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How to Start a Construction Company: Licenses Required, Registration, Documents Required

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How to start a Construction Company

Starting a construction business is not easy, but it can be quite rewarding. This business is best suited for someone with a lot of patience, perseverance, and courage because you will essentially be working with a lot of heavy machinery. When talking about the machinery itself, we hope you like to work with steel and concrete because those are the two materials you will be dealing with as you help to build structural creations of every shape and size!

And it is also important to note that starting a construction business may be quite lucrative for business owners in India. However, if you are considering this line of work, then here is a detailed post that tells you everything about how to start a construction company in India, including the licences required, documents needed, and much more. Scroll down to find out more.

Table of Contents

How to Start a Construction Company in India?

We are living in revolutionary times as we witness the boom of urbanization. This technological change is manifesting itself everywhere, from cities to small towns, where even remote areas will be brought into our modern age with increased access to faster and more efficient communication between cities. The real estate construction business has already been flourishing for some time due to an increase in demand for new homes and other establishments. However, this increasing trend in urban living has made the construction sector an even more profitable industry both now and in the years to come. Thus, starting a business in the construction area is a good way to earn money. Though it’s going to be quite an uphill and time-consuming climb, you will love the good profit result.

With the above insights, you would have decided to start a firm. Now if you are looking at how to start a construction company in India, then here is a detailed process that explains everything about how to get started with the construction business.

Steps to Starting a Construction Business in India

There are a lot of factors to consider when starting up a construction business. Here is a detailed step-by-step process that outlines how to start a construction business in India:

Step 1: Construction Company Business Planning

Many things go into starting a new construction business, but one of the main factors is planned preparation. Businesses that do not take the time to plan may suffer unexpected losses and fail. To help avoid this from happening to you, start by creating a detailed plan that details your budget, goals, terms of finance, collection of raw materials, equipment needed for employees, and plans for specific projects. Be sure to include details on when you plan to release the product or make an announcement about it as well.

How To Start a Business in India?

Step 2: Research on Construction Company Businesses 

Starting a new business can be a difficult undertaking, especially when you don’t know what you’re getting yourself into. It is important to not only do thorough research on the company that you’re looking to provide services, but it’s also just as important to make sure that you compare prices with other potential construction businesses since competition in this industry is particularly high, and price-based decisions are necessary when choosing which offers are most affordable and suitable.

Apart from that, each state has unique laws and regulations. Thus it is good to know whether or not the business’s legal paperwork needs to be filed solely in the state of location or if different states come with specific requirements. Business owners within this field should always keep up with the latest trends through their various associations so as to maintain their skill set with regard to construction materials as well as codes regarding safety concerns for both workers and clients.

What Licenses Are Needed to Start a Construction Business in India?

One must have the following licences to start a construction company in India:

  • Bank Account of the Company
  • Certificate of Incorporation of the Company
  • GST Registration
  • Company’s PAN.
  • PF and ESIC Registration
  • Professional Taxation of the State
  • The company’s TAN.

Step 3: Registering Construction Company Businesses

Legalising your business involves getting it registered with the government. Failure to take this step could easily raise questions about your legitimacy, jeopardise any contract with a supplier or customer, and even land you in trouble with government officials.

Under India’s Company Act 2013, business owners should register either as a private limited company or a public limited company, depending on whether you’re a sole proprietor, partnership firm or a Limited Liability Partnership (LLP). You also need a GST and sales tax registration number, after which licences are issued. The TIN number is next on the list, followed by opening up your bank accounts and getting a PF number. If you intend to carry out extensive renovations or construct multi-storeyed buildings, a PWD licence may also be required. If that is the case, be sure to have all relevant papers ready before making those applications because otherwise, delays may arise during an inspection of your premises.

How to Register a Construction Business Company in India?

Since most business owners register their company as a private limited company, here is the list of steps that explain how to register your company as a private limited company.

The steps to register a construction business company in India are as follows:

  • Step 1: Submit a DSN application to get a Digital Signature Certificate (DSC) and a Director’s Pin (DPIN). The Ministry of Corporate Affairs issues DSCs and DPINs (MCA).
  • Step 2: Get a DIN from the MCA’s official website.
  • Step 3: Check for the name’s availability among three name possibilities to complete it.
  • Step 4: For business formation, go to MCA’s official website and download the SPICe INC 32 form (Simplified Proforma for Incorporating a Company).
  • Step 5: Draft a Memorandum of Association (MOA) and Associate Articles of Association (AOA).
  • Step 6: Obtain a Corporate Identity Number (CIN) to be used on the incorporation certificate.
  • Step 7: After getting the incorporation certificate, apply for a PAN, TAN, and bank account to receive them within a week.

Step 4: Hiring Employees for Construction Business

Construction company owners are like chefs. Just as chefs need to be in the kitchen, construction businessmen and women need to be on-site, overseeing the work that’s getting done. In addition to checking in on the work, construction business owners should also check with subcontractors and clients to make sure all is running smoothly.

Thus, construction company business owners must hire all the necessary staff who are required to run their business successfully. Construction company owners need to develop relationships and network with suppliers, builders, contractors, brokers, property dealers, and more to grow their business. These entities are the only sources for a business owner from which he/she can get the labour to expand their business.

Step 5: Buying Necessary Vehicles for Construction Business

Transporters are a vital part of any construction business. Based on the research, the owner will have to fix the budget and buy the necessary vehicles to run the business without interruption. Also, if the owner doesn’t have enough cash, the entrepreneur can seek contractual partnerships with other entrepreneurs who run transport businesses, which can be used to acquire necessary transportation when the need arises.

Step 6: Insurance for Construction Businesses

As an entrepreneur, your business is priceless to you. You work tirelessly day and night to ensure that each and every decision that you make for it is going to benefit it in the long run. Since starting up your own business, this precious spirit has become a lot more valuable to you as it was once just an idea rolling around in your head–and now much more so as you have poured so much of yourself into ensuring its success.

The last thing you want is for something bad to happen that could potentially damage or possibly stop this machine from producing revenue–and unfortunately, these disasters do happen frequently, especially when you’re dealing with construction equipment such as trucks and bulldozers that are worth lakhs. That’s why it is important to ensure these machines with a trusted insurer who can help prevent or recover from a major financial loss.

Step 7: Construction Company Business Loan

Business owners in the construction business have several options when it comes to securing financing for their company. Like any other business, financing is a vital component of the construction industry and requires enough funding in order to operate efficiently. Many business owners turn to banks for home loans with a construction loan option due to the potential investment that may not be covered with borrowing power alone. That’s why so many banks offer different types of lending operations, from term loans, working capital, overdrafts, and lines of credit that can be applied towards a wide array of equipment during the beginning phases of an established business.

How To Get a Business Loan From a Bank?

Business Loan in Mumbai Business Loan in Pune
Business Loan in Bangalore Business Loan in Delhi NCR
Business Loan in Hyderabad Business Loan in Chennai

Now that you have been provided with all the necessary information on how to start a construction company in India, Starting a construction company will be no easy task! Thus, consider all your options before deciding whether to start a construction business or look for another one. Construction is a very competitive industry, and there will be a lot of risks in it. Some construction companies might go under because of a lack of perseverance and patience in a competitive industry. So make sure that you are prepared to jump over those hurdles.

Best wishes from the NewsOzzy team!!

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