Legal Steps to Start a Business in Tamil Nadu

Starting a new business in India hasn’t really been a cakewalk. Earlier, licenses and registration filings slowed down the entire process of setting up a business quite significantly. However, in today’s increasingly outward-looking economy, these processes have been simplified to a large extent. In fact, the government supports new businesses with programs such as Start Up India and Invest India.

Not too long ago, India was ranked 142nd out of all the nations in terms of the Ease of Doing Business Index and ranked 139th in terms of the Ease of Starting a Business ratings. A variety of reforms from the Central Government, especially the INC-29 policy reformation in 2015 administered by the Ministry of Corporate Affairs, made this cumbersome process quite hassle-free. Currently, India has improved its Ease of Starting a Business rankings - it is now ranked 63rd as of 2019.

In 2021, India registered at least 21 startup unicorns that have secured seed capital beyond US $ 100 million. This is motivating Indian youths in various states to consider entrepreneurship.

In this respect, there are a few legal steps that you are required to take to start your own business in the state of Tamil Nadu, India. These are as follows:

Steps by step legal process to start a business in Tamil Nadu

Step 1:

Obtain a DIN or Director Identification Number from the official Ministry of Corporate Affairs portal online. It takes about 1 day to process and has a basic cost of around 100 rupees. Upto 3 directors can apply for a DIN number for each registered business.

Step 2:

Obtain a Digital Signature Certificate online from any authorised private agency. You can find a list of such registered outfits on the official Ministry of Corporate Affairs page. This process takes upto 3 days to complete and the cost is around 1500 rupees only. However, a few private outfits may charge higher fees,  depending on the convenience fees and platform fees and any other method to expedite the process.

Step 3:

Then you must check out the online repository called the Registrar of Companies or RoC to see whether your selected Company name is available for reservation. Else, you might have to enter into an agreement with the current trademark holder. This company name registration process is seamless and can be done within 48 hours and at a cost of around 500 rupees.

Step 4:

Next, stamp the company documents at the state treasury or at any authorised private bank. This process takes around 1-2 days to complete and the charges for this process vary depending on the capital size and the Memorandum of Agreement signed.

Step 5:

Get your Certificate of Incorporation from the RoC and the Ministry of Corporate Affairs. This is a long process and can take up to a week to complete due to the sheer amount of paperwork and verification involved. The process can also incur charges of around 14000 rupees.

Step 6:

Get your own Private Business Seal to make your business processes official. It usually costs around 500 rupees depending on the number of seals required and the time period of delivery opted for. The process can be done in one day.

Step 7:

Next, get your Permanent Account Number (PAN) from any authorised ITR franchise or an Income Tax agent as appointed by the National Securities Depository (NSDL) or by the Unit Trust of India (UTI) Investors Services as outsourced by the Income Tax Department. This process can take up to 7 days and costs around 100 rupees.

Step 8:

Then, get your business a Tax Account Number (TAN) for income tax deductions at the source from the Assessing Office in the Chennai Income Tax Department. This process takes around 7 days and costs around 100 rupees.

Step 9:

Register your business with the Office of Inspector, Shops and Establishment Act at the state level, instituted in Chennai. This process is important and takes around 48 hours to complete. The charges are over 6500 rupees depending on the nature of the business and the scale of operations, among other factors.

Step 10:

Register your business for Goods and Services Taxes and acquire the GST IN number that is required to file for ITR returns. This can be done at any regional or state level GST office within a week. This is one of the most crucial steps for starting your business. The fees for this process can go up to around 600 rupees depending on the services you prefer.

Step 11:

Then, register for the Employees' Provident Fund Organisation at the national level at no cost. This makes your business more legitimate and bestows rights on your employees as well. This takes around 12 days to complete. After this you can also choose to register with the National Insurance Corporation for medical insurance-related exemptions and policy plans for your employees.

For your new business, you will have a large pool of talented, fresh college graduates from the reputed universities in Tamil Nadu. The state also has great labor resources in skilled as well as unskilled categories. This offers an added advantage for setting up your business in Tamil Nadu.

We hope that our in-depth article on legal steps to start a business in Tamil Nadu turned out to be useful for you. Keep visiting us for more such informative articles on business tips. You can also check out our app OKCredit, that can help you manage your financial transactions.

Also Read:

1) How to start Crane and Lifting Service?
2) How to start a commercial and industrial machinery rental business?
3) How To Start an Idol Making Business?
4) How to Start a Mobile Garage Service?

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FAQs

Q. What is the first step to starting a business in Tamil Nadu?

Ans. The first step is filing for a DIN number and getting your business trademarks registered under the RoC and the Ministry of Corporate Affairs.

Q. Is it profitable to start a business in Tamil Nadu?

Ans. Yes, Tamil Nadu is one of the most literate states in India. It is also home to several world-class educational institutions. It has a vast market size. It is a great place to start a business in India.

Q. What is the cost of applying for a GST IN registration?

Ans. The cost of registering your business for a GST IN number varies depending on the nature and scale of your business and the agency you have chosen to register it through. It is usually around 6500 to 10000 rupees, all inclusive.

Q. What if my company name has already been trademarked?

Ans. You can check whether your company name is available for trademark on the official page of the Ministry of Corporate Affairs. If it has already been trademarked, you can opt to enter into an agreement with the owner of the trademark in order to continue using it after the successful registration of your business.

Q. Is there any need for a PAN registration to start a business in Tamil Nadu?

Ans. Yes, registering yourself for a PAN card is essential for any business operation. Even your employees must submit their PAN card details to ensure income tax benefits and timely payment reimbursements.