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A Person Has Decided to Start a Small Leather Belt Manufacturing Unit. He/She is Not Aware of the Various Formalities Involved in the Process of Setting up the Unit. Explain to Him/Her the Procedure. - Entrepreneurship

Answer in Brief

A person has decided to start a small leather belt manufacturing unit. He/she is not aware of the various formalities involved in the process of setting up the unit. Explain to him/her the procedure.

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Solution

Various formalities are to be followed for starting a business in India:
(i)Obtain PAN Number from Income Tax Department
(ii)Open a Current Account in any commercial bank.
(iii)Register a limited Liability Partnership (LLP).
(iv)Register company (Pvt. Ltd/Public . Limited Company)
The following steps are involved in incorporating a private or public company in India:
(i) Name of the Business Entity
(ii) Register for e-filing at MCA (Ministry of Corporate Affairs) portal
(iii) Apply for Director Identification Number (DIN)
(iv) Obtain Digital Signature Certificate (DSC)
(v) Register DSC at MCA website
(vi) Apply for approval of the name of the company
(vii) Formulate Memorandum of Association
(viii) Formulate Articles of Association
(a) Verify, stamp & sign Articles of Association
(b) Verify the various forms required for incorporation of company
(c) Register for Service Tax
(d) Register for VAT/Sales Tax
(e) Excise Duty (If Applicable): Apply to the nearest Central Excise Division Office in Form A. 1 along with a self-attested copy of the PAN issued by the Income Tax Department.
(f) Shop and Establishment Act: Shops and Establishment Act is a state act and therefore State Specific Shops and Establishment rules should be followed for getting knowledge on registration and maintenance of different registers.
(ix) Customs Duty: Customs Duty is levied on goods imported into India as well as on goods exported from India.
(x) File Entrepreneurship Memo¬randum at DIC (Optional):Entrepreneur may file Part I of Entrepreneurs Memorandum to the District Industries Centre. This may be necessary for claiming certain incentives/subsidies and for certain formalities at the state level.
(xi) Apply for TAN: All persons who are required to deduct tax at source or collect tax at source on behalf of Income Tax Department are required to apply for and obtain TAN.
(xii) Permissions required at the construction stage.
(xiii) Employee’s Provident Fund:Applicable for establishments employing 20 or more persons and engaged in industry.
(xiv) Employee’s State Insurance (ESI) Scheme: The Act is applicable to non-seasonal factories employing 10 or more persons and is extended to shops, hotels, restaurants, cinemas including preview theatres, road- motor transport undertakings and newspaper establishments employing 20 or more persons.

Concept: Business Plan
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APPEARS IN

CBSE Class 12 Entrepreneurship Textbook
Chapter 2 Enterprise Planning
Hots Questions | Q 1 | Page 89
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