Homeward Bound – Set Up a Home-based Business in India
A handy guide from 3E Accounting on how to set up a home-based business in India to make your entrepreneurial dreams come true.
India is the second-most populous country in the world and is expected to be an economic world power within the decade. Globally, India has the third-largest start-up base, and this is expected to reach a hundred thousand by 2025. As global events restructure the way we work, its time to get back to basics. The time is just right to set up a home-based business in India.
Home is Where the Business is
An industrious entrepreneur can make a tidy profit when they set up a home-based business in India. There are a variety of businesses that fit the bill, and some ideas include:
- Organic rooftop farm
- Bakery or patisserie
- Tiffin or ‘Dabba’ service
- Online yoga or meditation classes
- Online course creator or tuition class
- Dropshipping or digital marketing
- Share trading
- Tailoring service
Regulatory matters in India can be confusing, especially for first-time entrepreneurs. This is especially a significant concern for home-based businesses. The law is still being developed in this area and has an ad hoc application that applies at State and Central Government levels. Some places such as Pune, for example, explicitly exempt home-based businesses from needing any form of licensing. To be on the safe side, its best to engage consultants with industry expertise to help ensure everything is legitimate.
Company incorporation for your business and approvals will depend on:
- The industry or nature of business
- The scale of your operations
- Number of employees
- Capital invested
For those that do require a company, incorporation is done at the Ministry of Corporate Affairs (MCA). The type of company can be:
- Private or Public Limited Company (PLC or PC)
- Limited Liability Partnership (LLP)
- Partnership Firm or One Person Company (OPC)
Generally, for home-based businesses, a partnership or OPC might be the most suitable. Registration, start-up and operations cost and paperwork are more manageable. You will also need to apply for the following after receiving the Certificate of Incorporation:
- All tax registrations such as VAT, GST and service tax.
- MSME Registration for micro or small business to enjoy subsidies and benefits of loans, tax exemptions, etc.
Depending on the industry, certain business models will need specific licenses and approvals. Some of these include:
- Any food-related industry – approvals from the Food Safety and Standards Authority of India (FSSAI)
- Any trade inter-state or overseas – an importer-exporter Code (IEC) from the Directorate General of Foreign Trade (DGFT)
- Any multimedia broadcasting platforms – broadcasting license from the Ministry of Information and Broadcasting (MIB)
Starting With Strong Foundations
It’s never easy to start a business on your own. There are a million details that need to be attended to along with focusing and growing your business. Consultants such as 3E Accounting are ready to support your dreams by attending to the formalities while you focus on the big picture. 3E Accounting’s customizable business solutions can help you set up a home-based business in India seamlessly.
Contact 3E Accounting today and find out how to make your entrepreneurial ambitions a reality.