o Natural inheritance system
Setting up of Business Entities – UNIT 1 2. Operational Aspects
I. Types of Business Organizations o Quick decision making
A. Sole Proprietorship o Strong cooperation
Definition & Core Concepts o Shared responsibilities
Business owned, managed and controlled by o Traditional business values
an individual C. Cooperative Societies
Owner bears all risks and receives all profits Essential Elements
Most common in personalized services (beauty Democratic management
parlors, retail shops) Voluntary membership
Key Features Service motive
Single ownership structure One member, one vote
Unlimited liability Limited liability
Direct control and management Regular member meetings
Simple formation process Operational Framework
Complete authority in decision making 1. Management
Personal discretion in profits o Democratic control
Advantages o Member participation
1. Formation & Control o Regular meetings
o Minimal legal requirements
o Transparent operations
o Simple structure
2. Benefits
o Low startup costs o Profit sharing
o Autonomous decision-making o Government support
o Flexible operations o Self-help and mutual aid
o Quick adaptability o Easy formation
2. Business Operation II. Modern Business Structures
o Complete privacy in operations A. Partnership
o Direct benefit from success Key Features
o Quick decision-making Shared ownership and management
o No interference from others Profit and loss sharing
o High confidentiality maintenance Mutual agency
Disadvantages Unlimited liability
1. Resource Limitations Registration optional
o Restricted capital availability B. Limited Liability Partnership (LLP)
o Limited borrowing capacity Core Elements
o Growth constraints Separate legal entity
o Limited managerial expertise Limited liability protection
2. Liability & Continuity Issues Flexible internal structure
o Personal asset risk Low compliance burden
o Complete financial responsibility Perpetual succession
o No perpetual succession C. Company Structure
o Business continuity issues Essential Components
B. Joint Hindu Family Business Separate legal entity
Core Structure Limited liability
Karta's role and responsibilities Perpetual succession
Rights of co-parceners Common seal
Governed by Hindu Law Artificial person status
Family-based membership III. Startup Ecosystem
Limited liability for members A. Definition & Characteristics
Unlimited liability for Karta Core Elements
Key Features Innovation focus
1. Management Structure Scalable model
o Karta (eldest member) manages Technology integration
o Hereditary management High growth potential
Market disruption capability
o Family-centric operation
B. Support Systems Success Patterns
Infrastructure Market understanding
Incubators Innovation implementation
Accelerators Efficient scaling
Coworking spaces Strong leadership
Mentorship networks Adaptive strategies
Industry connections VII. Regulatory Framework
C. Funding Options A. Compliance Requirements
Available Sources Essential Elements
Bootstrapping Business registration
Angel investment Tax compliance
Venture capital Labor laws
Crowdfunding Environmental regulations
Government grants Industry-specific rules
Bank loans B. Documentation
IV. Government Initiatives Required Papers
A. Startup India Policy Registration certificates
Key Components Licenses
Tax benefits Permits
Funding support Tax documents
Simplified compliance Legal agreements
Incubation support VIII. Future Outlook
Patent support A. Emerging Trends
Easy exit process Key Areas
B. MUDRA Bank Scheme Digital transformation
Categories Sustainable practices
Shishu (up to ₹50,000) Global integration
Kishore (₹50,001 - ₹5 lakh) Innovation focus
Tarun (₹5 - 10 lakh) Collaborative economics
V. Success Factors & Strategies B. Growth Opportunities
A. Critical Success Elements Potential Areas
Essential Factors New market segments
Innovation focus Technology integration
Customer-centricity International expansion
Strong team building Product diversification
Financial management Service enhancement
Market adaptability
Digital presence Business Entities Formation
Strategic partnerships 1. Not-for-Profit Organizations (NPOs)
B. Risk Management Basic Definition
Key Considerations Organizations operating without profit motive
Financial risks Focus on social, cultural, educational, or
Market risks charitable missions
Operational risks Assets/income used for organization's
Regulatory compliance objectives
Competition analysis Key Features
VI. Notable Success Stories 1. Mission-driven operations
A. Indian Startup Examples 2. Tax-exempt status
By Sector 3. Funding through donations/grants
E-commerce: Flipkart, Snapdeal 4. Board governance
Fintech: Paytm, Razorpay 5. No profit distribution
Edtech: BYJU'S 6. Transparency requirements
Food Tech: Zomato, Swiggy 7. Volunteer involvement
Transportation: Ola 8. Public accountability
Hospitality: OYO Rooms Governance Structure
B. Key Learnings Board of Directors/Trustees
Regular reporting requirements 4. Governing body
Financial accountability 5. Regular meetings
Professional management 6. Proper records
Member involvement Advantages
2. Section 8 Company 1. Social support
Definition 2. Resource sharing
Special category under Companies Act 2013 3. Cultural exchange
(India) 4. Collective strength
Promotes commerce, art, science, education, 5. Economic cooperation
charity Disadvantages
Not-for-profit structure 1. Bureaucratic challenges
Key Requirements 2. Potential conflicts
1. License from Central Government 3. Conformity pressure
2. No profit distribution 4. Management complexity
3. Minimum 3 directors 5. Tax Exemption for NGOs
4. Proper name designation Eligibility
5. Regular compliance 1. Charitable purpose
6. Annual reporting 2. Non-profit operation
Formation Process 3. Public benefit
1. License application 4. Proper registration
2. Documentation submission 5. Regular compliance
3. Registration Benefits
4. Board formation 1. Income tax exemption
5. Compliance setup 2. Donor tax benefits
6. Operational structure 3. Property tax benefits
3. Trust Formation 4. GST exemptions
Basic Components 5. Other concessions
1. Settlor (creator) Compliance Requirements
2. Trustees 1. Annual returns
3. Beneficiaries 2. Activity reports
4. Trust deed 3. Financial statements
5. Trust property 4. Audit requirements
Types 5. Record maintenance
1. Public Trust 6. Common Compliance Requirements
Public benefit Documentation
Broader oversight 1. Registration certificates
More regulations 2. Annual reports
Perpetual existence 3. Financial records
2. Private Trust 4. Meeting minutes
Specific beneficiaries 5. Member records
Limited scope Regular Activities
Less regulation 1. Board meetings
Defined duration 2. Annual meetings
Trust Deed Elements 3. Activity reporting
1. Title/Introduction 4. Financial audits
2. Objectives 5. Compliance updates
3. Trustee powers Financial Management
4. Distribution rules 1. Proper accounting
5. Amendment provisions 2. Transparent operations
6. Succession planning 3. Fund utilization
7. Dissolution terms 4. Asset management
4. Society 5. Regular audits
Formation Requirements 7. Operational Guidelines
1. Minimum members Management
2. Written constitution 1. Professional administration
3. Registration 2. Clear responsibilities
3. Regular oversight Exit strategies
4. Performance monitoring Incorporation Procedure
5. Strategic planning 1. Name reservation
Reporting 2. LLP agreement drafting
1. Annual reports 3. Digital signature requirements
2. Financial statements 4. Document preparation
3. Activity updates 5. Filing incorporation documents
4. Compliance certificates 6. Fee payment
5. Member communications 7. Certificate of Incorporation
Sustainability 8. PAN/TAN applications
1. Resource planning 9. Bank account opening
2. Fund management Annual Compliances
3. Succession planning 1. Annual return filing
4. Risk management 2. Statement of account and solvency
5. Growth strategy 3. Income tax returns
8. Essential Maintenance 4. Audit requirements (if applicable)
Regular Reviews 5. Books of accounts maintenance
1. Objective assessment 6. Filing of statutory documents
2. Performance evaluation 7. Compliance with local laws
3. Compliance check 8. GST compliance (if applicable)
4. Policy updates Business Collaboration
5. Strategy revision Definition
Documentation Updates Strategic partnership between entities
1. Registration renewals Objectives for collaboration
2. License updates Value creation aspects
3. Member records Resource sharing principles
4. Activity logs Decision-making frameworks
5. Financial records Types
Stakeholder Management 1. Strategic Alliances
1. Member communications 2. Joint Ventures
2. Public relations 3. Partnerships
3. Government liaison 4. Mergers and Acquisitions
4. Donor management 5. Licensing/Franchising
5. Community engagement 6. R&D Collaborations
7. Supply Chain Collaborations
UNIT 3 8. Technology Partnerships
Limited Liability Partnership (LLP) Joint Ventures
Key Features Types
Hybrid business structure combining Equity Joint Venture
partnership and corporation elements Contractual Joint Venture
Provides limited liability protection to partners Cooperative Joint Venture
Separate legal entity distinct from partners Minority/Majority Joint Venture
Minimum 2 designated partners required, no Limited Liability Joint Venture
maximum limit Advantages
Partner liability limited to capital contribution Shared resources/expertise
Flexible management structure Risk sharing
Pass-through taxation Market expansion
LLP Agreement Components Cost savings
Name and business purpose Technology access
Partner details and contributions Disadvantages
Profit/loss sharing mechanism Conflicts of interest
Management structure Complex decision-making
Term and termination conditions Shared profits
Dispute resolution procedures Dependency on partners
Confidentiality clauses Regulatory challenges
Amendment procedures Successful Joint Ventures in India
1. Maruti Suzuki India Limited Get required licenses and permits
2. Hero MotoCorp (formerly Hero Honda) Register with state authorities
3. Hindustan Unilever Limited Comply with industry regulations
4. Sony Pictures Networks India Maintain proper records
5. Tata Consultancy Services File annual reports
6. Vodafone Idea Limited Professional licenses requirements
7. Wipro GE Healthcare Insurance considerations
Special Purpose Vehicle (SPV) Online presence regulations
Characteristics GDPR/CCPA compliance if applicable
Created for specific, limited purpose Renewal tracking systems
Legal independence PAN (Permanent Account Number)
Risk isolation 10-character alphanumeric identification
Ring-fenced assets number (Format: ABCDE1234F)
Enhanced financing capability Mandatory for financial transactions in India
Tax efficiency Required for:
Benefits o Tax filing
1. Risk isolation o Bank accounts
2. Asset protection o High-value transactions
3. Project financing o Property deals
4. Tax optimization Must be linked with Aadhaar
5. Bankruptcy remoteness Valid for lifetime
6. Enhanced credit rating Foreign entities & NRI requirements
7. Operational independence Use in TDS/TCS
Formation Steps Role in international transactions
1. Define purpose PAN card as identity proof
2. Choose legal structure TAN (Tax Deduction Account Number)
3. Select jurisdiction Required for TDS/TCS transactions
4. Appoint directors Essential for:
5. Draft documents o Deducting taxes at source
6. Registration/filing o Filing TDS returns
7. Obtain approvals o Tax collection compliance
8. Capitalize Online/offline application through Form 49B
9. Set up bank accounts Valid until cancelled
10. Ensure compliance GST Registration
Cross-Border Considerations Comprehensive indirect tax system
International regulations Three main types:
Compliance requirements o CGST (Central)
Cultural aspects
o SGST (State)
Legal framework variations
o IGST (Interstate)
Jurisdictional challenges
Mandatory above turnover threshold
Additional Important Aspects
Input tax credit available
Documentation requirements
Regular returns filing required
Tax implications across structures
E-way bill for goods movement
Management and operational frameworks
GST Council composition and role
Legal and regulatory compliance
Composition scheme for small businesses
Risk management strategies
Reverse Charge Mechanism (RCM)
Exit mechanisms
GST rates: 5%, 12%, 18%, 28%
Performance monitoring
Anti-profiteering provisions
Reporting requirements
GSTN (IT infrastructure)
Shops & Establishments Registration
UNIT 4
State-specific regulation
Business Registration & Licenses
Required for commercial establishments
Choose business structure (sole proprietorship,
Covers:
LLC, corporation)
o Working hours
Register business name
o Employee welfare
Obtain EIN from IRS
o Business premises Digital signature requirements
Renewal needed periodically E-filing procedures
MSME Registration Documentation Requirements
Through Udyam portal Types of business documents needed
Free registration process Record maintenance periods
Based on: Digital documentation rules
o Investment in equipment Storage requirements
o Annual turnover Backup procedures
Benefits: General Compliance
o Government schemes Annual return filing
o Priority lending Regulatory updates
o Tax benefits Penalty provisions
Classification criteria Compliance officers
Aadhaar linkage requirement Audit requirements
District Industries Center role UNIT 5
Online verification process Environmental Legislations in India
FSSAI Registration/License Major Environmental Acts
Mandatory for food businesses 1. Environment (Protection) Act, 1986
Three types: Umbrella legislation for environmental
o Basic Registration protection
o State License Empowers government to take measures for
o Central License
improving environment quality
Establishes standards and regulations for
Based on turnover
environmental pollutants
Regular inspections
Sets framework for other environmental
Food safety compliance
regulations
Display requirements
2. Water (Prevention and Control of Pollution) Act,
Third-party audit requirements
1974
Food safety management plans
First major environmental law in India
NOC requirements
Establishes CPCB and SPCBs
License display rules
Regulates water pollution through consent
Intellectual Property Registration
system
Trademark
Sets water quality standards
Protects brand identifiers
Powers to take samples and analyze
Valid for 10 years
Water cess provisions and collection
Renewable
mechanisms
Prevents unauthorized use
3. Air (Prevention and Control of Pollution) Act,
Patent
1981
Protects inventions
Controls air pollution and maintains air quality
20-year validity
Establishes emission standards
Exclusive rights
Requires consent for industrial operations
Detailed disclosure required
Provides for penalties and enforcement
Design Registration
Monitoring network establishment
Protects product appearance
Vehicle pollution control measures
15-year validity
4. Forest (Conservation) Act, 1980
Visual aspects only
Regulates deforestation and forest land use
No functional features
Requires central government approval for
Environmental Clearance
forest land diversion
Pollution Control Board approval
Focuses on forest conservation
Industry-specific norms
Balances development with conservation
Environmental impact assessment
Other Important Acts
Regular compliance monitoring
5. Wildlife Protection Act, 1972
Periodic renewals
Protects wildlife and their habitats
Tax Related
Classifies species into schedules
Tax filing requirements
Regulates hunting and trade of wildlife
Compliance calendar
Establishes protected areas
Record keeping duration
6. Biological Diversity Act, 2002 Inter-agency coordination
Conservation of biological diversity Policy integration
Sustainable use of components Resource sharing
Establishes National Biodiversity Authority Regular assessments
Regulates access to biological resources Performance tracking
7. National Green Tribunal Act, 2010 Compliance verification
Establishes NGT for environmental cases Impact evaluation
Provides speedy environmental justice International Aspects
Handles environmental disputes 1. Geographical Indication Protection
Specialized environmental court Protects products with specific geographical
Regulatory Bodies and Functions origin
1. Central Pollution Control Board (CPCB) Registration and rights
Sets national standards Prevents unauthorized use
Coordinates pollution control activities International protection under Paris
Provides technical assistance Convention
Conducts research and monitoring 2. International Cooperation
Research and development initiatives Transboundary pollution management
Public awareness programs International agreements
2. State Pollution Control Boards (SPCBs) Cooperative frameworks
Implement pollution control laws at state level Global standards alignment
Grant consents to industries Cross-border issue resolution
Monitor compliance Procedural Requirements
Take enforcement action 1. Documentation and Reporting
Local level implementation Record keeping requirements
State-specific adaptations Reporting formats
Environmental Protection Mechanisms Consent applications
1. Environmental Impact Assessment (EIA) Compliance reports
Mandatory for new projects Regular monitoring reports
Assesses environmental impacts 2. Legal Procedures
Public consultation process Court procedures
Prior environmental clearance required Evidence requirements
Project monitoring Witness provisions
2. Hazardous Waste Management Appeal mechanisms
Hazardous Waste Rules, 2016 Enforcement protocols
Regulates handling and disposal Current Challenges and Future Needs
Controls transboundary movement 1. Challenges
Authorization requirements Enforcement issues
Storage and transportation protocols Monitoring difficulties
3. Public Liability Insurance Emerging environmental threats
Mandatory insurance for hazardous industries Climate change concerns
Compensation for accidents Resource constraints
Protection for victims 2. Future Requirements
Immediate relief provision Stronger enforcement
Industry responsibility Better coordination
Enforcement Framework Enhanced monitoring
1. Penalties and Enforcement Public participation
Imprisonment provisions Technological integration
Monetary fines Capacity building
Additional fines for continuing offenses Updated regulations
Regular inspections
Sample collection and analysis
Legal proceedings
Appeals process
2. Implementation Mechanisms
Coordination framework
Centre-state cooperation
