In this blog post, Sonia Shinde, the Senior Manager of Operations at Pcura Consulting Pvt. Ltd. who is currently pursuing a Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, gives a brief overview about the procedure to start an online media company in India.
Media is one of the most broadly means of communication to gain information. Media includes broadcasting mediums like newspapers, magazines, television, radio, mails, mobile phones, fax, internet, etc. We use media on a daily basis; it’s like a part of our life. Today people use web based / online media as it is easier to communicate and access any information from anywhere through this platform.
A media company can be in form of television channels, print, online or radio platforms that provide news, information or entertainment on the topics of our choice in various languages in order to attract millions of subscribers. This in turn makes the media company to raise their profits. Let’s have a look at what it takes to have our start a media company.
It takes 4 steps to start company
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Business plan:
You need to plan your business; plan includes market research, and how you will generate funds and a Strength, Weakness, Opportunity, Threats (SWOT) analysis.
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Write your plan:
After your first round of planning, it’s time to write your plans for the business.
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Register domain name and set up your website:
Chose a domain name which is already available and ready to use. Once you get your domain name, the process of building a business website design begins.
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Legal:
A number of steps need to be followed to make your company legal.
One has to go through legal formalities in order to start a company or an online Media company in India. A business can be registered as a Sole Proprietorship, Partnership, Public/Private Company, Limited Liability Partnership (LLP), One Person Company.
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Sole Proprietorship:
It is a single man firm with unlimited liabilities. The simplest way to start a business is to have service tax registration or VAT registration and open current bank accounts. Sole Proprietorship is good for startups which are trying new ideas of business and their budget is less than 5000 rupees.
2. Partnership Firm:
At least 2 people are required to start a partnership firm. The firm needs to have a registered partnership deed with a current bank account and a VAT / Service Tax registration. Partnership Firms can be started when there are partners with common vision of business who is ready to share profits.
3. Private Limited Company:
It needs to have a minimum of 2 Directors with a minimum capital of 1 lakh rupees. It’s best for startups seeking funds from investors. Private Limited Company works is suitable for long term business, where ideas are proven to be profitable and can also attract investors by selling their shares to investors.
4. Limited Liability Partnership:
It is a mix of Private Limited Company and Partnership Firm. It needs minimum 2 partners. It has higher compliance requirements as compared to an ordinary Partnership Firm. Choose Limited Liability Partnership when your budget constraint to less than 10,000 and you also want to enjoy the perks of setting up a company.
5. One Person Company:
It is like a Private Limited Company but only one person involved. In this type of company, you don’t want to be a partner with anybody, but can enjoy the benefits of a company.
Legal Procedure to start an online media company
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Register Domain Name:
Get a unique domain name for the online media business by paying registration fee. One needs to submit valid address and ID proofs.
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Get Federal Tax ID Number:
This is when you want your online business to be a separate legal entity. You need to get a federal tax ID number form Indian Revenue Services (IRS). IRS keeps a track of your business transactions.
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VAT / Service Tax:
A company must apply VAT to its applicable products and pay taxes to the government for services.
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Memorandum of Understanding with Vendors / Contractors:
You need to be very precise and stringent while drafting Memorandum of Understanding with all vendors /contractors so as to prevent forged services. It’s possible that you may sometimes not sell or offer services/products directly and hence are not aware of authenticity of same. This may generate legal issues so you need to be careful while contracting. Therefore, add a disclaimer to all your services / products to get shielded from legal liabilities.
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Investment in Data Security:
Invest in cyber security as this helps in safeguarding your customers’ financial transactions. A failure to protect customers’ data could cost you a sum of up to 5 crores in terms of fine.
Other important steps as follows:
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Trade Mark Registration:
This is more important for web based / online business. Register Brand or Logo with “Trademark”.
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Website Terms & Conditions:
You need to take care of the website’s legal terms and conditions such as privacy policy, disclaimer, and third party data.
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Vendor Agreement:
An agreement needs to be drafted by enlisting requirements such as payment policy, refund, taxes applied to the services/ products from vendors.
thanks for this article .its nice blog.
Can I re-register my company under a different structure, say from sole proprietorship to LLP for example, without creating another company and transferring all assets?
In the above post it is written that to get a unique domain name for the online media business, one needs to submit valid address and ID proofs. Should the address be related to the residential address of the applicant or business address (if any)? Kindly throw some light. Regards.