Startup capital

Others 654 views 4 replies

vishnu kumar

MBA

60 Points Joined August 2013

I am new to this forum and hope i have selected right category for my issue.

I am working in IT sector for last 7 years and now thinking to move to my home town and do business(still i am planning which kind of business). How to create fund for my business ? I have 5 lacs saving in mutual fund , saving account and other instruments altogether. But i was looking for one of the franchisee and money required is 15 lac for now. So there is a gap of 10 lac rs.

I want to ask can i ask multiple people(friends and family ) to put money in my account (10 lac ) and using that money can i start franchisee. Is there any tax complications there ? i had a good salary for last 4 years and i could have saved 15 lac but it's not reflecting in my account for now. So i want some people to put cash in my account and later after 2-3 months , i can use those money to take franchisee and do my business. My last salary was 8 Lac Per Annum for last three years.

Please suggest.

Thanks

Replies (4)

Mihir

Wealth Manager

5293 Points Joined December 2008

Doing business is personally very gratifying. But if we do not have a concrete plan, we might be able to handle the disappointment but losing money, in today's economy, is not an option.

If you have a solid business plan, then you can borrow from friends and family. If required, you can enter into partnership to form LLP. You might even prepare a project report and look for an angel investor. You will need a CA to look after your taxes and accounts, and an advocate to check the franchise agreement.

In case, you are not so confident, there is nothing wrong in continuing your job. Economy is not looking good, so be careful before putting in money.

vishnu kumar

MBA

60 Points Joined August 2013

Thanks Mr Mihir for your suggestion.

But my main issue was in case i go for a business at my home town ?

Can i show my capital of 15 lacs in account though i ll be taking 10 lacs from my frens and family but i dont want them to be as partners. I want to show that money as my earned money.

As i have worked for more than 7 years so logically a decent saving could get me to 15 lacs.

What will be tax complications for the same ? I have 5 lac presently in different instrument and i have paid my taxes lawfully for last 7 years.

Thanks a lot :)

Mihir

Wealth Manager

5293 Points Joined December 2008

If you are taking loan, it is your choice whether you want to show it in your books of accounts or not. Loan taken shall be supported by a loan agreement otherwise it will become taxable. If you are going to sell some of your investments, you need to compute the taxability of returns.