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Startup India All the Necessary Details

Startup India  All the Necessary Details

The Startup India Stand up India event was organized by the Indian Government under the aegis of Narendra Modi, the Prime Minister of India, on 16th January 2016. In a way this event encapsulated all the benefits for starting an ecosystem of startups in India. Such an event had a significant amount of importance considering how it was the first time that the national government and the startup community in India were coming into contact with each other and interacting on key issues. The very programme – Startup India – can be deemed a flagship effort on part of the central government.

What does this programme intend to do?

The Startup India plan is supposed to create a strong ecosystem where innovation can be nurtured and more startups can be had. This is expected to lead to a level of economic growth that can be sustained over the long time, and also lead to employment on a huge scale. The national government – through this programme – aims to empower these budding business units in such a way that they can chart their own course of innovation and grow in the way that they wish to. In order to satisfy the aim behind this programme an Action Plan has been created by the Government of India.

Action Plan

This Action Plan deals with each and every aspect of the startup ecosystem in India. By using this plan the government is hopeful that it will speed up the startup movement in the country. At present such companies are only limited to the technology and digital sector but the national administration wants it to spread to other sectors as well such as agriculture, healthcare, manufacturing, education and social sector. From a geographical point of view these are restricted to the tier 1 cities but the government is hopeful that the semi-urban and rural areas will come in its fold as well.

Compartments of the action plan

The action plan has been divided into several areas. Some of them may be mentioned as follows – simplification and handholding, industry-academic partnership and incubation, and funding incentives and support. A lot of entrepreneurs in India may be thinking if their venture would be deemed worthy of assistance under the new project or not. The Department of Industrial Policy and Promotion (DIPP) of the Indian Government has provided the definition of startups and thus made it clear as to which companies will be considered eligible for assistance under the programme.

The necessary criteria

The said company must be incorporated and registered in India. It should not be older than five years. Its annual turnover should have never been more than INR 25 crore in any of the years that it has been functional. The company should be focusing on innovating, developing, deploying, and commercializing new products, services, and processes that are technology driven in nature. It is also important that the company applying for the benefit has not been formed by reconstructing or splitting up a company that existed before. If a company has been older than 5 years or if it has ever earned more than INR 25 crore a year it will not be regarded as a startup any more.

Concept of One Person Company Explained for Young Entrepreneurs

Concept of One Person Company Explained for Young Entrepreneurs

The concept of one person company was introduced in India by the Companies Act, 2013. Ever since its introduction it has been deemed a revolutionary thought. It was an expert committee led by Dr. JJ Irani that recommended the said concept. For people looking to kick off their own businesses with a proper and organized structure the concept of One Person Company opens up some whole new opportunities. With such a company, as a young entrepreneur you will get all the benefits that are normally associated with a private limited company. This categorically implies that they will be able to access credits, business protection in a legal manner, bank loans, market, and enjoy limited liability as well.

Background of this business

As a concept, one person company registration may be a new one in India. However, it has been in existence – and also achieved a fair degree of success, it must be said – in the United Kingdom as well as several other countries across Europe. In fact, this form of business has been in existence for a significant period now. The concept itself has some special features that have been mentioned in the Sub Section 62, Section 2, The Companies Act 2013.

What is a One Person Company?

A One Person Company is basically a company that has only a single member. It also needs to be noted in this context, that for all legal intents and purposes such a company is defined in legal terminology as a private company. Normally, each and every law and provision that is applicable to a private company is applicable for one person company registration in India as well, until and unless anything else is mentioned in this regard. The Companies Act 2013 has however provided an exception to the concept.     

Exception to One Person Company

As per this exception, only a natural-born Indian would be able to register a One Person Company in India. That person needs to be a resident of India as well. This means that the advantages of such a company can only be availed by Indians who were born in the country and are staying in it as well. Alongwith this, it needs to be mentioned that the upper limit for forming such a company has been limited to 5 for each individual. Now, you may want to know how such a company is formed.

How to form a One Person Company

Normally, these companies are incorporated as private limited companies that only have a member each. Such companies normally have restrictions on inviting the public for subscribing to the securities held by the said company. These companies have some salient features such as limitation by guarantee, and limitation by shares. In case such a company is limited by shares there are some more restrictions that will apply to the same. For example it should have a minimum paid-up capital of INR 1 lakh. There are also restrictions on the number of shares to be held by the company. You can look up the internet for answers to this question - How can I register an One Person Company (OPC)?

Reasons Why Startups and Existing Businesses Need to Register Their Companies

Reasons Why Startups and Existing Businesses Need to Register Their Companies

As a new or established business owner it is very important that you get proper return on each and every dollar that you have invested in the same. One of the many expenses that you have to make irrespective of your business status is registering the company. At the time when you are starting your business such an expense may not seem to be that necessary but such a thought may be absolutely wrong. There are several reasons for that as well. For starters, with company registration you will be in a much-better position with regards to protecting your assets.

Protection of assets

It is always your dream to start your business but in business there is always a chance that you could lose the very assets that are holding you up in the first place. This could affect your family as well. In case, your business fails you may have no option but sell those assets in order to cover your losses. Quite often when a business fails people are sued and there are various financial issues as well. However, with company registration in India your assets can never be affected by your liabilities. There are plenty other reasons as well for registering your business but this seems to be the most important of all.

Securing your product

When you think of it calmly enough this is another reason why one should register a company. It could be that you have invented a product that is groundbreaking to say the very least. It is also possible that your product right now is being sold to millions across the country and has the potential to be sold outside it as well. This also means that your business is heading to the level that you may have envisaged for it. However, what happens when one of your customers faces a serious issue thanks to your product.

In that case there is always a chance that you could have to recall all your products and that could be accompanied by lawsuits as well. Worst of all, this could happen within the space of a night itself. By the time, the dust settles you may have become bankrupt or you may have spent every last bit of your insurance as well as savings. This is why you should go for online company registration. There are some benefits of completing such processes as well.

Satisfying monetary requirement

In case you are looking for private equity it is very important that you are registered as a business. When your company is incorporated the investors will feel a sense of security about things and would be able to pump in money in your company as well. If you have a proper exit strategy in plan then you can be sure that investors would be further impressed as well and that would increase your chances of receiving better investment. Normally these exit strategies are mentioned in the documents of incorporation only. In fact, venture capitalists actually prefer to invest in such companies.