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I tried starting a manufacturing unit in India (2020)

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Re: I tried starting a manufacturing unit in India (2020)

#31

Post by 2Gkashmiri »

roguesherlock wrote: post #26
2Gkashmiri wrote: post #14

Earlier quoted context omitted.

dude. unless you are doing some space age shit or something, you don't need to set up a company in india to do business. sure the whole "limited liability" and that but in reality that is just a smokescreen. just use your personal pan card to open a bank account, get a GST registration, do income tax audit and you will be done. No compliance, no nothing. i do taxes and books for businesses with 250+ Crore turnover an…

isn't the tax burden for sole proprietorship higher than for say limited company? 30 vs 25 iirc?

you can claim as many expenses as you like, in companies there are restrictions, there are deferred tax assets and liabilities because of companies act and income tax act depreciation difference. There is MAT applicable sooner than sole proprietorship i think.

lets just say it is easier to "appropriate" the books as a sole proprietorship.

you have to pay mca fees for your authorized capital, one off but if you are doing serious business, it costs.

i know, 5% "might" sound a lot in taxes but by fudging some numbers, by not paying complaince fees, by not being on the hook for a "lot of compliance" and the penalties that come up, it does not sound worth the risk....

Look, if you are doing big business, want to raise money from the public, sure go ahead but not otherwise.

Re: I tried starting a manufacturing unit in India (2020)

#32

Post by silasdavis »

systemvoltage wrote: post #27
etaioinshrdlu wrote: post #10

Earlier quoted context omitted.

Countries with high paperwork and bureaucratic burden are famous for also being highly corrupt. This is probably not a coincidence. Likely all the excess paperwork makes it easier to hide what's really going on, easy to provide roadblocks for those who don't pay, and easier to generally hide bad activity in a sea of noise.

This has nothing to do with physical paperwork (See Japan which runs on paper forms even today; most hospitals in US are paperless but they're far from efficient), but the underlying policies that dictate the requirements and how the approval process must be conducted, number of parties/agencies/teams involved and the incentives put in place to make sure it gets done within a certain timeframe (QA controls). Some gov…

Paperwork and bureaucracy conducted face-to-face is completely different in its capacity for bribery, cronyism, and discriminatory behaviour outside of the official system.

Automated systems can be quite awful (original research: Spain) but neither paper or digital systems would officially state the human factors involved in turning them over. There's simply less opportunity for these human factors in more automated digital systems.

Re: I tried starting a manufacturing unit in India (2020)

#33

Post by agileAlligator »

pseudo0 wrote: post #18

It seems like the problem is that the author has a moral objection to paying bribes in an area where bribery is customary: > Obviously, they are playing “hard to get” to get me to pay some bribe and initiate the process. But after going through all this, I am not going to pay any bribe to anyone. And: > And they openly demanded bribes after waiting for four months. > So the Gram Panchayat NOC is stuck because of non…

> It seems like the problem is that the author has a moral objection to paying bribes

Duh?

Re: I tried starting a manufacturing unit in India (2020)

#35

Post by sebstefan »

pseudo0 wrote: post #18

It seems like the problem is that the author has a moral objection to paying bribes in an area where bribery is customary: > Obviously, they are playing “hard to get” to get me to pay some bribe and initiate the process. But after going through all this, I am not going to pay any bribe to anyone. And: > And they openly demanded bribes after waiting for four months. > So the Gram Panchayat NOC is stuck because of non…

I wouldn't consider the author to be the problem.

Re: I tried starting a manufacturing unit in India (2020)

#36

Post by sonthonax »

agileAlligator wrote: post #33
pseudo0 wrote: post #18

It seems like the problem is that the author has a moral objection to paying bribes in an area where bribery is customary: > Obviously, they are playing “hard to get” to get me to pay some bribe and initiate the process. But after going through all this, I am not going to pay any bribe to anyone. And: > And they openly demanded bribes after waiting for four months. > So the Gram Panchayat NOC is stuck because of non…

> It seems like the problem is that the author has a moral objection to paying bribes Duh?

There’s a distinction to be made between a small customary bribe to an seriously underpaid state employee, and a larcenous bribe to a high official.

Re: I tried starting a manufacturing unit in India (2020)

#37

Post by somat »

etaioinshrdlu wrote: post #10
spaceman_2020 wrote: post #8

India's obsession with paperwork is unceasing and baffling. Everything requires an application, even when everything can be done digitally. You need letters and stamps to get anything done. Case in point: the "company stamps" that are required for everything you do with your business. From getting a debit card to changing the maturity instructions for a corporate deposit, you need to sign your name AND stamp it with…

Countries with high paperwork and bureaucratic burden are famous for also being highly corrupt. This is probably not a coincidence. Likely all the excess paperwork makes it easier to hide what's really going on, easy to provide roadblocks for those who don't pay, and easier to generally hide bad activity in a sea of noise.

The paperwork is an attempt(usually misguided) to stop the corruption. The idea is that if you have to account and document all actions you will have act in the proscribed manner and not in a way that benefits you.

This usually fails for the reason you posted. I am not really sure how you are supposed to stop corruption once it gets rooted in your society. It is a vile and subversive menace that turns every one into a criminal, preying on their fellow man. A very unpleasant environment to live in.

The best article on corruption I have seen.(if you have time for an hour long power point presentation )

https://www.youtube.com/watch?v=i9i47sgi-V4

Re: I tried starting a manufacturing unit in India (2020)

#38

Post by JumpCrisscross »

2Gkashmiri wrote: post #14
spaceman_2020 wrote: post #8

India's obsession with paperwork is unceasing and baffling. Everything requires an application, even when everything can be done digitally. You need letters and stamps to get anything done. Case in point: the "company stamps" that are required for everything you do with your business. From getting a debit card to changing the maturity instructions for a corporate deposit, you need to sign your name AND stamp it with…

dude. unless you are doing some space age shit or something, you don't need to set up a company in india to do business. sure the whole "limited liability" and that but in reality that is just a smokescreen. just use your personal pan card to open a bank account, get a GST registration, do income tax audit and you will be done. No compliance, no nothing. i do taxes and books for businesses with 250+ Crore turnover an…

> you don't need to set up a company in india to do business

You do if you want outside investment. Or if you want professional management. Or if you want to seriously engage in international business.

What you say is true: most businesses are sole proprietorships. But that's a significant and manufactured barrier to growth.

Re: I tried starting a manufacturing unit in India (2020)

#39

Post by eunos »

spaceman_2020 wrote: post #8

India's obsession with paperwork is unceasing and baffling. Everything requires an application, even when everything can be done digitally. You need letters and stamps to get anything done. Case in point: the "company stamps" that are required for everything you do with your business. From getting a debit card to changing the maturity instructions for a corporate deposit, you need to sign your name AND stamp it with…

>Why? I have no idea!

Legacy of British civil service and bureaucracy ?

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