open most of the inspectors of various departments will come themselves to you to make some money. You can get your work done through them and pay them also.

For exports you either have to get a license or you export it through some other party. But the best is to rope in a importer or other country. All headaches will be his
#14 May 20th, 2011, 18:47
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#14
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Originally Posted by Madangmeri View Post The business will be in Trivandrum, main products - handicrafts - planning on exporting later - hence the reason for trying to do things legally.
I was hoping you were not going to say Kerala, but you did.

The export lisence is very easy, get a current account, fill in the paper work, and hey presto, you'll get it. No need for any agents. When I applied for mine I think the cost was below Rs1000 (can't remember exactly). But they are strict on the paper work.
Lord, Grant me the Serenity to accept the things I cannot change, the courage to change the things I can, and the wisdom to hide the bodies of those people I had to kill because they pissed me off.
#15 May 20th, 2011, 19:05
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OK, this is becoming a bit clearer so thank you Engharsh, Fundoo & Ramboo shock.

I think due to the small scale, it is not advisable to go down the company route. Although can anyone tell me what the turnover has to be for it to be best to be a company and not a firm. And what are the advantages / disadvantages of registering a firm Vs a company.

Also, Fundoo - if we register the shop under the Keralan Shop & establishment Act - will we be able to get a TIN number?

Rambo, the original plan was to open the shop first and we have made great contacts with artists & designers but we have had very big headaches getting people to sell to us as without a TIN number as they are unable to post the products to us. Turns out that to use couriers or the rail service to post things you have to have a TIN number. I might, of course, have this completely wrong and welcome your wisdom.

Madang Meri

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