Legal Steps to Starting a Business in Uttar Pradesh

India has changed remarkably in terms of the process needed to start your own new business. Previously, the erratic actions of the former License Raj and the inward-looking Indian economy at large bogged down the process. However, in today’s increasingly globalised world, the legal formalities for starting a business in India have become fairly simplified.

In 2014, India ranked 142nd in the Ease of Doing Business Index and ranked 139th in the Ease of Starting Business ratings. However, a host of reforms from the Central government, especially the INC-29 policy reformation in 2015 administered by the Ministry of Corporate Affairs, have made this cumbersome process quite hassle-free. Currently, India has improved its Ease of Starting a Business ranking – in 2019, it ranked 63rd.

The startup scene is also heating up. In 2020 alone, India registered at least 12 start-up unicorns that secured seed capital beyond US$ 100 million.

All the states are doing their bit to encourage entrepreneurship, including Uttar Pradesh. However, you must follow some legalities if you want to build something in this entrepreneur-friendly state. These are the legal steps to start a business in Uttar Pradesh:

Step 1:

Obtain a DIN or Director Identification Number from the Ministry of Corporate Affairs portal. It takes about 1 day to process and costs around Rs. 100. Up to 3 directors can apply for a DIN number for each registered business.

Step 2:

Obtain a Digital Signature Certificate online from any authorised private agency. You can find a list of such registered outfits on the official Ministry of Corporate Affairs page. This process takes up to 3 days to complete, and the cost is around Rs. 1500. However, a few private outfits may charge higher depending on the convenience fees, platform fees, and any other method to expedite the process.

Step 3:

Next, look up the Registrar of Companies or RoC, an online repository. Check whether the company name of your choice is available for reservation. Otherwise, you might have to enter into an agreement with the current trademark holder. This company name registration process is seamless and can be done within 48 hours, at a cost of around Rs. 500.

Step 4:

Get your company documents stamped at the state treasury or any authorised private bank. This process takes around 1–2 days to complete. The charges for this process vary depending on the capital size and the Memorandum of Agreement signed.

Step 5:

Now, you must obtain the Certificate of Incorporation from the RoC and the Ministry of Corporate Affairs. This is a long process and can take up to a week to complete due to the sheer amount of paperwork and verification involved. The process can also cost around Rs. 14,000.

Step 6:

Get your own Private Business Seal to make your business processes official. It usually costs around Rs. 500, depending on the number of seals required and the delivery period you opt for. The process can take one day.

Also Read: Manufacturing Companies in Ghaziabad

Step 7:

Next, get your Permanent Account Number (PAN) from any authorised ITR franchise or an Income Tax agent as appointed by the National Securities Depository (NSDL) or by the Unit Trust of India (UTI) Investors Services, as outsourced by the Income Tax Department. This process can take up to 7 days, and costs around Rs. 100.

Step 8:

Then, get your business a Tax Account Number (TAN) for income tax deduction at the source. You may obtain this from the Assessing Office at the Income Tax Department in Lucknow. This process takes around 7 days for Rs. 100.

Step 9:

Register your business with the Office of Inspector, Shops, and Establishment Act at the state level, instituted in Lucknow. This process is important and takes around 48 hours to complete. The charges are over Rs. 6,500, depending on the nature of business and the scale of operations, among other factors.

Step 10:

Register your business for Goods and Services Tax and acquire the GSTIN number required to file for ITR returns. This can be done in any regional or state-level GST office within a week. This is one of the most crucial steps for starting your business in Uttar Pradesh, or anywhere in India. The fees for this process can go up to around Rs. 600, depending on the services you prefer.

Step 11:

This is the last of the legal formalities for starting a business in India. Register for the Employees’ Provident Fund Organisation at the national level at no cost. This makes your business more legitimate and bestows rights on your employees as well. This takes around 12 days to complete. After this, you can also choose to register your small business with the National Insurance Corporation for medical insurance-related exemptions and policy plans for your employees.

Uttar Pradesh is the largest state in India in terms of its political representation and one of the largest in terms of population density. This means that your business will have a significantly large local and culturally connected market. It also has great labour resources in the skilled as well as unskilled categories. This offers an added advantage to setting up your business in Uttar Pradesh. For instance, Samsung recently shifted one of its major production units from China to Noida, Uttar Pradesh in India.

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FAQs

Q. What is the first step to starting a business in Uttar Pradesh, India?

Ans. The first step to starting a business in Uttar Pradesh is filing for a DIN number and registering your business trademarks under the RoC and the Ministry of Corporate Affairs.

Q. Is it profitable to start a business in Uttar Pradesh?

Ans. Yes. Uttar Pradesh is one of the largest and one of the most densely populated states in India. It has a vast market size and a high population of both unskilled and skilled labour. It is a great place to start a business in India.

Q. What is the cost of applying for a GSTIN registration?

Ans. The cost of registering your business for a GSTIN number varies depending on the nature and scale of your business and the agency you have chosen to register it through. The GSTIN registration fees are usually around Rs 6,500–10,000 rupees, all-inclusive.

Q. What can I do if my preferred company name has already been trademarked?

Ans. You can check whether your company name is available for a trademark on the official page of the Ministry of Corporate Affairs. If it has already been trademarked, you can opt to enter into an agreement with the owner of the trademark to continue using it.

Q. Is there any requirement for a PAN registration to start a business in Uttar Pradesh?

Ans. Yes, registering yourself for a PAN card is essential to start a business in Uttar Pradesh, and for any business operation for that matter. Even your employees must submit their PAN card details to ensure income tax benefits and timely payment reimbursements.