During the year and a half of TechJini’s existence, we have learnt several things about starting and running a company in Bangalore. I am putting together our experiences in this post so that it can be helpful to others.
Register the company
The World Bank has a very detailed and comprehensive list of things to be done when you want to start your company. It covers most of the statutory requirements of starting a company in Bangalore. Many of these services are available online, so it makes life simpler. For those that are not available online, it is advisable to go through a Chartered Accountant.
It is advisable to get your company registered before you commence operations. Else it can create problems when you receive payments and don’t yet have a bank account in the company’s name.
Open a bank account
We chose citibank as our company bankers after we spoke to several banks. They offered better personalized service, were easily accessible and had the necessary features we were looking for. Since current account have no interest, choose a bank that offers easy ways to park/withdraw your surplus funds into/from short term funds which are mostly risk free and earn a good interest rate of 6% p.a.
Accounting and statutory compliance
Since Tally is the most commonly used accounting software, I would recommend to buy a license and start using it from the beginning. This avoids any accounting nightmares when you try to create your balance sheets at the eleventh hour. If you are not from an accounting background, it is best to hire a part-time accountant who can visit your premises and update your accounts every week or every fortnight. You can find such a person by locating any Tally coaching institute in your locality. They charge anywhere between Rs 1500 to Rs 3000 based on the amount of work.
There are several statutory and back office requirements like payroll, filing PT returns, advance tax, TDS returns, ROC returns, VAT/CST returns etc that require knowledge, time and effort. I did this myself the first year, but found that it is better to hire a professional for these while I can focus on our core business. Thus we met few CAs and finally contracted one of them. For a monthly fee, they handle all things including accounting, payroll, TDS, ROC, IT , PT etc (except the audit). They charge upwards of Rs 10,000 per month based on the number of employees.
Liability of employee behaviour
Another aspect to remember is that the company should formulate and get every employee (including the founders) tosign a Term of Employment or Company Policy documents. These documents outline several things including (but not limited to)
- employee’s acceptable behavior
- state that if the employee indulges in any unlawfully activity, the company shall not be liable
- the employee shall not use any IP from this company or anywhere else unless authorized
This becomes even more critical for IT startups since cyber laws are still evolving and these documents go a long way in proving that the employer takes preventive measures to protect the law. You can contact any lawyer who specializes in Cyber Law and he can assist you with the drafting of a policy.
Premises and utilities
We chose an office that was close to both the founders’ residences. This greatly improves productivity since we do not waste time and energy commuting to the workplace. Since we are a startup, we chose an office that offered us the best value for the money. Also ensure that there are few eateries in vicinity. Make sure you verify other things like, water availability, parking space, capacity of electricity connection etc.
If you are an IT startup, get at least 2 internet connections. We have BSNL and Tata Indicom. We have had bad experience with both of them, but Airtel (which is the best in terms of uptime) is not available in our locality.
I am sharing the contacts/resources that may save you time. Feel free to let them know you heard about them from us.
- Dilip Kumar (9341218974) – Apart from CA functions, provides accounting, payroll, statutory compliance services
- Krishnananda Nayak (26578391) – Also provides all CA and other services.
- L. Krishna Moorthy (26789535) – CA and tax consulting. We get our personal returns filed from him.
- Ashim Dey Bhowmick – Provides all functions of CA and also back office services
Please share any thing we missed via the comments.