How to Start a Business in India - The Complete Guide

How to Start a Business in India - The Complete Guide

Deskera Content Team
Deskera Content Team
Table of Contents
Table of Contents

Aspiring to become an entrepreneur or businessman and setting up businesses have been rising tremendously among the people. In India, everyone, especially the youth, is looking to develop unique business ideas and create opportunities to grow. This, in turn, is reaping benefits for both the business and the economy at large.

India is a land of opportunities, and to start and manage the business more straightforwardly, the country is equipped with proper methods and planned strategies that can make your dream come true. Though starting a business can be a challenging task, now, due to smooth work procedures and operations, things have turned easy.

Therefore, your decision to start a business in India will be more rewarding than any other time.

In this article, we will be discussing the start to end process and provide you with a complete guide of starting a business along with the following:

• Overview about Businesses in India

• What are the types of businesses to start in India?

• Why is it good to start a business in India?

• 12 Step guide to start and plan your business

• Registration Process of Business in India

• Documents required at the time of Registration

• Benefits of the Registration process in India

• Business Registration FAQ

• How can Deskera help your businesses?

Overview about Businesses in India

What is at present is now very different from before!

Talking about the Indian business scenario, the business structure witnessed a paradigm shift over the years, providing immense opportunities for the upcoming and growing sectors of the economy.

There is no doubt that the Indian government played a vital role in transforming Indian businesses by opening doors to possibilities and encouraging them to take these to their best advantage.

With the changes in Macroeconomic reforms, finance reforms, tax reforms, and relaxing the market, India revamped the entire map of doing businesses in India.

As a result, the scope of doing business in India has grown in magnitude. With the Make in India campaign, more and more companies are entering the market, focusing on achieving their operational and business effectiveness and creating a brand in itself.

Now, doing business in India is not a tedious task. Instead, it is made simpler for everyone to access sources via the schemes and initiatives and expand the business globally.

With these facts, it is sure that Indian businesses have a very long way to go to leverage up to the best possible way.

"Transformation at the right place at the right time opened gateways in making India turn into a business magnate."

What are the types of businesses to start in India?

India welcomes any kind of business to get started. You have the freedom to choose and start any business in the sectors like Automobile, Financial services, Cement, Gems and Jewellery, Healthcare, Information Technology, Banking, Insurance, Media, Oil and Gas, Real Estate, Textiles, Tourism, Hospitality, Agriculture, Pharmaceutical, Food, and the list is endless.

So, as a business, you can either offer product or service based on the field.

However, these are the following businesses and platforms that you can start in India:

  1. Sole Proprietorship Firm
  2. Partnership firm
  3. Limited Liability Partnership
  4. One Person Company (OPC)
  5. Private Limited Company
  6. Public Limited Company

1. Sole Proprietorship Firm

A sole proprietorship business is owned and managed by one single person. The small traders and merchants come under this category. Under this form of business, the registration is recognized through service or GST registration.

2. Partnership firm

A partnership firm is a form of business where two or more individuals agree to come together and manage the business's operations, as mentioned in the partnership deed. The setting up of a partnership form is less complicated and is a viable option, especially for home businesses.

3. Limited Liability Partnership

A Limited Liability Partnership differs from an ordinary partnership in terms of the liabilities of the partners.

Under this, partners associated with the firm are protected from negligence, misdeeds, and incompetence by other partners that do not demolish the Partnership.

4. One Person Company (OPC)

Under One Person Company, the business owner enjoys twin benefits. First being a solopreneur, and second, being a promoter of the company. The person can enjoy the advantages of forming a company except Equity funding or offering employee stock option plans.

5. Private Limited Company

Companies are the most popular form of business structure that is practiced in India. By forming a company, you can take advantage of funding, limited liability, and attracting suitable acquisitions.

The company is bound to conduct meetings and file annual returns stated by government jurisdiction under the Ministry of Corporate Affairs.

6. Public Limited Company

A Public Limited Company certainly has more advantages than a Private Limited Company. These companies have the right to issue IPOs to the public, attract investors and enjoy flexibility. These companies are suitable for organizations that have a different perspective and higher growth possibilities. A few examples include SAIL, GAIL, BHEL, IOCL, and a few more.

So, these are the six types of businesses that one can start in India. It is recommended that before selecting any of the business forms, you must go through the detailed features, advantages, and disadvantages and cover every factor before you go forward with the formation process.

Why is it good to start a business in India?

India is now at a very progressive stage. As a result, it is opening up to represent in the different markets across the globe. The Indian government provides a favorable business environment for all the organizations to come up and make most of their plans.

As a result, it is now more viable for businesses to set up their businesses in India to maintain their stability and growth in the market. Adding to it, the businesses can also get the opportunity to work and explore in the international market.

Let's take a look at the primary five reasons highlighting the advantage of starting a business in India:

  1. Ease of Doing Business
  2. Increase in the Market Demand
  3. Cost-Effectiveness
  4. Provide Sustainable Business Environment
  5. Scope of employment

1. Ease of Doing Business

As mentioned before, the government policies and market have made the procedure of starting a business easy. With the introduction of business-friendly laws, liberalizing the market, and reducing the procedures for registration, the government is providing a great deal to help people in business ease out the mode of starting the business.

I went back to those days of long queues because now the whole process has turned online.

2. Increase in the Market Demand

The demand of the Indian market has been consistently high. From essential items to luxury items, people in India need a variety of everything.

Keeping in mind the pace of population, the demand for the items has been rising high, encouraging the businesses to take the advantage to grow in the respective sectors and fulfill the demand accordingly.

3. Cost-Effectiveness

The process to start a business in India is much more affordable than compared to other countries. You can get the advantage of the accessibility of land, labor, electricity & infrastructure helping you scale the production level. At this point, you will be able to achieve economies of scale, resulting in a drop in the overall cost of production.

4. Provide Sustainable Business Environment

India is a developing nation, and being a host of business activities, the Indian market provides a sustainable environment for any type of business to maintain stability and flourish on a large scale.

India has turned a favorable table towards businesses by supporting the livelihood for the upcoming years.

5. Scope of employment

This reason is an effect of the previous one. By providing a sustainable business environment, the businesses offer employment opportunities to the people belonging to the sector and enhance their living standards.

All of the reasons mentioned above sum up the purpose of starting a business in India.

12 Step guide to start and plan your business

Before starting up your business, you need to be thorough with your background. By background, we mean having a mindset to start a business and seeing it through, despite the odds.

Following is the 12 step guide to get started with your business that can help you to turn your business idea into a successful execution:

  1. Think and decide on a business idea
  2. Conduct Market Research
  3. Acquire Skills and Training
  4. Document the Business Plan
  5. Financing the business
  6. Start with the Development of your Product or Service
  7. Build your team
  8. Decide on the location
  9. Register yourself as a business
  10. Create and Maintain a website
  11. Start with getting sales
  12. Level up and grow your business

1. Think and decide on a business idea

Before getting your hands over the business, it is crucial to think and decide on doing the business.

Since there are many lucrative business ideas available, break them down and create pointers, seek guidance, research ideas, and consider every factor before you push the button to start your business.

2. Conduct Market Research

After getting the business idea, the next step is to research within the market to break down the suitability of your objectives. You can start by examining your potential competitors and partners to understand the profound insights and information of the particular industry.

Market research is vital and should be at the topmost priority.

3. Acquire Skills and Training

After the initial steps, the third important step is to acquire the relevant skills, training & experience that can turn your business into a fortune. Before starting a business, it is crucial to learn specialized training courses or acquire the skills by working in different organizations and clients.

Your past knowledge and experience in the specific industry can help you to build fresh perspectives for your business because, after all, no one can understand your business better than you.

4. Document the Business Plan

With so much learning at different stages, it is essential to document your business plan's evolving aspects like feasibility studies, project reports from start to end, and other details.

By having a full-proof document plan, you can present it better and give your thoughts and ideas a professional touch. This will also help boost the prospects interested in knowing your plan and preparing you for future conduct.

5. Financing the business

Finance is the lifeblood of the business. The businesses need to finalize the source of the funds necessary to start the business.

The step involves acquiring estimates, calculating finances, and figuring out reliable ways to fund the business.

Few of the major sources include banks, Financial institutions, Cooperatives, Crowdfunding, Angel Investors, Venture capitalists, or self-funding.

6. Start with the Development of your Product or Service

After covering the five significant steps, it is now the time to develop the product and service, setting the purpose of a business. While developing your product or service, it is essential to prepare a checklist of finding a manufacturer, setting the price strategies, crafting the product, creating the trial run of the service or product, etc.

7. Build your team

During the initial stages of development, it is only you who will be working for your business. Later, you will require a set of teams that can help you to scale a business. The team members are a partner, employee, or freelancer that best fits your needs.

8. Decide on the location.

Deciding your location is one of the crucial steps involved in starting a business. The factors of the area include your qualifications and the target market that best suits your business operations. Either it can be a small shop, stall, or a full-fledged office.

There should be no compromise on the location because your business is highly dependent on it.

9. Register yourself as a business

After finalizing the finances, product & location, it is now the time to register yourself as a business and mark your presence in the market.

You need to carry out all the formalities of starting a business and complete the registration process that is the first step towards the launch of your business.

10. Create and Maintain a website

The pandemic has already brought the world into an online saga. By having a website, you can maintain your brand's online presence and allow direct ordering and payment processes of the products and services.

It will also help to create a brand in the market and enhance trust among your customers.

11. Start with getting sales.

This step is your business's future. Even if you have started, it is crucial to generate revenues by applying different sales strategies and techniques to gather the customer's attention.

Identifying the target market, growing the customer base, putting ads, creating sales funnels, sampling, sales promotion, or any other strategies that can convert your leads into revenue can help your business live by.

12. Level up and grow your business

Without a growth plan, no business can exist for a long time. As a result, the business needs to indulge in different ways to grow and expand for a better sustainable future.

By leveling up, the business can start a new target market, acquire other businesses, expand their offerings, plan out to market themselves, and create a good customer relationship.

There are several other strategies like doing in-depth research, hiring good people, making superior products, and delivering beyond expectation to pave your way to build the empire that you have always dreamt about.

And you are done.

The ultimate blueprint for starting your business!

"A business is not only about money; it's about the idea, perspective & execution."

Registration Process of Business in India

The registration process of businesses in India involves certain legalities that one needs to go through to be on the right side of the law.

Business registration is a step to embark on your journey as a business person and evolve the future course of action.

Following are the fundamental steps that are necessary at the time of registering the business in India:

  1. Select a suitable name for the business
  2. Application for the Digital Signature Certificate (DSC) and Director Identification Number (DIN)
  3. Preparation of the documents
  4. Login to the portal and fill the form.
  5. Submit the documents

1. Select a suitable name for the business

The first step is to choose and select the name of your business.

Your business name is your identity, and hence the process of naming your business is integral.

The name should be strong, unique, and well-aligned with your purpose that the people can remember.

While registering the business name, you need to ensure that your name doesn't match any other brand or company.

After you are done with the inspection, you can register your business name with the Registrar.

2. Application for the Digital Signature Certificate (DSC) and Director Identification Number (DIN)

As per the Information Technology Act'2000, the business must use digital signatures on the documents submitted in electronic form. For this, the business needs to apply for the Digital Signature Certificate as proof of valid documents. This will help to ensure the security and authenticity of the documents filed via online means by the person.

Similarly, the Director Identification Number is allotted to the individual appointed as a director of the business. The person needs to apply the form of DR-3 and obtain the number for registration.

3. Preparation of the documents

Preparing the documents required at the time of business registration depends on the type of business you are going forward with. There are different sets of documents and requirements to incorporate your business as a private limited company, OPC, Partnership firm, or other company.

It is recommended to list out the essential documents in advance that must be attached within the registration process.

4. Login to the portal and fill the form.

After you prepare the documents and complete the initial process, you are open to registering your firm or the business. Since the process has turned online, you need to fill the application form for Registration.

5. Submit the documents

After filling in the application form, the next and final step is to submit the documents in the PDF format that completes the registration process.

In this step, you will be required to pay the registration fees, and after the successful payment, you will obtain a registration number that you can use to track the progress of registration.

After cross-examining documents and getting a thorough check, your business will be successfully registered in the business books.

And now you are all set to start your business legally!

Documents required at the time of Registration

Before starting a business, it is essential to understand the documents required at the time of registration. All of the documents act as legal proof to start your business and meet the legal requirements in India.

As mentioned in the registration steps, the documentation requirements of businesses are different. You need to keep a check on documents prepared accordingly.

The list of standard documents required for the registration are as follows:

  1. Founder agreement
  2. Certificate of incorporation
  3. Business PAN Card
  4. Tax Identification Number (TIN)
  5. Digital Signature Certificate (DSC)
  6. Goods and Services Taxpayer Identification Number (GSTIN)
  7. Address Proof
  8. Other suitable documents

1. Founder agreement

The founder's agreement is an official contract signed by the founder of the firm. If there are co-founders, then both are required.

It also includes Photographs, Pan card & ID proof details of the Directors, Partners, or the Proprietor associated with the business.

2. Certificate of incorporation

The Certificate of Incorporation is a legal document that makes your business formation legal and brings the business into existence.

3. Business PAN Card

The PAN card of the business is a must-have document required for registration.

4. Tax Identification Number (TIN)

The Tax Identification Number (TIN) is a unique 11 digit number serving as the identity of the business

5. Digital Signature Certificate (DSC)

The Digital Signature Certificate acts as legal proof to use the signature of the business for official purposes.

6. Goods and Services Taxpayer Identification Number (GSTIN)

The GSTIN is mandatory for businesses, and the taxpayers are assigned a PAN-based 15-digit number.

7. Address Proof

Bank Statements, Electricity bills, or any other utility bill that can act as legal address proof of the registered office.

8. Other suitable documents

Based on the choice of business organization, you will be required to set the other documents pertaining to the same.

Benefits of the Registration process in India

With the advent of the internet and the smooth registration process, India offers many benefits in availing the effects of registration for businesses.

Let's take a look at a few of the benefits in carrying out the registration process:

  1. Ease in the transferability or sharing the ownership of the business
  2. Ease in opening a bank account and tax registrations.
  3. Facilitates funding for the business
  4. Reduces in various tax exemptions
  5. Facilitates business transactions with corporations
  6. Accessibility to resources and customers
  7. Hassle-free working process

Business Registration Frequently Asked Questions (FAQs)

After the complete and detailed guide of starting a business in India, let's take a look at the FAQs about Business Registration:

Q1. How to choose the form of a business organization?

Answer: There are various factors that one must keep in mind before deciding the form of business. The common characteristics include business structure, nature, members, types of product or service. After collectively looking at all the elements, you can decide which business to incorporate.

Q2. Which is the best form of business organization to incorporate for a short period?

Answer: A sole proprietorship is the best form of organization that you can choose to undertake your operations for a short period. The registration process is also simple and easy, suiting the requirements.

Q3. Which is the best form of business organization to incorporate for a more extended period and stability

Answer: A company or a partnership firm is the best form of business to incorporate for a more extended period. The registration process is lengthy and time-consuming, but you will enjoy all the rights of owning the company after that.

Q4. What is a Nidhi Company?

Answer: A Nidhi Company is incorporated to cultivate the habit of spending, save among the members via regular deposits, and provide mutual benefits to each other.

Q5. Can more than One Person be a part of One Person Company?

Answer: No, as the name suggests, only one person will be associated as a member, director, or shareholder of the company. However, the person must appoint one nominee who will undertake activities on his behalf due to the person's unavailability.

Q6. What are the advantages of a Limited Liability Partnership?

Answer: With the incorporation of LLP, you will be entitled to the limited liability of partners, perpetual succession, decision-making power, and simplified incorporation procedure as advantages.

Q7. What are the prescribed number of members, directors, and shareholders in LLP?

Answer: The prescribed number of LLP members includes a minimum of 2 and maximum as not defined. They are not entitled to become directors or shareholders.

Q8. Can a private limited company float shares to the general public?

Answer: No, the Private Limited Company cannot flow shares to the general public.

Q9. What is the document issued for different business organizations in India?

Answer: The document issued for different business organizations in India are as follows:

  • A sole proprietorship doesn't require any registration, but yes, a tax certificate acts as a legal document.
  • Partnership Deed is the document for Partnerships
  • Certificate of Incorporation is the documents for companies


The Government of India is looking forward to scaling up the business sector of the country. Hence, the policies of Ease of doing business and capturing the business capital globally, India aims to provide a wide variety of options to start the business and conduct the activities successfully. The entire process has turned online, making it convenient for everyone. The government is supporting the process by digitizing the methods of registering a business in India. With the help of schemes and initiatives, the aim of owning a business has turned successful.

How Can Deskera Help Your Businesses?

Deskera is an all-in-one small business software that handles your accounting, financial reports, payables and receivables, taxations, invoices, invoice reminders and many such business activities all at one place and at the same time.

It also has an advanced inventory management system that can keep a track of the multiple warehouses, stock transfers and adjustments and bills of materials to mention a few functions.

Through its automated system, Deskera books also make it possible for your business to always give timely deliveries to your customers. This will increase their satisfaction with your business and ensure their return to you.

By being affiliated with various banks and payment options, Deskera books will also make it easier for your customers to make your payment which will hence improve your cash flow balance. A positive cash flow will facilitate the growth and development of your business which in turn will earn you more revenue.

Deskera books will manage your sales and orders from their start till the finish, and will also make the invoices on your behalf and send them to your customers. If the invoice payment is delayed, it will also take follow-ups with your customers- or at least remind you to do so.

Deskera books will also assist you to pick pack ship your orders as well as track your drop shipped orders.

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Further on, Deskera CRM will help in contact and deal management, sales pipeline, email marketing campaigns as well as customer support to mention a few important functions.

All in all, Deskera will enable you to track your business’s key performance indicators in real-time, facilitate faster and well-informed decisions and improve cash flow for your business.

Key Takeaways

And here we are at the end of the article covering A to Z about starting a business in India.

Let's take a look at the key takeaways of the article:

  • India is a land of opportunities to start and manage businesses.
  • There has been a paradigm shift in the Ease of doing business and providing opportunities for growth in India.
  • There are six types of businesses that one can start in India- Sole proprietorship, Partnership, Limited Liability Partnership, One Person Company, Private Limited Company, and Public limited company.
  • India is at a progressive stage, and it is viable for businesses to set up their business in India.
  • The advantages of starting a business in India are the Ease of doing business, cost-effectiveness, increase in market demand, the scope of employment, and a sustainable business environment.
  • There is a 12 step guide to get started with your business idea into successful execution. The steps are vital, from thinking and deciding on a business idea to leveling up and growing the business.
  • Five fundamental steps facilitate the registration process of business in India. The steps include selecting a name for the business and the final submission of documents.
  • Documents act as legal proof to start your business. The primary document includes PAN, DSC, GSTIN, address proof, and other documents.
  • Due to the advent of the internet, there are few benefits of carrying out the registration process in India
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