How to set up a business in Kerala from US or UK or Gulf?

Are you an NRI or NRK who wants to set up a business in Kerala. Then you have come to the right place. 

Setting up a business in Kerala involves the following steps.

1. Choosing the Type of Business

2. Registration of Business

3. State Level Compliances

4. Startup India Registration

5. Kerala Startup Mission Registration

Choosing the Type of Business

The first step in setting up a business in Kerala is to identify the type of business you need to set up.

Business can be registered as private limited company or partnership firm or a limited liability partnership.

Private Limited Company

Private Limited Company is a popular option to start a business in India by startups and businesses with higher growth aspirations. Private Limited Company is incorporated under the Companies Act of 2013, and governed by the Ministry of Corporate Affairs (MCA). It is a registered corporate structure, that provides business a separate legal identity from its owners.

Feature of the private limited company are the following.

• The liability of members is limited up to share capital they contribute.

• Ability to raise equity funds

• Separate legal entity status

• Perpetual Existence: A company, being a separate legal person, is unaffected by the death or cessation of any member and continues to be in existence irrespective of the changes in membership. A company has perpetual existence until it is legally dissolved. 

For more information on Private Limited Companies, please check this link.

Partnership Firm

A partnership firm is a form of business in which business is owned, managed and controlled by a group of people, known as partners. They set up their firm and provide services and products through it. However, a partnership firm is not considered to be a separate legal entity. Partners share all the profit and losses amongst each other. There is an unlimited liability given to all the partners.

Limited Liability Partnership

Limited liability partnership is a combination of both partnership and private limited company. It has the feature of both these forms. Partners have limited liability in the company. So the personal assets of the partners are not used for pay off the debts of the company.

It is a separate legal entity distinct from its owners. It can enter into a contract and acquire property in its name.

Registration of Business

As Private Limited Company is one of the most popular options to start a business, we will discuss the process of setting up of a private limited company in Kerala.

Following documents are required for registration of Private Limited Company in India.

• Identity Proof:  Any of Aadhar Card/Driving License/Election Id Card/Passport

• Address Proof of Business: Utility Bill (not older than 2 months) , Rent Agreement and NOC

• Pan Card

• Passport size photograph

• DIR-2 along with identity and address proofs of directors

• Declaration from directors

• Identity proof and address proof and PAN of proposed directors not having DIN

Checklist

Most steps are sequential and depend on an earlier step being completed. The full process will take at least 10 days to complete. Following are the steps involved in application for DSC.

1. Apply for Digital Signature Certificate (DSC) 

• Apply for DSC from any of the DSC Certifying Authority.

• DSCs are required for filling of e-forms on the online portal of Ministry of Corporate Affairs (MCA).DSC is a digital proof of authorization for online transactions and filing certain documents. 

• You must obtain either class 2 or class 3 category of DSC. Under Class 2 category, the identity of a person is verified against a pre-verified database whereas, under class 3 category, the person needs to present himself before registering authority to prove their identity

2. Check for Company’s Name availability

• Check whether your company name exist or not. Link

• For company name reservation, DSC and DIN are not required. Only the Ministry of Corporate Affairs (MCA) account is required. So you can reserve name of company in this step or as part of filing SPICe form.

• If you want to reserve it now, follow the below steps. 

• Visit Ministry of Corporate Affairs website. Click on "MCA Services". Then Click on "RUN (Reserve Unique Name)" for reserving company name.

3. File SPICe form along with e-MoA and e-AoA

SPICe is Simplified Performa for Incorporating Company electronically.It is a single form for company registration. SPICe (Form INC-32) is a single form for

• Allotment of Director Identification Number (DIN)

• Reservation of name

• Incorporation of company

It is accompanied by the documents envisaging the details of

• Directors & Subscribers

• e-MoA (Form INC 33). e-MoA refers to electronic Memorandum of Association

• e-AoA (Form INC 34). eAoA refers to electronic Articles of Association

Once SPICe form is approved, you will get incorporation certificate which will include the date of incorporation and PAN number of the company. TAN shall be send separately to address of company separately.

Submit SPICe form

• Visit Ministry of Corporate Affairs portal

• Login with password and upload SPICe form along with e-MoA and e-AoA. 

4. Obtain Incorporation document, PAN and TAN

Once the application submitted along with the SPICe forms are reviewed and verified and if the Registrar finds it satisfactory, the Certificate of Incorporation is issued with the date of incorporation along with the Permanent Account Number (PAN) of the company which will be attested by the seal and signature in electronic form.

State Level Compliances

Depending on the type of business, you might need to obtain various approvals during the pre-commissioning and post-commissioning stage of business. Here, we are listing down all the types of approvals required for starting a business in Kerala. You might not need to get all of the approvals. Depending on the type of business, you might need to get a few of the below approvals. 

Startup India Registration

In order to get recognized as a Startup by the Government of India, you need to register on the Startup India website.

Startup India, initiated by the Government of India is a flagship initiative launched in January 2016. This initiative is taken by the government of India to boost the startup ecosystem for supporting innovation and startups in India.

Following are the benefits of Startup India Initiatives

• Three years of tax benefits will be available to Startups. 

• Startups will be permitted to self-certify compliance with nine labour laws and environmental laws. In the case of labour laws, no inspection will be conducted for a period of three years.

• Startup India enables companies to register through their mobile application and upload relevant documents. There will also be single window clearances for approvals, registrations and filing compliances among other things.

• Patent filing approach will be simplified. The Startup will enjoy a rebate of 80% of the fee in the patent application. The startup will bear only the statutory fees and the government will bear all facilitator fees.

• The Startup India programme will encourage research and innovation among students who are aspiring entrepreneurs and seven new research parks will be set up to provide facilities for startups in the R&D sector.

• Equal opportunities will be provided for both startups and experienced entrepreneurs. Earlier this was not possible because all applicants required either ‘prior experience’ or a ‘prior turnover’. But now, public appropriation norms have been relaxed for startups.

Follow the below steps to register in the Startup India portal.

• Visit Startup India portal

• Click on Register

• Enter your name, email id, mobile number and password to register in the site.

Kerala Startup Mission Registration

The Government of Kerala launched the Kerala Startup Mission for entrepreneurship development and incubation activities in Kerala. The government of Kerala initiated the startup movement through Kerala Startup Mission by forging and implementing forward-looking policies for creating a vibrant startup ecosystem in the state primarily to foster the growth of innovation lead technology entrepreneurship.

Follow the below steps to register in KSUM.

• Visit KSUM website

• Click on Apply now option. 

• After that click on the apply link which applies to you. You need to be a registered user to access facilities of Kerala Startup Mission. If you want to register your startup, click on "Register" for Startups

• Select your startup type and click on Register option.

• The start-up registration page will be displayed. Provide details of First name, last name, email ID and mobile number.

• Once registered, the applicant will then get access to all the major events in Kerala ecosystem and also get access to apply for various schemes for startups like incubation, seed fund, startup box, patent reimbursement etc. as shown on left side of the screen under the Application tab.