Always carry out thorough research about what type of Businesses can be started in that area/place and find out what other businesses already exist in your vicinity and see how they do well there. Look out for any legal or law-related issues which might arise in the future because of the actions you are about to take.
There can be many other factors, too, depending upon your business type; like if you plan on starting a restaurant, they also pay attention to various health and hygiene factors, inspection reports, etc. If you wish to start an online business, consider factors like Internet connectivity availability, etc.; all these small things play a major role when successfully running a business according to RemoteDBA.com.
You need to decide on what type of business you want to set up. There are some examples such as a Shop or Internet-based business. If you’re going to play it safe, you can go for the shop-based business because that is less risky and easier to start with.
After you have decided on your type of business, the next thing is deciding where you will set up your shop/place of work from. A location needs to be chosen after considering how much money it will cost and whether the property would require any permission from local authorities before being established. Also, think how much time and effort would be necessary to ensure that this location has enough road traffic to get to know about it.
List of things to do before buying a piece of land
- Try and set up some meetings with local estate agents so that you can get an idea of how much the property would cost. Also, try and meet realtors dealing in properties close to your business location/shop, etc.
- Once you have got the information on prices, ask yourself whether it is feasible for you to pay such amounts for this particular location (consider your budget). If not, scout around for other possible locations where you can expand your business later on or use specific spaces like the parking lot, etc.
- Once again, consider traffic volume – make sure that it is enough for your business to get good customers.
- Consider if the property needs any permission or license from authorities, etc.
- Make sure you have all the essential documents in order before buying a piece of land – these things include ID proofs, Address proofs, Pan Card Number, etc.
- Once you’ve decided on the location/property of your shop/office’s location/property, go ahead and buy it/rent it!
- Do not overpay for this property; make sure you get it at a reasonable rate (consider rates in different areas – do not pay too much).
- You should also consider local infrastructure like electricity supply when deciding your location. You would not want to rent a place with an inadequate electricity supply.
Whether you want to go for a shop-based or an online business, the legal documentation required would be the same. Once you have decided on your type of business and location, it is time to buy/rent a space. Now, once again, there are two possibilities. If you already own some property/space, you can use it as your business premise. That is great because most legal work is done just by using that particular property or space.
In case you do not own any such place but still want to start with a shop/online business, then also there are usually two ways – either become a tenant in someone’s property or a lessee in someone’s property, or you become the owner of that property by paying for it. Buying a place to do business from is just like buying any other piece of real estate – there are certain legal documents that need to be prepared and submitted – such as:
A Memorandum of Agreement (MOA)
This document defines the obligations and responsibilities of both parties involved. For instance, if you are buying an office/property from somebody, the conditions would be mentioned here; how much money needs to be paid at what time, etc. This agreement should also mention the penalty charges for breaking this agreement (and sometimes even jail terms, too!). Also, remember that even though all these agreements might sound harsh and cruel – they will help you in the long run.
A power of attorney (POA)
This document is a written authorization given by a person to another, authorizing that person to transact business on their behalf. In simpler words, this POA allows one person to deal with all legalities and business issues related to a specific property or place. This legally empowers them for any transaction or work associated with it. He can rent out or sell off space from this property as he wishes.
An agreement letter
This is an oral agreement that needs not be put up in writing but is equally important as these are the actual details of your lease, how much money is being paid for this particular purchase, etc.
These are just a few of the most basic documents you might need to buy the property and start doing business. There are other unique requirements for different properties, like agricultural land requiring no such POs, but there is something called an agreement letter (it is compulsory to have this). Similarly, if you wish to do business from a shop, it would require slightly different documentation. All these legalities may sound too serious and harsh initially, but they serve a vital purpose; we all know how we Indians go scot-free after committing several crimes or frauds – because we often manage to hide behind loopholes in-laws and rules! So these strict procedures make sure that both parties abide by what has been agreed upon between them, and no one gets away with their crimes.
Remember that you can also become a house lessor (instead of becoming a lessee later). The only purpose of doing this is to save money on taxes; if you become a house lessor, you would be required to pay certain rent-related taxes that are not levied if the same property is bought for residing purposes or business purposes (for earning income). Before making such decisions, you need to know your options; ask an accountant about tax benefits available under various circumstances.