Start up
Sunil Dhayani
(Querist) 31 March 2012
This query is : Resolved
I am 32 and working in provide firm. I am planning to start my own manufacturing unit firm other than my current working field at my town. I have few confusion, could you please check and help me to resolve those.
1. Is it possible to start a own firm while being employee of other private firm.
2. Please let me know whether I will make my own firm as private company or partnership firm or LLP. Which model is suitable so I will get maximum benefits from Governments, government subsidies, banks, angels or VC as I am planning to raise funds from them.
3. As I am involving my father as my partner as he is working in the same field and he has taken VRS from government service. Can I involve my wife as also another partner so I can more benefits like Government schemes and subsidies as she is female member of the firm.
prabhakar singh
(Expert) 01 April 2012
1.you can not do as active owner while in other's employment.
2.A proprietorship firm is totally out of court due to your employment.Other options can be the choice where you would sharing in profit and losses only, without holding any office of profit.The formation of company or LLP would be better comparing a partnership because of it's unlimited risk extended up to personal properties and also from angel of raising loans from institutions.
3.It would prove good that not you but your father and wife join the proposed venture and you keep away yourself on papers.
Sunil Dhayani
(Querist) 01 April 2012
Many thanks for your quick reply.
I am not sure but people are doing business though they are employee of other private organizations.
My wife is completely house wife and she is not much educated. I want to involve her because of she is female. She does not have any income tax proof (other than PAN card).
My father has practical experience in that field but he is also not much educated and does not having sound income tax returns. Even he does not have any liquidity or strong income flow other than house (which is on loan). It would be difficult for my father to explain in English to angels, vc or any financial institutions regarding the project (if it is require).
I have strong income tax returns and also having good annual package and do not have any liability. I am the only person who can prepare the project plan and other documentations.
I won’t leave the job until the firm starts working properly for next 1 to 2 years as I have to keep my job as backup.
Could you please help me to fix my role in LLP or suggest any other model which can fit in my case.
I really appreciate your advise.
V R SHROFF
(Expert) 02 April 2012
you can be a sleeping Partner of the Partnership firm, where active partners are your wife and your father.
So register p firm, and start your business.
If you so wish, keep only your father & wife as Partner. You can invest / lend money at fixed interest, to safeguard your profit.
Sunil Dhayani
(Querist) 02 April 2012
Mr Shroff, thanks for your valuable advice.
As mentioned above, my wife is completely house wife hence she does not have any income proof (Other than PAN card) and my father is retired but does not have any liquidity and not having any strong income proof or income flow (only he is working in the same field on which we are planning to setup manufacturing unit).
I want to involve my wife because she is female member and we may get other benefits from government due to this.
Both are not well educated to explain the projects to anyone whom we are planning to raise funds. And I don’t have that much fund to start setup without getting funds from financial institutions or angels or VC or somewhere else.
Could you please help me and identify where I am fit in this and also provide me what would be good for us whether Partnership firm or LLP.
Also, let me know how I can become sleeping partner.
Adv. Sagar R. Jadhav
(Expert) 03 April 2012
In Partner ship deed you can mention yourself as a Sleeping partner and other will be active partner.
For the loan purpose you can apply with active partners details and you will get cash credit facility from any bank against your stock or against debtors. There is no issue that whether your wife is having only PAN card.
Partnership firm will be good for your business where you will be sleeping partner. You may register your partnership firm in ROF.
Guest
(Expert) 03 April 2012
Unless your employment conditions with the present company or your company's employee conduct rules do not forbid you, you can start your manufacturing firm, provided your firm is not engaged in similar type of products and services that your company provides.
Sunil Dhayani
(Querist) 03 April 2012
Thanks Mr Sagar Jadhav for your advice.
What I understand from your advice is that in a partnership deed, I have to be sleeping partner and my father and my wife would be active partner and then I have to register that particular deed in registrar office.
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Now my only confusion is that, whether I or we will get or raise funds from financial institutions or somewhere else without any problem, correct? Is there any chance that whether they can raise any objection that I am currently working in another organization.
Is there any chance from my current employer or organization to go legally if I can follow the same as you have suggested.
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For your information, I am planning to setup manufacturing unit in different field other than my current field on which I am working.
Sunil Dhayani
(Querist) 03 April 2012
Thanks Dhingra sir for your advice.
For your information, I am planning to setup manufacturing unit in different field other than my current field on which I am working. Means both are totally different fields.
What do you suggest now.
Guest
(Expert) 04 April 2012
OK, it is fine to utilise your energies in right direction, if not harmful to your emplyer and does not affect your performance on your present job.
For other things about your 2nd and 3rd queries, I would like to advise you to have regular consultancy from some expert on the matters of investment, type of enterprise that may attract aid/concessions, etc., from Government, as only detailed discussion may help you rather than depending upon casual advice sought in casual manner.
Sunil Dhayani
(Querist) 04 April 2012
Thanks Dhingra sir.
I want to understand something before I can go for expert services.
Guest
(Expert) 04 April 2012
You are welcome.
