Planning To Start A HR Consulting As A Sole Proprietor

Hi All,

I am planning to start HR consulting from home as a sole proprietor. Kindly suggest what procedure I have to follow to start the consulting. Do I have to get registered as a sole proprietor? I stay in Bangalore, so it would be great if you could advise me according to the rules of the state government.

Thanks in advance,
Garima

Dear Garima,

Congratulations on your decision to start your own venture.

There are various legal and regulatory frameworks to start a firm, company, or venture in all states. Among them, I would suggest you gather information about the Society Act. The Society Act is a good option for small as well as new startups.

Very few formalities are required, such as an office agreement, PAN Card of the initiator, address proof, etc. However, you need 7 different people on various designations like president, finance secretary, manager, and other members for Society Act registration. You can appoint yourself as the president and, as per the bylaws, open your firm's current account for financial operations.

Once you are comfortable and feel the need for upgrades in the firm's structure, you can consider the Companies Act. Upon enrollment in the Companies Act, your business will function as a company. There should be at least 2 directors, and you can title your company as ABC Pvt. Ltd.

In the Society Act, you can hold the position of a director in official documents. However, for bank accounts, cheques, and society documents, you will use your president's stamp and signature.

Best Wishes.

Manish Srivastava

+91-96707-66888

Three things are absolutely necessary:

1. Register your company name under the Shops and Establishment Act.
2. Obtain a PAN card for the company.
3. Obtain a service tax number.

I am not certain about the rest of the requirements for a proprietorship firm.

Regards,

Hi all,

My husband and I are planning to set up our own consultancy firm as partners. I am interested to know what should be the first step in setting it up. There are many posts on this; however, I would request some senior member to guide us on this. We are planning to start from home, and our current location is Noida. Also, I have heard that it is great to take a franchise of an already established firm as one can learn the business better.

Regards,
Saima

Hi Garima,

It's nice to see that you want to start your own company, but I would suggest that instead of a Sole Proprietor firm, you consider a partnership firm, particularly an LLP (Limited Liability Partnership). Setting up an LLP is easy and only requires a minimum of two members, who can be anyone, such as family, friends, or any social circles. There are good tax benefits as well. I recommend Googling about LLP and contacting a firm that can assist you in setting up the LLP company. They will collect the required documents from you, and everything else will be taken care of by them.

In a Sole Proprietorship, if an unfortunate event occurs and the firm faces a loss, the owner's personal assets are also involved. However, in an LLP, even in such an event, only the properties and assets in the company's name are held responsible, and not a single rupee of the owners is touched. This is one of the major benefits of an LLP.

Here are some additional points to consider when starting your firm:

1. When naming your business, ensure it is unique. Once you have a name and a domain name (e.g., abc.com), consider getting a trademark in that name, which will give you a unique advantage.

2. Make sure you have all the required documents and processes properly filed (such as service tax, PF, ESI for employees, etc.).

3. Adhere to local government laws to avoid unwanted penalties and legal issues later on.

4. Once your company has a good process and infrastructure, consider obtaining an ISO or similar certification to boost your credibility.

5. Once you have enough business and reputation, consider joining esteemed societies and communities like NASSCOM and ERA (for recruitment) to get noticed by companies and build your brand.

I hope these suggestions will help you. Also, check with other seniors for their recommendations, but I strongly advise you to consider an LLP over a Sole Proprietor firm.

Thanks

Hi Saima, kindly see my post above; it would answer your questions. You have to check with your local government policies if starting from home works because in certain areas, starting a company other than a commercial place is against rules and will be penalized, and the license will be canceled. Kindly check on that.

Taking a franchise is good, but you have to consider the credibility of the firm you are planning to take. However, in the longer run, you will not have any originality, but you will be one among the franchisees of that parent company. I would suggest you start on your own and build your brand.

Hope this helps.

Thanks, that was surely helpful. It's good to have our own company and brand instead of taking a franchise. However, I was thinking of starting from home initially and then moving on once we learn the business more and get noticed. I will surely check on this.