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How to start a Human Resource Consultancy?

I am a regular member of 'Yahoo Answers'; I had been an active participant of it since Sep 2006 and at least 10% of my answers would have been to questions regarding 'How to start a HR Consultancy?'.

Here I am writing this article to provide information about starting a Human Resource Consulting business in India.

1. Choose a name for your company:
Deciding name for the company is very important as this is the brand for which you will be working for the rest of your life. You should like the name and you should also be able to relate yourself to the company.

2. Choose the type of company you want to open:
There are 4 types of company which you can form in India.

Sole Proprietorship: A sole proprietorship also known as a sole trader or simply proprietorship is a type of business entity which is owned and run by one individual and where there is no legal distinction between the owner and the business. All profits and all losses accrue to the owner. All assets of the business are owned by the proprietor and all debts of the business are his debts and he must pay them from his personal resources.
Note: The Indian Company Law states that it is not necessary to register a Sole Proprietorship in India.

Partnership: A partnership is a type of business entity in which partners (owners) share with each other the profits or losses of the business. Partnerships are often favored over corporations for taxation purposes, as the partnership structure does not generally incur a tax on profits before it is distributed to the partners.
Note: The Indian Company Law states that it is not necessary to register a Partnership firm in India. However, it is advised to have a legal agreement between the two partners in order to avoid the future troubles that might rise.

Private Limited: A private company is a type of company incorporated under the Indian Companies Act. It has shareholders with limited liability and its shares may not be offered to the general public, unlike those of public limited companies
Note: You need to register a Private Limited. You can contact a CA or a Advocate specialized in Company Affairs to know more about this.

Public Limited: A public limited company is a type of limited company in India which is permitted to offer its shares to the public.
Note: You need to register a Public Limited Company. You can contact a CA or a Advocate specialized in Company Affairs to know more about this.

3. Starting as a sole proprietorship firm:
If you are starting alone I recommend you to start as a sole proprietor, because it's easy to start and total control is in your hands.

Also the total investment is less. If you are going for Private Limited then you need to buy Director Identification Number (DIN); Digital Signature etc; etc; Why unnecessary headache? Start in a Simple way as and when you grow, you can convert it to a Private or Public Limited.

Also there are not many formalities for this kind of firm, you just have to get a current account ready in your company name and you are ready to do business. However, if you company turnover reaches 10 Lakhs per year, you will have to register for service tax.

4. Open a current account in any Bank:
Opening a current account is the most important part of business. If you are opening a sole proprietorship firm and have your service tax registration done, you can open account in any bank you want. But if you have not applied for service tax registration, you can opt for government banks to open the account.

Note: I want you to check on this, I heard that off late Government Banks have also started asking for Service Tax Number Registration. Certain banks also accept a letter from a Auditor stating that "...(Company Name)'s yearly turn over is less than 10 lacs and hence it is not mandatory to go for Service Tax Number Registration.”
So, I would recommend you to first contact the Bank to know exactly the documents that you need to produce and then a good CA.

5. Get a Website designed for Your Company:
Get yourself a professional website design for your company; it's not compulsory but definitely mandatory because no body would trust a company who doesn't have a good website.

Our Parent Company provides the following service which you can make use of:
Website Design and Development Package - includes Professionally developed Website Design and Development, Domain Name Registration, Web Hosting etc;

Value added services like Logo design; Letter Head Design; Visiting Card design are done free of cost.

What More? You get Domain Name Registration and Web Hosting free for 2 more years. Which means NO RECURRING COST for the next 3 years. All this for Rs.4999 only. Contact Us now to design your site.

6. Buy naukri or monster login:
You have to buy naukri or monster login to supply candidates to your clients. This is the costly part of consultancy business but you have to buy this to get started.

Naukri login costs around Rs. 60,000 for 3 months and monster is almost the same for 3 months. You can buy it anytime but i recommend you to buy it once you get your first client. Don't forget to negotiate as who knows you can get a better deal.
Note: Also why don't you talk with existing consultancies in your city for sharing the database. Just a try, who knows may be if it clicks then you can considerably reduce the Investment Cost.

7. You are ready to do the business:
So, these are the things that you need to know and go ahead and start your consulting business.