Entrepreneurial aspirations are on the rise among youngsters across India. The reason is that there are so many technological opportunities available in the country at the moment that make starting a business quite simplified. If you are a resident of Rajasthan and wondering what the legal steps are to start a business in the state, here are the basic details.
Here are the startup eligibility criteria's in Rajasthan:
- Age of the company: Startups should not be more than 10 years old from the date of incorporation.
- Nature of the company: If your startup is incorporated as a private limited company of Rajasthan or running as an LLP or it is a registered partnership firm
- Annual turnover - The annual turnover of the company should not be exceeding Rs 100 crore.
- New entity: The business entity you are planning to run in Rajasthan must not be created by restructuring or splitting any of the existing entities.
- Innovative and commercially scalable business entity - The business you are planning to set up in Rajasthan must contribute to increasing the employment opportunities for residents of Rajasthan.
Legal steps to start a business in Rajasthan
1. Select the type of business
Before starting any business in Rajasthan, an entrepreneur has to choose the nature of the business and define the vision and mission of the same. The vision of the business works as a plan of action for employees. Do a proper market analysis and then zero in on a vision. Having a vision is of utmost importance. You can find many business ideas online.
2. Registration of business entity in Rajasthan
After deciding on the nature of the business plan, work on the registration of the business entity. If the business is large-sized, it is better to register the company in Rajasthan as a private limited company, and if it is a small or micro company, then it can be registered as a limited liability partnership or proprietorship. When you are a resident of Rajasthan going for legal registration of the company, you are required to submit the documents pertaining to all the directors or partners of the company. Before legally registering the company, you can also consult business advisors.
3. Apply for PAN for the business
Whenever you are planning to start a business in Rajasthan, you must apply for PAN by downloading form 49 from the NSDL portal. You can even ask for an e-PAN card, it is generated in 48 hours and delivered to the requested address within 15 working days. It is one of the most important legal steps to start a business in Rajasthan.
4. Apply for TAN
As per the Government of India, it is a mandated legal step to apply for TAN, when you are planning to start a business in any part of India. TAN is applied and issued by the Income Tax Department of India to all those business entities who are legally liable for making tax deductions at the source. To apply for TAN, one has to fill form 49B and post filling, submit it to the nearest TIN facilitation center.
5. Obtain a certificate from a Municipal Inspector according to the Shops and Establishment Act
Whenever you are planning to start a business in Rajasthan, get permission from a municipal inspector. The certificate issued states employer details like name, company’s permanent postal address, designation, nature of business, date of commencement, etc. It is one of the most important legal steps to follow to start a business in Rajasthan.
6. Apply for a Profession Tax Certificate
Each of the business entities is legally entitled to taxation being a resident of India. Whether you are planning to start a business in Rajasthan or any other state, the company is required to fill in Form 1 and submit it to the State Profession Tax Office.
7. Opening a bank account
It is one of the most important steps to follow when you start a business in Rajasthan. Open a bank account in the name of a registered company. Whether you are having a private limited company, LLP or one-person business entity, you can easily open a bank account by providing the PAN card details of the business entity. When you have a bank account, business activities become more transparent. The bank easily grants you a loan.
8. Must be having a necessary tax registration
Based on the kind of business you are planning to start in Rajasthan, there are tax registrations you need to do. Here are the common tax registrations which are mandated for each of the business entities.
- GST registration: GST registration is necessary for a business entity or company whose turnover is exceeding Rs 20 lakhs.
- TAN registration: TAN registration is a mandate for a company. If you are having more than 20 employees working in your company, you need to make tax deductions at the source.
- ESI registration: If you are having more than 20 employees working with you, it is important to make ESI registration in the name of the company.
- Shop and Establishment Act - This license is required, if you are planning to open a shop, restaurant or any food joint in Rajasthan. The act states the following information like working hours, the total number of employees, payment of wages, safety and health measures, etc.
- Import and export code: It is also known as the IEC code. It is required whether you are an import or export business. It is one of the most important legal requirements for running such a business. It makes it easier to dispatch shipments and transfer money to foreign banks.
9. Maintaining of accounts and compliances
After you complete the necessary registrations, the most crucial thing to take care of is setting up an accounts and compliance system. When you start a business in Rajasthan, maintain the financial records and books of the business. To avoid facing any financial crisis or obstacles, newly established businesses always keep an eye on the cash flow, set budgets, make profit and loss reports, and share the financial details with the stakeholders frequently.
10. Work on brand protection
The brands or services you are planning to sell off to prospective customers are one of the main assets of your business. So, work on the legal ways to protect intellectual property rights. The intellectual property is a company’s trademark, industrial designs, software copyright, patent, etc. Many startups are giving less priority to brand protection. It is due to a lack of knowledge and understanding of the significance of intellectual property rights.
11. Apply for a company seal
One of the legal steps you are required to follow is applying for a company seal. When you are signing any contract or going through the process of legal documentation, it is a must to present each of the documents to anyone along with a company seal imprinted on the same. The cost incurred on applying for a company seal depends on the validity. Still, there are many companies, like startups, which do not have their company seals. But having a company seal boosts the credibility of a business or a brand or both.
If you want your business to run smoothly, avoid facing any legal obstacles. Follow all the legal steps mentioned above to start a business in Rajasthan.
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Q. How can I set up a business in Rajasthan?
Ans. You are required to fill in an online request with the Registrar of Firms of the area where the business is located. Before starting the business operation, register with the SSO portal. An applicant will be provided with an SSO Id and Password to log in.
Q. What is the significance of BRN numbers in Rajasthan?
Ans. The Business Registration number in Rajasthan works as an identification number for a business. When you are planning to start a business in Rajasthan, this number will help the authorities concerned. It becomes easier for them to know more about the nature of the business.
Q. What documents are required to apply for a partnership firm in Rajasthan?
- Firm name
- Name, age, address, PAN, Aadhar details of partners
- Details of investment of capital
- The profit-sharing ratio for partners
- Bank details
- Duly signed documents like bills, promissory notes, securities, bonds, etc.