The first thing to decide is the form of the entity:

• Proprietorship: Single owner.
• Partnership: Minimum of two or more people.
• Private Limited Company: Requires a minimum of two shareholders or directors, with an investment of at least ₹1 lakh. It has a separate PAN and GST number and is a separate legal entity.
• One Person Company (OPC): A company with one member. It is also a separate legal entity. The maximum investment (capital) is limited to ₹50 lakh, and the turnover limit is ₹2 crore.

GST is applicable to the supply of taxable goods. The threshold limit for GST applicability is:

• ₹20 lakh per annum for providing services or a composite supply of goods.
• ₹40 lakh for the supply of goods.

The requirements are:

• Minimum of two members and directors
• Registered office address.
• Name of the proposed entity.
• KYC documents of members, and rent agreement/tax-paid receipts, or utility bills of the premises.

An LLP is an alternative corporate business structure that combines the benefits of limited liability with the flexibility of a partnership.

• Minimum of two partners.
• Body corporates can be partners.
• Minimum capital of ₹1 lakh.
• At least one Indian resident must be a designated partner.

An OPC is a business structure in India that allows a single person to form a company while enjoying the benefits of sole proprietorship. The concept was introduced by the Companies Act of 2013. Its objective is to provide MSMEs with a corporate platform and limited liability.

Key details:

• Only natural persons and Indian citizens can create an OPC.
• The promoter must be a resident of India.
• Minimum authorized capital: ₹1 lakh.
• The promoter must appoint a nominee during incorporation.
• OPCs cannot engage in banking, insurance, or investment businesses.
• OPCs must convert to Private Limited Companies if their paid-up capital exceeds ₹50 lakh or their average sales exceed ₹2 crore.

Advantages:

• Legal status and corporate structure.
• Reduced compliance compared to Private Limited Companies.
• Efficient management.
• Perpetual succession.

Startups can self-certify compliance with six labour and three environmental laws through a simple online procedure. Other benefits include:

• No inspections for five years unless a credible complaint is filed.
• Eligible startups can be exempted from paying income tax for three consecutive financial years under section 80IAC, within their first ten years of incorporation.
• Faster IPR registration with subsidies for patents, trademarks, and design filings.
• Simplified participation in government tenders.
• Seed funding of up to ₹10 lakh.

• Only Private Limited Companies or LLPs can apply.
• The entity must have been incorporated no more than ten years ago.
• The business must focus on innovation, developing new products, services, or processes with significant technological input, or commercializing improvements to existing products or services.

If your taxable income exceeds the basic exemption limit, you are required to file an income tax return. Even if your income is below the exemption limit, tax laws mandate ITR filing in certain situations, such as:

• Holding foreign assets or foreign income.
• Holding or being a signatory to a foreign bank account.
• Spending ₹2 lakh or more on foreign travel.
• Paying electricity bills of ₹1 lakh or more annually. Claiming exemptions on capital gains.
• Claiming exemptions on capital gains.
• Having professional receipts of more than ₹10 lakh.
• Business gross receipts exceeding ₹60 lakh.
• Depositing ₹50 lakh or more into savings accounts.
• Depositing ₹1 crore or more into any bank account.
• If you are claiming a tax refund.

For partnerships, LLPs, and companies, filing a return of income is mandatory every year, regardless of the exemption limit.

Yes, under Section 269SS, you cannot receive a cash loan or deposit of ₹20,000 or more from a single person in a day. Under Section 269T, repaying a loan or deposit in cash exceeding ₹20,000 is prohibited. Section 269ST prohibits receiving cash payments of ₹2 lakh or more in certain transactions, with penalties equivalent to the transaction amount.

The Startup India initiative is a Government of India program to support startups by providing benefits such as:

• Rebates on patent registration costs.
• Faster registration with single-window clearances and approvals.
• Income tax exemption for three years.
• Exemptions from prior experience and turnover criteria in public procurement for startup manufacturers.
• Financial support and easier compliance with labour and environmental laws.
• No labour department inspections for three years.
• A quicker closure process for startups.