Looking to start a business in Kolkata? Then you are in the right place. In this article, we dive deep into certain steps almost any and every business needs to take before they spread out their wings.
These include some licenses needed, company registration, role of PF, etc. So let’s jump straight to it.
Things You Need To Know Before Starting A Business In Kolkata
Table of Contents
Decide On An Entity
The first and foremost is to decide on the type of entity you want to run. You have four options and to help you decide the ideal one for you, here’s a breakdown of each.
Company
You can choose between public, private, or a personal company. In case your business has a whole team behind it, a public or private company is the way to go. The minimum requirement to start a private company is two members and you can go up to 200 members.
On the other hand, public companies need seven members. But if you are a one man army, you’d want to go with a personal company.
Partnership Firm
If you are starting a company with a friend or family member then a partnership firm is the right choice for you.
Sole Proprietorship
This is a great option for anyone running a one man show. Small businesses, this is ideal for you especially if you want to avoid paying additional taxes.
LLP (Limited-Liability Partnership)
This is a combination of both a company and a partnership where no partner is responsible for the action of the other partner. Another reason to go for an LLP is that in case of insolvency, the losses are divided based on the contribution of each partner.
Once you decide on the type of entity, the next step is to get these licenses.
Licenses You’ll Need
Trade License
Almost every business requires a trade license. There are 3 types of trade licenses you can apply for based on the type of business you plan to run.
For example, a restaurant or cafe needs a food establishment license. A barbershop or laundry shop needs a shop license.
Lastly, small or medium scale industries need an industries license to kickstart things.
Things you need to apply for a trade license:
- You’ll need to submit an application in prescribed form U/S 199.
- Business Proof: Rent bill/ Tax bill/ Lease-deed
- If you are a Private Limited Companies then you need to submit these documents with an application
- If you are a Partnership Firm, you’ll need to give a Partnership deed
- Memorandum/Articles of Association
- Declaration in Form No. 32
- Form No. 18
- Proof of occupancy
Professional Tax
Any business or even individuals in West Bengal need to pay professional tax before the 31st of July.
Another thing you need to know about it is that Article 276 of the Constitution of India states that the tax cannot be more than 25k.
Here’s a stepwise guide for a hassle-free enrollment process:
- Visit West Bengal Professional Tax site
- There you’ll see a Click on the “Enrollment” link under the e-services section
- Then click on the “New” option.
- Choose the financial year for which you are paying the tax
- Choose the location of your workplace.
- Enter all the required info and hit the “continue” option.
Note: In case you are running a company with employees then you need to deduct professional tax from their salaries. You’ll also need a registration certification.
The slabs for this tax are as follows:
| Rs. 10,000- Rs 15,000 | Rs. 110 |
| Rs. 15,001- Rs 25,000 | Rs. 130 |
| Rs. 25,002- Rs 40,000 | Rs. 150 |
| above Rs 40,001 | Rs. 200 |
Service Tax
Are you into services? Well, if your services exceed 9 lacs per year then yes, there’s another tax you’ll have to worry about is the service tax. But what if my service is lower than that?
Well, in that case, it is up to personal discretion. To register for service tax, you can do it easily via the official website. If it’s for a single location, then it takes two days but if you have multiple locations then it can take about 7 days.
Provident Fund
If you are hiring 20 or more people then you’ll need to register for provident fund or PF. Keep in mind that you’ll need a digital signature for the registration which can be done online.
All employees with salaries above 15k per month are eligible for PF as per the Miscellaneous provisions Act,1952. For companies with less than 20 employees, they can extend PF benefits to their employees only after consent.
Documents needed for pf registration are:
The documents required for registration are-
- Copy of PAN Card.
- Address Proof of the company
- Bank account proof
- Certificate of Incorporation if it’s a company or a LLP
Conclusion
That’s a brief on what you’ll need to start a business in Kolkata. Licenses will vary based on the type of business you plan to run so make sure you look into each detail. Here are some business ideas in Kolkata which you can check out if you are looking to start some new business. And if you have any questions, drop them in the comments below and our experts will help you out.
