How to Start a Business in Mumbai? Legal Steps to be followed

Mumbai is a metropolitan city with a vibrant business environment, making it easy for anyone to start a business in Mumbai. Starting your own business provides you with independence and financial rewards.

Don't we all dream of having our businesses, being our boss? There are times when we have some great ideas, and all we want to do is start something of our own. If you are all set to start a company, here are a few legal steps to keep in mind for starting your business in Maharashtra.

Starting your business gives you learning opportunities and offers a feeling of self-satisfaction. So if you plan to become an entrepreneur and wonder how to start a business in Mumbai or the legal steps to start a business, you are at the right place.

In this article, we are going to see the steps to start a business in Mumbai.

1. Register your company/start-up/business

The legal process while registering the company and making sure that the company complies with the employment law can be pretty tedious; some of the essential steps are:

The first step to starting a startup in Mumbai is ensuring that you register your business first. The registration process will vary depending upon the type of business you will start, e.g., employed, limited, partnership. Is it still unclear how to register a startup in Mumbai? It is straightforward and requires only four steps.

Get your Digital Signature Certificate (DSC)
Acquire Director Identification Number (DIN)
Make your account on the MCA portal, i.e., New user registration @ mca.gov.in
Make sure you Apply for the company to be registered.

2. Documents needed to register your startup:

When it comes to documentation, then it is one of the most important steps. This is where primary errors happen. The company owner needs to have in place all the official and relevant documents while registering the company. Even if one document is missing, then getting the company registered would become very difficult.

Here is the list of documents you need to keep ready to register your startup:

DSC – Digital Signature Certificate
Form-1( for incorporation of a startup/ business)
Form-18 (for situation or address of the company)
Form-32 (for directors, managers, and secretary)
letter issued by ROC regarding (original copy) availability of Company name
Direct identification number of directors of your company

3. Get insured:

Many times, we do the registration part and take insurance for granted. However, as company owners, we must think about the company's well-being and immediately get the company insured no matter what. One should not try to save cost here, as this is an investment you will make for the company's overall advantage.

Getting the business protected is very important. It protects company-owned properties or lawsuits. It can be done only with the insurance company, which can run smoothly even after financial losses arise due to bodily injury.

Every business hires employees to get their work done; hence, employer's liability insurance is essential for every business. It compensates in case any employee gets injured or falls ill in the workplace. If your business is related to healthcare, make sure you have indemnity insurance; this will cover the compensation given to our customers if any damage is done due to negligence.

Cyber insurance ensures data security, and commercial property insurance is a good option for a business before starting a business.

4. Comply with your business with data laws:

No matter how big or small your business is or the turnover of your business you plan to set up. It is crucial to make sure that you take the necessary precautions for data security. The company's responsibility is to make sure that you keep your staff updated and aware of what purpose their data might be used in your industry. Make sure you use good software to keep the data protected.

5. Do a background check of employees:

How to start a company in Mumbai? Will it be profitable? All the answers to these questions depend on what kind of employees you hire. A good employee will be dedicated to the job and provide more remarkable outcomes. It is vital to do a background check of your employee. Hire an employee with clean records (no criminal records).

6. Make clear and price terms and conditions of employment:

Provide an employee with the terms and conditions of the employment in written form within two months from their start date. This will also help your employees to have a clear understanding of their roles and responsibility.

It must include:

Name and address (employer and employee)
Joining date
Date contract will apply from
Services date
Type of employment (Permanente, temporary, intern)
brief description of roles and responsibility
Place of work
Number of working hours
Pay – how often and when
Holiday
Sickness leaves
Salary-
Notice period(employee)
Pension arrangements (if any)
Discipline of organisation
Agreements (if any)

7. Health & Safety:

Make sure you talk about all the precautions at the workplace to keep your employees safe. Have the policy to maintain a safe work environment. Risk assessment to identify any potential threat and plan how you will minimise or handle it to keep your employees safe.

Training the employees to work safely and having a policy for it that is updated is a must to do for any business. In addition, having a reasonable plan to keep your employee safe can rescue the incidence of claims during the accident.

8. Provide Equal opportunities to everyone:

It is illegal to differentiate or discriminate against employees based on their race, gender, or religion. While selecting an ideal candidate, look for skills that justify the job profile. Remember, A happy and satisfied employee can help a business to grow to new heights.

Conclusion

It is always good to know the legalities of starting a business. The steps mentioned in this article, if followed correctly, will help you to not only start a business but also to grow.

Also Read:

1) Why You Should Have A Joint or Independent Account With Your Business Partner?
2) Things Business Owners Should Do If They Can’t Pay Credit Card Bills
3) How To Charge for Your Services if You Are an Event Planner?
4) How to Answer the Phone Professionally at your Business?

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FAQs

Q. How much are the company registration fees in Mumbai?

Ans. For any startup, indeed, company registration is really important. However, the company registration fees depend on multiple factors, like the type of entity you are registering. When it comes to registering a partnership firm, it is very cost-effective compared to any other type of registration, but there are some limitations. In the case of an LLP, it is again quite reasonable. One of the other options is to register a company as a 'One Person Company or a private limited company. Company registration in a private limited company is costlier than any other type of company registration.

Q. How to register a private limited company in Mumbai?

Ans. In the technological era we have been living in, it has become really easy to register a private limited company in Mumbai. Here are a few steps you need to follow to register a private limited company:

A: First, there need to be at least two directors who have authorised pan card, driving license, election id card, and Aadhar card with themselves.

B: The directors and stakeholders will be required to take digital signatures

C: A utility bill along with the address of the director is considered to be a must to get a DIN (director identification number)

D: The directors will be required to give the address of the registered office. Supporting documents are also required to be presented along with the registered office, such as water or electricity bills, etc.

Q. How much time does it take to register a new company in Mumbai?

Ans. Usually, it takes about ten working days to complete all the mandatory legal procedures. After the authorisation is done, the company must file the business commencement form in the company's registrar to initiate the business's operations.