HOW TO START AN ONLINE BUSINESS IN INDIA?

E-commerce, with no apprehensions is the future of retail business. Many of the well-established businesses are adding an online segment to their retail sales and have experienced remarkable growth in sales with an average of 20% and reaching as high as 40% in a very small timeframe. It has become a universal tendency to look up online for brands and business and the ones which do not have a website, are considered obsolete by the consumers. It is expected, that in coming years most of the trading would be done online with no complications and physical monetary transactions. Meanwhile, a very famous online business in India namely, Flipkart launched its amazing 100 million dollars sale in a period of just 10 hours in which they offered huge discounts to their consumers. At the end of 24 hours, it fell a little short of its claims for the day and did business of a billion.

Many of its customers actually wanted to buy products during the sale but were left disappointed and irritated because the system was on the verge of crashing making it very slow when a huge population tried to gain access in this short duration. The company was taken by a surprise as they did not expect such a fiasco and also apologised for the same, still leaving some of its loyal customers disappointed.

Another step taken by Flipkart to pacify its discontented customers was that it started giving away products at prices that were lower than the cost price of the products which is against the laws of the industry, displeasing a lot of its competitors. It did another blunder to cover a small mistake. On the flip side, the entire scenario also highlights the immense potential of this business starting from the ease to attract and hold consumers to tap into such a large targeted audience due to the easy purchasing this platform offers to people by just clicking sitting at home. The article focuses on the online business start-ups in India.

 

HOW TO REGISTER YOUR ONLINE BUSINESS?

 

Once you have placed the idea and planned it strategically, you are all set to start. Registering the business and incorporating your company, should be the following step. Some obligations that exist in an offline retail business may not be applicable for an online one simply because of the differences in the way they are operated. An office that is registered is still required depending on the convenience of space for the entrepreneur. In order to open bank accounts, trade and conduct other business activities, registration is needed. For example, Flipkart was incorporated as a Private Limited Company and many others follow the same trend, if they wish to become big. For other small businesses start-ups, they can begin with a registration under a Limited Liability Partnership (LLP) by completing the Shops and Establishment formalities at the nearby municipal office.

 

HOW TO START AN ONLINE BUSINESS?

Some of the essentials to start an online business are listed below:

  • Identify the demand to fill in the void and target it.
  • Constantly try to attract traffic to your website by using search engines.
  • Make and design the website in a user-friendly manner to drive and retain consumers.
  • To fulfil consumer orders, build proper processes and mechanisms.
  • Make sure you establish a good reputation in the online market.
  • Try to follow up with your subscribers and consumer with personalised e-mails.
  • Income can be increased by back-end-sales as well as up selling.

 

WHAT ARE THE ADVANTAGES OF AN ONLINE BUSINESS?

 

To start with, when most of the retail shops open for around 8-10 hours in a day, online business runs round the clock. It is a huge advantage as everybody likes to make money throughout the day if possible.

Running a business online on an exclusive basis can also help cut down costs. You need not pay any rents like a physical retail store, the number of employees needed are less and can be hired on low-wages as and when required. All these factors make the business more profitable, productive and efficient.

Furthermore, the cost of inventory is quite low for online stores. An online store does not need to be stocked with products all the time unlike an offline retail store, that have to maintain stocks in order to satisfy the demands of the customers at all times. Online stores can keep their stocks and inventories low by using the drop-shipping method, in which the products are delivered to the customer directly from the manufacturer. All it requires is careful planning and strategy to manage the inventories.

An ultimate advantage of online business is that it is easily scalable in the sense that it can be expanded in a short duration from the setup. Up-scaling becomes quite complicated in a physical retail store as you need find a bigger location, more employees etc causing additional expenses.

 

SOME THINGS TO KEEP IN MIND..

  • Solid logistics should be in place
  • Deliveries and other execution details should be well-planned in order to keep the consumers satisfied and business running.
  • Marketing and advertising strategies should be figured out in order to create a brand and make it popular in the market.
  • Social networking can be used to attract and retain customers.
  • Constant creativity is necessary to differentiate your brand from other competitors in the market.
  • Efforts to be made to make the business independent and sustainable in the long-run.

Company Mantra Team

For more visit: WWW.COMPANYMANTRA.COM

CONDITIONS AND MANNER OF PROVIDING EXIT OPPORTUNITY TO DISSENTING SHAREHOLDERS

Applicability.

69A. (1) The provisions of this Chapter shall apply to an exit offer made by the promoters or shareholders in control of an issuer to the dissenting shareholders in terms of section 13(8) and section 27(2) of the Companies Act, 2013, in case of change in objects or variation in the terms of contract referred to in the prospectus.

(2) The provisions of this Chapter shall not apply where there are neither identifiable promoters nor shareholders in control of the listed issuer.

Definitions.

69B. For the purpose of this Chapter: (a) “dissenting shareholders” means those shareholders who have voted against the resolution for change in objects or variation in terms of a contract, referred to in the prospectus of the issuer;

(b) “frequently traded shares” shall have the same meaning as assigned to it in the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

(c) “relevant date” means date of the board meeting in which the proposal for change in objects or variation in terms of a contract, referred to in the prospectus is approved, before seeking shareholders’ approval.

Conditions for exit offer.

69C.The promoters or shareholders in control shall make the exit offer in accordance with the provisions of this Chapter, to the dissenting shareholders, if: (a) the public issue has opened after April 1, 2014

(b) The proposal for change in objects or variation in terms of a contract, referred to in the prospectus is dissented by at least ten per cent. of the shareholders who voted in the general meeting

(c) The amount to be utilized for the objects for which the prospectus was issued is less than seventy five per cent of the amount raised (including the amount earmarked for general corporate purposes as disclosed in the offer document)

Eligibility of shareholders for availing the exit offer

69D.Only those dissenting shareholders of the issuer who are holding shares as on the relevant date shall be eligible to avail the exit offer made under this Chapter.

Exit offer price.

69E.The ‘exit price’ payable to the dissenting shareholders shall be the highest of the following:

(a) The volume-weighted average price paid or payable for acquisitions, whether by the promoters or shareholders having control or by any person acting in concert with them, during the fifty-two weeks immediately preceding the relevant date

(b) The highest price paid or payable for any acquisition, whether by the promoters or shareholders having control or by any person acting in concert with them, during the twenty-six weeks immediately preceding the relevant date

(c) the volume-weighted average market price of such shares for a period of sixty trading days immediately preceding the relevant date as traded on the recognised stock exchange where the maximum volume of trading in the shares of the issuer are recorded during such period, provided such shares are frequently traded

 

(d) where the shares are not frequently traded, the price determined by the promoters or shareholders having control and the merchant banker taking into account valuation parameters including book value, comparable trading multiples, and such other parameters as are customary for valuation of shares of such issuers.

Manner of providing exit to dissenting shareholders 69F.

(1) The notice proposing the passing of special resolution for changing the objects of the issue and varying the terms of contract, referred to in the prospectus shall also contain information about the exit offer to the dissenting shareholders.

(2) In addition to the disclosures required under the provisions of section 102 of the Companies Act, 2013 read with rule 32 of the Companies (Incorporation) Rules, 2014 and rule 7 of the Companies (Prospectus and Allotment of Securities) Rules, 2014 and any other applicable law, a statement to the effect that the promoters or the shareholders having control shall provide an exit opportunity to the dissenting shareholders shall also be included in the explanatory statement to the notice for passing special resolution.

(3) After passing of the special resolution, the issuer shall submit the voting results to the recognised stock exchange(s), in terms of the provisions of regulation 44(3) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

(4) The issuer shall also submit the list of dissenting shareholders, as certified by its compliance officer, to the recognised stock exchange(s).

(5) The promoters or shareholders in control, shall appoint a merchant banker registered with the Board and finalize the exit offer price in accordance with these regulations.

(6) The issuer shall intimate the recognised stock exchange(s) about the exit offer to dissenting shareholders and the price at which such offer is being given.

(7) The recognised stock exchange(s) shall immediately on receipt of such intimation disseminate the same to public within one working day.

(8) To ensure security for performance of their obligations, the promoters or shareholders having control, as applicable, shall create an escrow account which may be interest bearing and deposit the aggregate consideration in the account at least two working days prior to opening of the tendering period.

(9) The tendering period shall start not later than seven working days from the passing of the special resolution and shall remain open for ten working days.

(10) The dissenting shareholders who have tendered their shares in acceptance of the exit offer shall have the option to withdraw such acceptance till the date of closure of the tendering period.

(11) The promoters or shareholders having control shall facilitate tendering of shares by the shareholders and settlement of the same through the recognised stock exchange mechanism as specified by SEBI for the purpose of takeover, buy-back and delisting.

 

Company Mantra Team

For More Visit: WWW.COMPANYMANTRA.COM

LOAN TO DIRECTORS AND SUBSIDIARIES

In accordance with section 185 of the Companies Act 2013, a company cannot, directly or indirectly, give any loan, including loan represented by a book debt, to any of its directors or to any other person in whom the director is interested or give any guarantee or provide any security in connection with any loan taken by him or such other person.

The Companies Act 2013 explains the expression to “any other person in whom director is interested” to include:-

  • Any director of leading company, or of a company which is its holding company; or
  • Any relative of the director; or
  • Any partner of such director; or
  • Any firm in which any such director or relative is partner; or
  • Any private company in which any such director is a director or member; or
  • Any body corporate at a general meeting of which not less than 25% of total voting power may be exercised or controlled by any such director, or two or more such directors, together, or
  • Any body corporate, the board of directors, Managing Director or managers, whereof is accustomed to act in accordance with the director or instructions of the board of directors or any director of the leading company.

 

Apparently, this explanation may cover subsidiary companies. Hence, one interpretation was that a holding company cannot give any loan/ guarantee/ security on behalf of its subsidiary. This view, along with the fact that section 185 is applicable from 12 September 2013, has created significant hardship for many companies.

 

 EXCEPTIONS:-

  • A company may advance loan to MANAGING DIRECTOR or WHOLE TIME DIRECTOR:

–     As part of condition of services extended by the company to all its employees; or

–    Pursuant to any scheme approved by the members by a special resolution;

 

  • These exemptions are subject to a condition that loans should be utilized by the subsidiaries  company for its principle business activities:-
  • Any loan made by a holding company to its wholly owned subsidiary company or any guarantee given or security provided by a holding company in respect of any loan made to its wholly owned subsidiary company is exempted from the requirements under 185.
  • Any guarantee given or security provided by a holding company in respect of loan made by any bank or financial institution to its subsidiary company (includes subsidiaries that are not wholly owned) is exempted from the requirements under this section.

 

Company Mantra Team

For More Visit : www.companymantra.com

HOW TO START A RESTAURANT IN INDIA?

HOW TO START A RESTAURANT IN INDIA?

The industry of food and beverages is amongst the fastest expanding industries in the country fuelled by urbanisation and the ever growing middle class. The food service sector is presently valued by the Indian Restaurant Congress (held in 2013), at around 75,000 crores and is expected to reach around 137,000 crores by the year 2015. With the growth in population, especially youngsters, increase in purchasing power of consumers, growth of tier II and tier III cities, there is an increasing demand for outside food making the restaurant industry grow continuously. The article focuses on the rules and regulations required to start a restaurant in India.

WHICH BUSINESS ENTITY MODEL TO GO FOR?

One of the basic decisions (legal/financial) to be made by the entrepreneur before starting a restaurant is to make a choice regarding the business entity i.e. a Proprietorship, Partnership, Limited Liability Partnership, Private Limited Company or One Person Company. Each one them has its own unique benefits and can be chosen depending on the scale of business, number of investors/partners and plans for the future. Proprietorship and Partnership firms are not generally chosen by people as they do not provide limited liability, continual existence or division of business or assets which are covered well under the Limited Liability Partnership or One Person Company. Therefore, it is suggested that entrepreneurs who wish to start a restaurant, choose the latter since it proves to be more sorted and profitable.

In situations where two or more individuals wish to start a restaurant together, a Limited Liability Partnership or Private Limited Company works the best. If the restaurant is owned and run by an individual, a One Person Company is a good option. The individual can also partner with a family member (i.e. spouse, sibling, parents or any other relative) and can choose a LLP or a Private Limited Company business entity.

The key indicator of a successful restaurant is the annual sales turnover in the initial few years of the start-up. If the gross annual sale of the restaurant in the first few years is estimated to be greater than Rs. 40 lakhs then it is recommended that the business should be registered as a Private Limited or a One Person Company. In case, the gross annual sale is expected not to be more than Rs. 40 lakhs and the capital contribution less than Rs.25 lakhs, it is suggested that the business be registered as a LLP since, audit of accounts would not be required in this situation.

In addition to the number of partners/investors and size of the business, future plans also play a major role in deciding the type of business entity to use for the restaurant business. In case, the entrepreneur has plans for raising a bank loan or private equity, a Private Limited Company is always recommended, as Private Limited Company’s ownership is decided by shareholding and the shares of a private limited company can be diluted to raise capital for the business. Also, in case the entrepreneur has plans to establish a chain of restaurants or create a franchising model, a Private Limited Company is recommended.

WHICH LICENSES ARE REQUIRED TO START A RESTAURANT?

A FOOD LICENSE:

The Food and Safety Standards Act of 2006 makes it mandatory to get a Food Business Operator license for anybody who is associated in the production, processing, distribution, sale or import of any edible product within the country. Therefore, it is necessary to obtain this license from the Food and Safety Standards Authority of India. It comes under the purview of the state level authority of licensing and can be obtained easily before starting any restaurant related operations. It is valid for a year and can be renewed thereafter.

AN ESTABLISHMENT LICENSE:

The Department of Labour regulates the Shop and Establishment Act and its premises under which any profession, business or trade is operated. The act manages areas such as working hours, intervals for employees to rest and overtime work, operating hours, shut down days depending on national or other holidays, child labour rules and general or maternity or sickness etc. leaves. The license can be obtained through the State Chief Inspector of Department of Labour.

SERVICE TAX REGISTRATION:

The budget of 2012 made it mandatory for all air-conditioned restaurants that serve liquor to be charged with service tax. The following budget expanded the applicability of the same to every single restaurant regardless of the liquor factor. A restaurant is required to get a service tax registration if its annual sale is greater than Rs.10 lakhs.

VAT REGISTRATION:

The tax is levied by State Governments on the sale of any product including food that is sold in restaurants. Hence, it is mandatory for every restaurant to obtain a VAT registration from the respective State Authority which may vary from state to state.

TRADEMARK REGISTRATION:

If an entrepreneur wishes to start a restaurant or chain or wants to invest a significant quantity of money and time into branding, it is suggested that they obtain a trademark registration. The registration provides intellectual property ownership rights to the entrepreneur and helps avert the use of brand by other competitors in the market.

HOW TO GET YOUR RESTAURANT FINANCED?

Many times entrepreneurs need a bank loan to start a restaurant and banks indeed offer loans for the same. Getting a bank loan sanctioned depends on various factors such as the intended business model, promoter’s experience and the offered collateral security. A lot of schemes offer loans with zero collateral like the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) Scheme within which it is necessary to have a strong business model and experience, if there is no collateral. It is recommended to approach a nearby bank in order to establish a relationship with the bankers and discuss the business plan further.

COMPANY MANTRA TEAM

FOR MORE VISIT : WWW.COMPANYMANTRA.COM

 

HOW TO START A PHOTOGRAPHY BUSINESS IN INDIA?

 

Indian youth’s indulgence and interest in photography has been catalysed by social media and modern photography techniques. One can see a lot of youngsters wanting to pursue their love for photography either as a hobby or sometimes, as a successful business. The advantages and ease of doing business with small capital, high market demand, travel opportunities etc., makes photography  an attractive business for a lot of people. This article focuses on the process of a photography start-up.

WHAT IS THE BUSINESS PROFILE OF PHOTOGRAPHY IN INDIA?

The photography business in the country is valued over Rs. 1 lakh crores and is continuously growing at the rate of 25-30% per annum. The use of modern technology has dramatically changed the entire industry, making the industry of film based photography totally obsolete. Modernisation has not only created opportunities for new companies to create a market for themselves but has also pushed  major players in the photography business like Kodak and Konika to realise their need to constantly upgrade and  improve in order to stay in the market. The competition in turn has benefited entrepreneurs making photography business start-ups ideal as they become less capital or training intensive.

HOW MUCH CAPITAL DO YOU NEED?

A person can start a photography business with a capital as small as Rs. 1 lakh to as high as Rs. 10 lakh, depending on its scale. Capital is mainly required for the equipment i.e. camera and lenses. The camera body may range from Rs. 50,000 to Rs. 3,00,000 and the cost of lens  depends on the type of shots required by the person which starts  from Rs. 20,000 and could go up to lakhs of rupees. Apart from all this, other investments include a place to establish a studio ( if needed ), lighting and other miscellaneous equipment, and advertising ( market or social ). Since, a decent photography start-up can be established within a capital of Rs. 10 lakhs, a lot of banks offer schemes such as the MUDRA Loan Scheme which can be availed by photographers/entrepreneurs even without any track records to start a photography business.

HOW TO REGISTER YOUR BUSINESS?

Most of the photography businesses have a turn over that lies under Rs. 40 lakhs which makes a Limited Liability Partnership (LLP), an ideal business entity to start a photography business. The entity makes compliance of business easy for the entrepreneur as it does not require any audit of accounts if the annual sales turnover is lower than Rs. 40 lakhs.

To form a LLP, at least two persons are needed. A person has to add a member of his/her family or friend with a minimal share of the profits, in case the business has a single entrepreneur.

Apart from the LLP registration, the entrepreneur is required to obtain a service tax registration for the photography business if and when the sales turnover crosses Rs. 9 lakh in a financial year. Once, the turnover crosses Rs. 10 lakhs, the entrepreneur has to start charging service tax from the clients at the rate of 14 % of the billed amount.

HOW CAN YOU BECOME SUCCESSFUL IN PHOTOGRAPHY?

New ideas, creativity and innovations in social media have paved the way for many young Indians to establish successful photography businesses in the country. One is well acquainted with the power that social media confers to an individual and in case of photographers; their pictures have to be displayed and shared in order to have a strong presence and marketing of their business and skills. Added to this, a person needs to create a decent website where people  can see  his/her work and  if the website is listed under prominent photography or other event service provider websites, it would make sure that the photography business runs successfully.

Here are some names of Indian Photographers who have established successful businesses and made it large in the fields of photography:

  • Radhika Raj
  • Madhur Shroff
  • Dinesh Kumble
  • Tarun Khiwal
  • Joseph Radhik

 

BUSINESS START-UP IDEAS FOR WOMEN

BUSINESS START-UP IDEAS FOR WOMEN

 

More and more women are getting into entrepreneurship in India with the continuous rise in urbanisation and women empowerment. The government in the country has also been very supportive in promoting women entrepreneurs by launching various schemes which include special access to finance through banks and better subsidies. The article focuses on some of the business ideas that are popular amongst women as entrepreneurs.

A CLOTHING BOUTIQUE

It is quite easy for women to start an apparel boutique as a physical retail store or can sell using an online retail store through social media or even through already established online market portals such as Craftsvilla. The boutiques seem to have never ending order demands ranging from customised/designed apparels to make to fit clothes. All it takes to run any boutique successfully as an entrepreneur is job expertise and the capability to manage orders even in situations of  shortage of manpower. Boutiques can be setup with minimal financial resources and then extended to a proper store. It proves to be one of the evergreen businesses as the need and demand for trendy and designer clothing is never going to vanish.

BEAUTY PARLOUR

A beauty parlour or a unisex salon can be started by bootstrapping or on a low scale to setup a small business. Skill training, understanding the quality measure and handling the equipment may consume some of the investment. A lot of housewives start parlours from their homes and they have been doing quite well with just basic services like simple rejuvenation services.

SOCIAL MEDIA MARKETING AND WEB DEVELOPMENT

Social media marketing and web development does not need any office to be set up. A person with decent experience, skills, and the ability to woo clients can setup a successful social media marketing agency or a web portal. This business can also be run as a part-time business if not a full-time one which makes it ideal for any woman to start, provided she has the required skills and experience.

CONTENT WRITING

The demand for content writers has been on the rise of late and with the increase in blogs and search engine marketing, content writing jobs have been expanding drastically as content being the basic ingredient for any e-commerce business. For people who wish to start a content writing business of their own, it is recommended to start with a blog in order make their writing identifiable to the potential consumers or employers in the market.

A CRECHE OR A DAYCARE CENTRE

The pre-school and daycare centres have proved to be successful for women as they can run it from their houses. Some factors can play a major role in making the home-based business idea successful such as love and affection for kids, an eye for details and a house or space that is child proof or rather child-friendly etc.

CATERING BUSINESS

As youngsters move from one city to the other for education or employment, demand for home made food amongst the youth is always on the rise, as restaurant food is not preferred every day. It proves to be ideal for women who love to cook, as they can start this business directly from their houses. Furthermore, with the increase and popularity of food technology platforms such as Hola Chef and others, it makes the entire catering business lucrative and remunerative for women entrepreneurs without any inconvenience.

PET STORE

A lot of people have been opting for pets making a pet store in a residential area very remunerative. The business location can depend on the locality a person lives in wherein the products can be sourced and supplied or made available for people who own pets. In posh localities, people usually opt for high end pets making a pet store in such an area extremely profitable.

YOGA STUDIO

The trend of leading a healthy lifestyle has paved the way for many people taking interest in yoga over other conventional ways of fitness, making a yoga studio profitable. It can be started successfully with a very little capital and good knowledge of yoga practices.

FINE ARTS TEACHING

A centre for fine arts can be easily started from home. Wide ranging forms of art can be taught under one roof such as dance classes, sketching, painting, sculpting etc. In order to make the business more valuable and profitable, a registration for the business and the recognition certificates for the students can be obtained.

HOME TUTOR

Home and online tutoring can be done by entrepreneurs who have hands on knowledge about different subjects that the target students may be interested in. In order to add more weightage to the business, it can be registered and quality teaching can be offered.

SUPPORT TO WOMEN ENTREPRENEURS

The country has a number of loan schemes as well as subsidies for women who wish to become entrepreneurs and start a business of their own.