The procedure for establishing a business firm includes the following steps :
- Selection of the name
- Approval to the name
- Selection of ownership organisation
- Deciding the location of the firm
- Developing trade name and Logo
- Creating the necessary physical infrastructure
- Applying for the grant of permanent account number of income-tax
- Opening current account with the bank
So the procedure for establishing a business firm after selection of ownership organisation are :
1. Deciding the location of the firm :
The next step is to decide the location of the firm. It should be ensured that the firm is located at proper and easily accessible location. A good location in fact lends credibility to the status of the firm. However it is not a prerequisite that one must have an office at some central location, particularly if one proposes to start as a merchant exporter. In the latter case one can even start the business from one’s own residence.
2. Developing trade name and Logo :
It is very advantageous to create a trade name and a logo for the proposed firm. Its design should be such that it will create a favorable impact on the prospective buyers for the firm’s products. A dynamic entrepreneur can use it as an effective marketing tool for the promotion of his products.
3. Creating the necessary physical infrastructure :
The basic infrastructure one needs would depend upon the type of export business one plans to start-merchant exporter or manufacture exporter or service provider. In the case of manufacturer exporter, a proper project report will have to be prepared to establish the manufacturing unit and a supporting office set-up. There are, however, a few things that are common to all kinds of businesses, namely, minimum stationery in the form of letter heads, visiting cards and envelops. There is no need to print any other stationery because an export firm has to use the standard stationery for sending shipment of goods.
The various documents used in the export-import business are available from the market from any shop selling government publication. Besides stationery, the firm also needs to have a computer with internet facility, a fax machine and at a later stage; a website needs to create for the firm. This has assumed importance in view of the revaluation in the field of information technology making it imperative for every business firm to take advantage of the facilities offered by advancements in the area of information technology (one has to be a part of e-business operations) in order to be competitive in the international market.
4. Applying for the grant of permanent account number of income-tax
The next step is to apply to the income tax department for the grant of permanent account number (PAN) of income tax. This is a requirement to open the current account in the name of the proposed business firm and to apply for allotment of the Importer Exporter Code Number.
5. Opening current account with the bank
The entrepreneur should now open an account with a scheduled commercial bank. Initially, one may open an account with the branch of the bank where the requirement of minimum balance is the minimum. It is however, important to open the account with the branch that deals in foreign exchange and also accepts the export-import documents for negotiation and other related dealings.
Once the bank account has been opened, the business firm is established. The next step is to apply for the grant of importer-Exporter Code number.