India: Operating a Business

Sole Proprietorship

Number of partners: One
Capital (max/min): No minimum capital
Shareholders and liability: Unlimited liability.

Partnership

Number of partners: Minimum number is 2, while as the maximum number can be 20 in case of a General Partnership and with no maximum for all Limited companies.
Capital (max/min): No minimum capital
Shareholders and liability: Liability of the partners is unlimited.

Private Limited Company

Number of partners: Minimum number is 2, while as the maximum number can be 50
Capital (max/min): Minimum paid up capital of INR 100,000
Shareholders and liability: Limited liability to the amount contributed.

Public Limited Company

Number of partners: Minimum 7 partners; while as there is no limit on the maximum number of members/shareholders. Minimum 3 directors.
Capital (max/min): Minimum paid up capital of INR 500,000
Shareholders and liability: The liability of a member is limited to the face value of the shares he owns.

Co-operative

Number of partners: Minimum number is 10; while as there is no limit on the maximum number of members. However, the members must be residing or working in the same locality.
Capital (max/min): No minimum capital requirement
Shareholders and liability: The liability of a member is limited to the extent of his capital contribution.

Joint Hindu family business

Number of partners: All members of a Hindu undivided family can do business jointly under the control of the head of the family who is known as the 'Karta'. The members of the family are known as 'Co-partners'. Minimum two members.
Capital (max/min): No minimum capital
Shareholders and liability: The Karta has unlimited liability while the liability of the other members is limited to the value of their individual interests in the joint family.

Business Setup Procedures

The Competent Organisation

Ministry of Corporate Affairs

Company Law Board

For Further Information

Consult Doing Business Website, to know about procedures to start a Business in India.
Ministry of Corporate Affairs, List of registered Certified Filing Centers.

Financial Information Directories

Dun & Bradstreet - Worldwide directory with financial information on businesses

Kompass India - Business directory for India

For Further Statistics

Ministry of Statistics and Program Implementation

For Further Information About the Labour Market

Employees' Provident Fund Organization, New Delhi
ILO, The representation of the International Labor Organization in India

Opening Hours

 

• Legal Weekly Duration

Maximum 48 hours (9 hours a day).

• Maximum Duration

The total number of working hours (including overtime) should not exceed 60 in a week and the total overtime hours should not exceed 50 in a quarter.

• Night Hours

10 pm until 7 am.

Working Rest Day

In general, Saturday and Sunday are not working days, but this is not the case in all companies.

Paid Annual Vacation

The number of leave days varies from State to State. The total number of leaves may vary from 15 days to 30 days in a year.

Retirement Age

It varies between 58 and 65 years depending on the state and the employee's status.

Child Labour and Minimum Age For Employment

Though the Child Labor Act -1986 prohibits work by children under 14 years in factories, mines, domestic work, roadside eateries and other hazardous industries. However, a child assisting his/her family is exempt from the provisions of the Act.

Pay

Minimum Wage

India does not have a single nationwide statutory minimum wage applicable to all workers; instead minimum wages are determined by central and state governments by industry and skill level, with a commonly referenced baseline of INR 178 per day as a statutory floor.

Average Wage

The average wage fluctuates a lot depending on activity sectors and States. According to a study by Salary Explorer, the average monthly salary was INR 31,900 in 2021.

Other Forms of Pay

• Pay For Overtime

Any worker working for more than the maximum prescribed time is entitled to wages in respect of such overtime work at twice the ordinary rate of wages.

Industrial units are required to pay a minimum bonus to his employees even if the unit suffers losses during the fiscal year.

Social Security Costs

The Areas Covered

Provident fund, pension, survivor deposit-linked schemes and gratuity for long-service workers (five years or more)

Contributions

Contributions Paid By the Employer: The Employees' Provident Fund (EPF) Scheme is funded by the employer at 3.67% of monthly salaries (plus 0.5% of monthly salaries for administrative costs). 8.33% of the salary is compulsorily contributed to the pension scheme. If the monthly salary of employees exceeds INR 15,000, this contribution is allocated to the pension fund. Finally, the employer must contribute to Employer Liability with an average of 4% of the monthly payroll.
Contributions Paid By the Employee: The Employees' Provident Fund (EPF) Scheme is 12% contributed by the employee, the Employee Pension Scheme (EPS) is not contributed to by the employee. 

Competent Organization

Ministry of Labor and Employment
Employees’ Provident Fund Organisation
Employees’ State Insurance Corporation

Recruitment

Recruitment Agencies

National Employment Exchanges (Public), Employment Agencies (Private), Labor Contractors (Private)

Recruitment Websites

The Directorate General of Employment and Training (DGET)
Naurkri.com (a web-based private job site in India)
MonsterIndia.com (a web-based private job site in India)
Careerjet (an employment search engine for India)

The Contract

Dispute Settlement

Social Partners

Employer Associations

FISME - Federation of Indian Micro and Small & Medium Enterprises
IIA - Indian Industries Association

Social Dialogue and Involvement of Social Partners

With some exceptions, India has company unions rather than trade unions. These are often affiliated with national labor organizations. Political parties promote various trade unions. The bargaining power of the unions is declining as the government pushes forward its reform agenda.

Unionisation Rate

Although there are more than 20 million unionized workers, unions represent less than 25% of the workers in the organized sector (primarily in state-owned organizations), and less than 5% percent of the total work force.

Regulation Bodies

Labor Bureau