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What are the Legal Steps to Start a Business in Bangalore, India?

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Bangalore is considered the next decade's fastest-growing city, so if you are thinking of starting a business in Bangalore, it is probably the best decision one can take. Especially in the current times, Bangalore is renowned as the IT hub, which has given a big platform to an endless number of individuals to transform their ideas into real-time business and take it further.

Starting a business can be tedious. One needs to be multi-talented. Starting a business is not just about having an idea, but a lot of work goes behind it, which needs proper focus. Legalities are something that needs to be kept under consideration throughout. If you are thinking about starting a business in Bangalore or the legal steps to start a business, don't worry. In this article, we are going to discuss that in detail.

The legal steps of starting an online business are almost the same as starting an offline one, so even if you're looking forward to starting an online business, you must read this article till the end.

1. Approve your company name

Make a list of 6 or more names that you are planning to keep for your business. Check on MCA official website to see whether the name you are planning is available or not. After approval, your business name would reflect on the website.

2. Get director identification number.

File an application form -1 online to get provisional DIN. After this, take a printout of the application form, which is filled and signed. Send the document with proof of address and identity to the concerned ministry for approval. Once approved, you will get a permanent DIN.

3. Get the DSC (digital signature certificate)

The company director can only apply for DSC along with identification proof to any of the private agencies approved by the ministry of corporate.

4. Stamp the papers of your start-ups or business

For incorporation, get these documents stamped for your company; otherwise, the registration will be challenging to get through.

  1. Don't forget to give an unsigned copy of your memorandum of association(MOA) and article of association(AOA)
  2. Submit the payment required with your application; the copies will be duly stamped and signed and given to you by the superintendent.
  3. Ask the promoter of the company (if any) to sign the MOA.

5. Get the certificate of incorporation

To get the certificate of incorporation, you need to fill some forms such as form -32, form-28, and Form -1. Make sure you give a scanned copy of the consent of directors. Now, along with this, submit AOA and MOA, which are signed and stamped. Attach all these documents with Form no -1. These documents need to be forwarded to the company's registrar with a copy of the power of attorney and name approval letter. After following all these procedures, you will get the certificate of incorporation on your registered mail id.

6. Make a seal for your business

No matter which type of business you are planning to start, you need to have a seal for issuing certification if you hire an intern or an employee. The cost of getting a seal depends on various factors like the period in which you expect the delivery, the number of words in the seal, and the number of seals required.

7. Get a Permanent account number (PAN)

Through form 49 A, apply for PAN. One can also apply online, but still, the documents need to be sent physically for verification. After getting the Pan, a printed Pan will also be issued.

8. Get a tax account number

Fill the Form no 49B and apply for TAN. Submit it at the tax identification number facilitation centre. After verification, it would be forwarded to the income tax department, and you will get your TAN. It can also be applied online through the official website of National Securities Depository Limited.

9. Register your business with the Office of Inspector and Shops and Establishment Act

Provide a statement to the local shop inspector which contains the name of the employee, manager, and name of the establishment, and it should also have a postal address. Make sure to register your establishment within 30 days with the officials.

10. Register for GST

For the business you are planning in Bangalore, If it will have an annual turnover of 20 lakhs, register for GST. Make sure to visit the official website of the GST for the latest procedure.

11. Register for professional tax

Every business must register for professional tax according to section 5 of the professional Tax Act. Fill Form 1 and get a certificate of registration from the professional tax office.

12. Register with Employees' Provident Fund Organisation

It is a national requirement to register with EPFO for every business operating in India. Do this in a prescribed way to get an established code number.

13. Register for medical insurance for your employee

Every business needs an employee to work, and it is the responsibility of every business to look after their employee's well-being. Remember, a satisfied employee can take your business to new heights. After registering for medical insurance, you can maintain records of individual employee insurance on their behalf. You need to submit form 1 for registration according to the employee's state insurance. After registration, the business will get the employee code number for insurance.

Startup India

If you are wondering how to start a restaurant in Bangalore, a start-up India initiative begun by the government of India in the year 2015 under the leadership of Mr Narender Modi (prime minister of India) can provide significant help to you. First, let's understand what start-up India is, how it works, and how it can help your business.

The program can help you get the capital required to run and start the business under MUDRA bank schemes and the I Made program. To know more, please visit the government website created for these initiatives.

Start-Up India works on three pillars: interpretation and hand-holding of the business, funding provision and incentives for the smooth running of the company and promoting entrepreneurship, and partnership between industries and academia to grow the business with new ideas.

Through this initiative, the policies such as the License raj foreign investment proposal were abolished by the Department of industrial policy and promotion.

Conclusion

Be it an online or offline business, these legal steps are to be followed if you want to start a business in Bangalore.

Hence, if you have been on the lookout for guidance to start a Bangalore business, you must check out OKCredit’s Bahi Khata Management app at the earliest without any fail. You will surely get immense platform support from the staff here, and all your questions will also get answered in one shot.  

Also read:

1) Where to Get a Small Business License?
2) Legal Rights of Every Business Owner
3) What Are The Legal Requirements For Your Business Registration?
4) Ease of Doing Business in India -The Challenges & Opportunities
5) Manufacturing Companies in Bangalore

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FAQs

Q. What are the advantages and disadvantages if I start a Sole Proprietorship?

Ans. In Sole proprietorship, the profits and liabilities are on one person. It has various advantages and disadvantages:

Advantages

  • The registration process is easy and simple.
  • The profit obtained from business are directly accrued
  • The sole proprietorship is helpful for small business
  • It is flexible if someone is planning business for a small period

Disadvantages

  • The personal liability of the business owner can affect him
  • The business may find it challenging to get the loan
  • The business is non-transferable

Q. What are the minimum and the maximum number of directors, shareholders, and members in any Private Limited Company?

Ans. The minimum and the maximum number of directors, shareholders, and members in any Private Limited Company are:

  • The Minimum number of members in the private limited company should be at least two, and at most two hundred.
  • The minimum number of directors in a private limited company should be two
  • The minimum number of shareholders in a private limited company should be at least two and at most fifty

Q. Which is the best form of company to incorporate if I want to do a small business for a short period?

Ans. If you plan to start your own business for a short period, A Sole Proprietorship is the best form of company to choose. A sole proprietorship company is managed and controlled by one person only. The registration process is simple; hence it can be operated by a small business for a limited period.