I would like to start a digital marketing company. I receive payments from outside India. Can you tell me how I should go about it? Do I need to register a firm?
First of all, you can still work as a freelancer without registering a company as such. However, to save taxes, you can register a company. Well, registration is not necessary. You can also make a partnership deed and save a lot of your taxes. You can refer to this article of mine where I have mentioned how small businessmen can save money in taxes. Let me now tell you the things you need to do to get started with your digital marketing business.
1. Make a partnership deed
Make your parents the co-owner of the company, and get a partnership deed done. Your CA or any local advocate will be able to help you. This deed will contain the percentage of share, how the loss will be distributed, how much salary would each one would be withdrawing at the end of every month and every other detail.
2. Income tax registration
Once you are done with the partnership deed, you will need to register your company with Income tax department.
3. Trade License Registration
Yoo would now need a trade license. While registering for a trade license, you will need to be cautious. You will be required the right kind of services while filling up the trade license form. If you have plans to grow, choose the services you may get it into in future. If you do not choose, it won’t be legal to provide a different service with this trade license. Please note the cost may go high if you decide multiple services, but that should be okay. Another thing to note that you will require a trade license from the state you would be operating from.
4. Company PAN Registration
Next step would be company PAN registration. You will have to apply for a company PAN.
5. Service Tax Registration
You will then be required to do your service tax registration. You will need to pay service tax only when your income crosses 10 lakh INR a year. Once GST is implemented, the minimum amount for which you need not charge any service tax would increase to 20 lakh INR a year. You can follow this article to know if you should charge your client any service tax or not.
6. Opening a Current account
To open a current account, you will be asked to show your partnership deed, Service tax registration document, company PAN and other details mentioned above. Once you get those ready, you can open a current account with any bank.
7. Firm Registration
If needed, you can still go with firm registration. You can consult a CA for this. But this is completely optional and up to you.