IT Business is the need of the hour in this dynamic society therefore, if you are planning to start an IT business than the very first step towards it is, to get license and registration for such business. While starting an IT Business the entrepreneur faces many issues so the Central Government has taken measures to promote the upcoming IT start-ups and had provided relaxation in tax payments and regulatory preconditions.
LICENSING AN IT BUSINESS
For conducting a business there may arise need for a number of licenses, for example trade license, taxation registration etc. Such particulars are seriously looked while by legal due diligence before forgoing investments
ESSENTIALS FOR LICENSING OF A BUSINESS
Licensing is done by taking into consideration the local jurisdiction in which the business is to be started. So you need to obtain the license from the federal, state, and local government. So prior to opening of the business we need the license to conduct the business:
- PAN (Permanent Account Number), Digital Signature and DIN (Director Identification Number)
- Certificate of Incorporation
- Royalty Fees for Technical Services.
- Name Approval
- Filing for Charter documents of a company (MOA, AOA, Prospectus)
- Appointment of Auditors
- Board Meeting and AGM (Annual General Meeting)
- GST
These points have been incorporated in the Companies Act. These documents need to be fulfilled for getting a license. There are often many licenses, registrations and certifications required to conduct a business in a single location.Therefore, every type of business will be governed by discrete types of law and its violation will result into penalty. The penalty for running an IT Business without the license will result into costly legal suits, hefty fines and Business shutdown.
REGISTRATION FOR IT BUSINESS
While registering your business, it is very important for you to rightly structure your business so that it would rightly operate with efficiency and would meet all the business targets, missions and objectives of the business that had been priory made by the different departments of the business. Therefore, business registrations are a legal compliance that must be necessarily done by the businesses.
The types for structuring a business are explained:
1. Partnership Firm– In this business structure a group of people carry on the business altogether and share the profits and losses incurred. The group of people are known as partners of the business and are the owners of the business, they are not called employees as they have rights to regulate a business and take decisions accordingly.
2. Limited Liability Partnership– This structure comprises of combination of a company and partnership that incorporates the good points of both to run a business. The liability of the partner is only to the extent of his acts and to the extent of his contribution of the capital. There is no limit for the maximum number of employees in the LLP.
3. Private Limited Company– This type of business structure has shareholders and directors to run a business and is privately held by people. This type of company has greater stability and legal entity. They can even have two directors and also enjoy tax benefits.
4. Sole Proprietorship– This type of business structure involves in making you the sole owner of the business. In this the business is controlled and managed by a single person and he is solely responsible for all the matters of the business, whether it is the profit or loss incurred in the business. So, keeping in mind the above factors, the business must be registered in the best structure according to the need. For running a smooth business the license obtained and registration done must be the first step for starting an IT Business
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