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I had a simple formula for calculating risk of leakage of some sensitive information. If one person knows an information, the risk is 1 unit. If two persons know it, the risk is not 2 units (i.e., 1+1) but it is 11 units. If three person know the same information, then the risk is not 3 units, but it is 111 units. And, so on. So you see, the risk increases exponentially (and not linearly) when more and more number of people know some information.Some 27 years back, I was posted as DCP of Anti-Corruption Bureau at Nagpur. I had entire Vidrarbha with me (at that time, there were 9 districts). Within 7 days of my joining, I had to organise a corruption related raid. It was out of an open enquiry. When we conducted searches at the residence of the accused, I noticed that the accused had removed most of the costly items to some other place. For example, there was a huge TV antenna of about 30-40 feet on the roof (this was sometime in 1991 or so), which appeared to be used one, but there was no TV in the house! So, obviously, TV had been removed to some safer place to show less and less assets to weaken our case. Being an open enquiry, the accused knew that the ACB would conduct the searches in a few days. Perhaps, someone from ACB itself had alerted him.I changed the way of working. In next two months or so, another raid was to be organised in a case. This time we had conducted a discreet or secret enquiry. Before taking a decision for raid, I called the Dy.S.P who was conducting enquiry. Told him that I had decided about registration of the corruption case and that only the TWO of us knew it. So, the risk factor was 11 units. I could not have reduced the leakage risk further. I told him that I would be personally doing all the secretarial work myself so that I don’t have to involve even one more person (as the risk would have become 111 units). I warned him that if the information gets leaked even to a single person, I would presume that he had leaked it. So, we fixed the date for search. I took office keys from the clerk who used to maintain them. Past midnight, at about 2 am, I silently went to the office alone. I myself opened the office. In fact, the chowkidar of the area (it was a small market area) started blowing whistle after hearing some office being opened past midnight, thinking that some criminal was trying to break the office open. But, when he saw me, he became silent. I entered the office. Started typing. Various types of orders (for conducting searches) were to be typed, as we were conducting searches without warrant from court, in order to maintain secrecy. I typed on the manual typing machine for about 2 hours. Prepared their copies. At 4 am or so, I returned home. Left for another city where I had called officers for briefing and forming search teams. I had deliberately called them at a different location to maintain secrecy about place. At 5 am, I briefed officers, gave them sealed envelopes containing search orders, etc., just indicating locality name and city name, not disclosing the actual address or name of the accused. These full details were inside the envelopes which were to be opened after reaching in the locality. This was the best we could have done to coordinate the operation, at a time when mobile phones were not yet invented. At 6.30 am, the searches started at 6 places simultaneously.Now, let me tell you. The results were extremely encouraging and amazing. Due to the highest level of secrecy maintained by us, we discovered at least 500% more (corruption related) assets than expected in enquiry.I was in that post for about 18 months or so. We conducted a large number of similar searches maintaining the same amount of secrecy. All (repeat ALL) searches were super successful. So much so that in 18 months number of such cases in our 9 districts was more than the number of all cases in complete Maharashtra in 27 years (since 1964, when that specific type of corruption offence was first created by Parliament)!!!Reason? Secrecy. You have to plan for secrecy. You have to do hard work to maintain secrecy.The success of your whole operation is equivalent to the weakest link in the chain. If you have ONE weak link in the whole chain (who could leak information), your whole operation may fail fully.This is what has happened in CBSE paper leakage case.Let us briefly see the chain involved in CBSE. Let us say there are 20 lakh students to be examined for a particular question paper. First, you need to set the question paper. You cannot give this work to a single teacher. There would be many. In fact, deliberately, more than one set of papers would be got prepared from different groups. So, many teachers / officers would be involved in this process. Once the question paper is finalised, it will go for printing. Mind you, as many as 20 lakh copies are required to be printed. If it is a 4-page paper, 80 lakh pages will have to be printed. It is a huge work which may involve many persons in the process. Now, these papers are to be sent to various schools / examination centres, where these 20 lakh students would be appearing. As per this media report, Class 10 examinations (for 2018) were being conducted at 4,453 centres across India and 78 centres abroad, while Class 12 examinations were being held at 4,138 centres in India and 71 centres abroad. Each such centre will have varying numbers of students. So, you have to prepare, say about 5000 such envelopes, each containing varying numbers of question papers (say, 300, or 400, or 350, etc.). So, again some people would be involved in putting these question papers in these envelopes in varying numbers. You then need to dispatch them to centres (through some distribution agencies or controlling agencies). Again, some people would be needed. Ultimately, these envelopes containing question papers will reach about 4000 to 5000 examination centres, spread all across the country. At each centre, one or more persons will have custody over these question papers in seal.So, you may note that a large number of people are involved in setting the papers, printing the papers, dispatching the papers, keeping them in safe custody at the centres (or in lockers), etc.ONE PERSON cannot do this whole exercise. Many persons are involved in the whole chain.If security risk of leaking information is 11 units for two persons, how much risk would be there if say 5000 persons are involved in this process? Will it be 11111111…(5000 times)?Well, also remember, the strength of a chain is equal to the strength of the weakest link.So, in this whole chain, even if ONE person does some mischief, or if he is negligent or careless, the whole operation MAY fail. The question paper may get leaked. It may leak only locally or over a large area. It may be leaked to a few persons or to public at large. Depending on that, the failure of the whole operation would get decided.In the past also, question papers would definitely have been leaked. When our Prime Ministers and Supreme Court judges can indulge in malpractices and corruption (read, Ashok Dhamija's answer to What is the level of corruption in the Indian judiciary? Is something wrong with Indian judiciary?), how can you trust such a large number of people in the question paper chain?However, in the past, we did not have WhatsApp. There was no Internet. No cameras on mobile devices. In fact, no mobile phones also. No spy cameras that can fit in a 1 millimetre diameter or so, such as a small dot on a pen or shirt’s button, and so on. And, mind you, such mobile and spy cameras can be very powerful, as we all know.One click by any SINGLE person in this whole chain by his mobile phone or spy camera, and you’ll have the full question paper on the Internet. It can become viral in a few minutes. It spreads faster than the forest fire.In the past also, question papers would have definitely been leaked, but to a select few. Now, these things can become viral and their spread may become uncontrolled.This is democratisation of leaked information which can make or unmake future of 20 lakh students. In the past if we did not have leaked papers, then it was not because papers were never leaked, but because leakage was confined to select few.Then, there may be sabotage also. Remember that Gurgaon Ryan International School student who allegedly (as per CBI) murdered a junior student only because he wanted to get the examination and the parents’ meeting postponed. See my article on that issue: Ryan International School murder case – how unprofessional and inhuman can police be? So, it is not impossible for someone in the chain to do a sabotage to get the examination postponed or for some other motive such as to defame the Government. Remember, with paper leakage, examination is now going to be conducted again, which is equivalent of postponing the examination. Look at how much bad name the Government has got in this whole episode. So, anything is possible in My India, nowadays.So, one thing is sure. It is not surprising that a paper got leaked. I would rather be surprised why a paper does not get leaked, given the type of corrupt and inefficient system that we have and given so many people are involved in the whole process.Now the question is whether CBSE Chief should be punished or dismissed or made to resign? Well, you need an enquiry to be conducted to find out-Was there any connivance or actual involvement, direct or indirect, on his part? If yes, it is not merely a case of dismissal, but also of a criminal case.Was there any gross negligence on his part, in the whole process or in devising the system, or was there an illegal omission on his part? If so, it would definitely be a case of dismissal or resignation, but may even be fit for a criminal case (depending on detailed facts and gravity of negligence) since under the IPC, illegal omission is equivalent to a deliberate act.Was there a negligence on his part in the above process? It calls for dismissal / resignation / removal.If the CBSE Chief is not at all at fault and if he devised a perfect system and ensured its implementation also, but someone in the whole chain committed mischief and broke the trust by leaking the question paper, then I don’t think you can blame the CBSE Chief for the mischief done by some odd person in the chain. Let such mischievous person face the criminal charges for his mala fide act. But, of course, tightening of the system is required to ensure that such incidents are not repeated in future.What I have mentioned above is only a brief outline. The actual enquiry process and the consequences may be entirely different in a given situation.Lest this answer become like the proverbial never-ending tail of Hanuman, I should cover the next issue briefly.That is what can be done in future to prevent similar occurrences? Technology. Yes, technology is the answer. We may have to move to the system of online examination. Some 20 years back, I have seen software companies like Microsoft conducting worldwide online examination. Some 10 years back, I saw BITS Pilani conducting online entrance examination. I don’t think I need to multiply examples.Many years back, our election system was infamous for booth capturing and poll rigging. The electronic voting machines, invented by our own scientists, have solved that problem (notwithstanding that the loser parties always cry foul).Can we do something similar here? Can our scientists do something here?Can Artificial Intelligence be invoked to create a foolproof system for examining students by randomly created questions, but from within the syllabus, using natural language capabilities of the system? Of course, it may need time to design and test the system.If nothing else is possible, we should consider introducing examination with books. This will replace the existing rote learning system and introduce checking the understanding of the students while allowing them to use books during examination. Of course, this is only a suggestion and the experts have to examine the merits of the system.I think the system of sending the question papers by email or downloading them from servers, at the last minute at the examination centres, has already been tried in India.Let us study what is the system followed in other countries. We can try to take a leaf out of the best systems abroad. Let a committee of experts examine other systems.However, we should note that wherever there is involvement of human beings, it may not be possible to overcome the human weakness, more so, when a large number of persons are involved in the whole process. Human factor is the weakest link in the chain. Can we reduce it drastically if we cannot completely remove it? Perhaps, the artificial intelligence will provide some innovative solution in future.

Read this article - start-up registering business in india ?The information on starting or registering a business in india, is not one of those things that are very well available. The government staff who do it, don't want any layman to be informed, because their bread and butter is in the bribe money they get on each and each thing they do to accept your registration to helping you understand what and how to do it.But things are better with egovernance now.. read on. I think the company registration stuff is one of the first things to be a successful egovernanance project for India.About this post:I am setting up this blog post, and will be updating it regularly as I find more information on this and other interesting areas of starting businesses in India.. also I plan to write posts on my experience over years in helping people operate or handle their businesses... in the context of Indian companies only.If you have something to share/add/suggest, you can email me at harish.palaniappan @ Email from Google and I will find time to discuss with you and add your information and experiences in this blog as well.Information On Companies, Acts, and processes in IndiaMay be these links help to kick-off your information collection drive:Starting your own business in IndiaForming a company in IndiaStarting a business - by doingbusiness.orgThe Indian Ministry of company affairs websiteStarting a business in singaporeMCA21 : Online company registrations and other e-form processesThe Indian ministry of company affairs has setup an online governance website since september 2006 (delayed by almost 6 months) with the help of Tata consultancy services.* Note: Before you read further, understand that this post is not updated regularly when the ministry of companies of india's policies or processes change.. so you should look at this as a starter only.. and do find for yourself more information at the Registrar Of Companies offices around India.. or in the mca21 website.Types of companies:In the different types of companies that can be registered (or that can be created in India at all legally), there's no possibility of starting a single person company.. At a minimum, you can only start a private firm with 2 directors.But, the government has been recommended by an expert committee, to add a new class of companies which is proposed as 'One person company' and probably may have OPC Pvt. or OPC Pvt. Ltd. as the ending name of the company.If this recommendation is approved (which probably will be by amendments in the companies Act), then there will be a possibility of registering One Person companies in India. As of now, you atleast make a friendly legal entity as a director apart from yourself, like your mother or wife, or some friend, and register your company as a Private company with minimum 2 directors.Though it is technically bad that India hasn't still recognized 'one person companies', practically it is better to register as a private company since that will avoid further paper work when your 'one person company' grows to have employees which then requires a conversion in your registration or possibly re-registration.-- continuted --If you are a small enterpreneur, as it happens always, and probably into Software solutions, planning to be a product-based company, or services-based company, thinking of selling your software products / services within India or abroad, then registering your company as a Private firm with 2 directors would do. But this would allow you only to do business within the country. For legally allowing yourself to attract foreign currency through sales or service costs, all you need is an Import/Export number/code (costs somewhere less than 2000 rupees i heard...this number you will quote later while filing your filing your returns.. for foreign currency revenues)...but registering as a private company seems to be the first job to do.To register a private company:1. You can do everything onlineDoing the process online means, you download forms, fill them up digitally using adobe acrobat reader software, attach your digital signature and submit it in submission page on Ministry of Corporate Affairs The website says it will give you service request number for every such submission and you can track status of application online with that number. Also, if a form is rejected and if it is put in 'resubmit with proper information' or something like that, then without additional cost you can refill and resubmit under the same request number.1. Get DSC (digital signature):For all this you need a digital signature. Since there is no paper involved you can only sign digitally.. and only legal and secure method is through digital signatures which are given unique to every person who buys one.Note that the digital signature has nothing to do with your manual signature, it is some very very long and undetectable code provided to you as a file through email or in a thumb drive like storage media.And yes, keep the file or DSC media safe once you buy, because anybody can just steal this file and attach your digital signature to all documents that accept digital signatures (which is only company incorporation or name change or efiling forms today.. but later many other processes in life, for example filing company returns, also might start being computerized and accepting digital signatures)You buy DSC from Digital Ceritifying Authorities in India like MTNL (delhi and mumbai), TCS(all over india), and otherslisted here.While visiting the above websites you will see that there are different classes of digital signatures, and might be confused on which one to buy. The one that is minimum required for our discussion is 'Class 2 individual' or higher classes but something that is for an 'individual'. It is worthy to note here that, 'Class 1 certificate for individuals' which is a basic type of dignital certificate, is for 'individuals' but this DSC is not given based on proof of identity or proof of address.. so the government may not accept 'Class 1 certificates'.Recommedation: Buy a 'Class 2 individual' certificate.2. Get DIN (Directory Identification number):This is probably the only low cost process in incorporation. It costs 100 rupees to get yourself registered as a director (or going-to-be-director) of some company within india.Seems like anybody can apply for a DIN, provided you have any of these.. driving license/passport/elector ID, which is a valid proof of identity, and proof of address.The step-by-step process of getting a DIN is given hereRemember to get a DIN for your mom / wife / partner also if you plan to ask them be the second director of your small company.MCA User RegistrationTo submit forms, on the MCA website, you need an identity on the website.For now, since you may not have a DIN and DSC, you can register as an individual, using the 'New user registration' link on Ministry of Corporate Affairs . Then you can login with your password just like in yahoo mail or hotmail.After you get a DIN and DSC, re-register as a Business professional, using the same link.. and then on you will use your DSC to login to the website.3. Form 1A - Company name availability and blocking.This application is for blocking the name of the company you want to register.All forms that we are talking about in this or other steps are available hereBefore you download and fillup form 1A, you should check whether your company name is available through this pageFill up form 1A, with 2 DINs, affix your DSC, if you have to attach any documents scan them and attach them as files in the end of the form as applicable. Then submit the form. Note your request number and track the form until it is approved. We are almost half done.The above 3 items are the main items and all or most processes below can be done simultaneously.4. Role CheckThis is a simple process where a DIN and DSC are matched and verified to be of the same person, and also that this person is a valid signatory of the company.I am not sure, but this process might be neccessary only for efiling of tax or returns.. not for incorporation..Details about this step is here. http://mca.gov.in/MinistryWebsite/dca/rolecheck/rolecheck.html5. Form 1 - Incorporation Application:Download Form 1, fillup, attach digital sign and submit.6. Form 18 - Office address formDownload Form 18, fillup, attach digital sign and submit.7. Form 32 - DIN appointmentDownload Form 32, fillup, attach digital sign and submit.Steps 5, 6, 7 constitute the main parts... and if the Forms 1, 18 and 32 are approved, you will get a CIN or company identification number which you should quote alongwith your Company's PAN number (apply for one, if you don't have), in all future forms like tax forms, name change or address change forms.The overall cost of registering a private company with 2 DIN's through online mode, could cost as less as 2500 Rupees.. but this estimate can increase based on your capital investment which you will mention in Form 1A and others.As mentioned earlier,All forms are available hereAll process applications should take only a few days to be processed.All above processes might not have their old manual form filing methods sooner and everything will become digital because the ministry of company affairs is overwhelmed by its data, and is strongly being computerized. Already tax forms I think, are no more accepted in paper and government has recruited filing officers who help those who are not able to use a computer and do the process digitally.All above processes are part of a system called MCA21 and is managed and authorized for use by the ministry of company affairs and all its registrar of companies (RoC) offices.Initially, me and my friend hired a consultant for doing my friend's company's Registration(/Incorporation).Though this consulting company does it through Ministry of Corporate Affairs website only, they put in their experience of dealing with government processes.But, yes, you don't need to hire a consultant if you have the time to do it online, and if you know people who can attest your proof of identities (a gazetted officer), and if you know some lawyer who has authority to notarize with his signature anything that you produce on a stamp paper.Our consultant, was an authorized 'Company secretary'. It seems Ministry of Company affairs (MCA) has training and certifications for 'company secretary', which people take up and get authorized/certified (by the govt.) to provide these services to people. Company secretaries are obviously people authorized to do more than just incorporation.. like handling disputes between directors of companies, handling buyouts of companies, and many other things like that.. which require people with legal and indian acts and policy knowledge to do it.For us, our consultant would take care of verifying all documents, getting them attested, getting any legal papers notarized, and submit them through Ministry of Corporate AffairsCertain processes are easy.. and you can go to a consultant after these processes and save a few thousands in fee.For example, if you are a techie, and understand browsing and related technologies, then you are actually better than the consultant for getting your digital signature... and this one thing itself could save you more than 500 rupees. because I understand consultants cost 700 - 1500 rupees for filing your DSC application itself.Digital Signature:Just apply for a digital signature as mentioned above.. in TCS or MTNL websites.They will ask you to send some documents to a verification authority.The verification company will just verify your id proof and address proof and send you a digital signature kit with an eToken.An eToken is a protected pen drive/flash drive/usb drive, in which you can't do any data transfer but it will have your digital signature in it and when you insert it into any PC usb key, it installs the signature on the machine...not everything.. just the general part of it. you have to keep the key on the machine until you sign documents and remove it after.This kit and the digital signature costs 1,200 rupees for two years of validity.. (cost from TCS)If you apply from your machine, yourself, you will pay 1200 to the verification authority. nothing else. But if you use a consultant, he will do the online part also for you (assuming you are not the tech friendly person) and charge you twice or even more than the actual cost.Form 1A, and DIN application:These two forms are the initial steps, and probably easy steps for incorporation.Form 1A:Ministry Approval of Form 1A that you submit, means your company name and location is approved and you can start incorporation process. The name is valid only for 6 months and you should incorporate within 6 months.. or you can renew the name for another 6 months. The cost is a flat price of 500 rupees payable on http://Ministry of Corporate Affairs through credit card.If you are starting a software company, Form 1A will have no problems.. since the ministry won't question your address of manufacturing. Other businesses might have problems if the ministry feels your address is a residential area and you business is not proper to be there.. or things like that.In Form 1A, you have to give 6 or 7 company name choices.You type names... likeSample solutions Pvt., Ltd.,Sample software solutions Pvt., Ltd.,Sample Pvt., Ltd.,One of it gets approved.Director Identification Number (DIN):In India, to incorporate a company you need minimum two directors.. (yes, the law is outdated, and only recently government is considering recommedations that single person companies should be allowed to register)If you don't have another director, pull some friend you like.. or easier, get your mother or father as another director. So, atleast two directors should apply for and get a DIN to register the company under them. Later you can always change your directors, company name, address, anything.. just by submitting that form or application alone...and ofcourse paying for that change alone.If you are two or more people who will be directors, and if all of you have a valid passport, no other proof is required for submitting to government anywhere in the full process. A valid passport stands proof for name, address, and father's name most of the time... and the company affairs ministry seems to approve all applications with passport as proof for people, very smoothly.You don't need a consultant for submitting DIN if you follow the instructions clearly on the DIN pages that the ministry has.I think on Digital signature, and DIN .. ministry's website is clear.. and process itself is clear and easy to do by anybody who has used software like browsers, adobe acrobat, etc.,After two DIN's get approved, you can use the DINs and DSC of one director to apply for the actual, main, important form .. FORM 1. .. so this is why the first form we submitted was called FORM 1A (I was wondering why isn't called form 1 if its the first step in incorporation)For Form 1, we need the following.1. Form 1A approval (approving the name of the company)2. DIN numbers of directors (minimum two directors for pvt. ltd. company)3. Articles of Association (a stamped paper agreement signed by directors stating their claims of part ownership of company, has all about holding of shares, how they could be sold, how they could be bought back, blah blah..)4. Memorandum of Association (again a stamped paper document signed by directors stating what all are the objectives of the business, what all they want to sell/buy/resell/import etc., through the operations in the business, what all rights they will exercise in doing the business like renting space/real estate, having employees, etc., blah blah.. important part will be statement of objectives of business.. its like asking for incorporation only to do business on these lines.. if the operations or objectives change, you have to change the memorandum and resubmit for approval until which you can't do the new business)5. Form 18 stating the address of registered office of the company. (a simple form)6. Form 32 stating the DIN numbers of directors of the company. (a simple form)Sample word document templates for 3. and 4. can be downloaded from here (3) and here (4).Before you download, check up whether the ministry website has latest template of these files downloadable there.. as of this writing the ministry website hasn't put a link since this is a legal document and obviously it is a very important step which needs complete understanding by the person before signing it. The links above are provided only for you to have access to samples so you can read in detail before you get into doing it. Also, if you get to read, the 'Memorandum document (4)' read the 'objects' part carefully, because it says what you want to do with your business and you know this better than your consultant.Submitting Form 1 means, submitting all the above.In submitting Form1, you will need a consultant or help with the text from a Chartered Accountant, or company secretaries, or simply referrence documents from friends who have already done this.That's if.. you submit Form 1 digitally scanned and signed with the digital signature of one of the directors, through Ministry of Corporate Affairs... originals also have to be submitted to the registrar of companies.While submitting Form 1, you have to pay a registration fee which is based on a slab for the capital you are mentioning.. minimum capital is 1,00,000 rupees.. I mentioned just that, and the fee was 4,800 rupees for that.. (so that means it takes a minimum of 4800 rupees for registering a private limited company in India, not like I thought earlier that it could be done with around 2500 rupees).Government generally approves Form 1 submission in 1 day after the originals are submitted.Sometimes if the objectives of business stated in the memorandum is not clear / the AOA (3) or MOA (4) documents have mistakes / incomplete, then the registrar office raises a query or asks for deletion of objectionable points, or asks clarifications.. and the form has to be resubmitted if changes are made.. and I believe you don't have to pay again for corrections but I am not sure. For this part, probably being proactive, my consultant took a power of attorney from me and my mom for doing such changes himself, if they are raised, and to resubmit the memorandum himself without signatures from the directors (me or my mom).Once, your Form 1 is approved, within a day or two you will receive an email with a one page pdf certificate of incorporation(unsigned) with a Company Identification Number (CIN).. probably they will send an original signed one later which I am yet to receive.Actually, you should start business transactions, only after you receive this certificate.. though it happens usually that everybody does registration or incorporation a couple of years after starting business.Import / Export Code - IEC:After Registering the company, a software solutions provider, who wants to be able to provide services to foreign clients, or sell products online to people outside India, MUST apply for an Import/Export license.Bank account:For getting IEC, you need to have a current account in a bank under your new registered company's name. The bank will obviously ask your documents of company registration. Other than that, the bank will ask you a 'Board Resolution' from your company, signed by all registered directors of the company, authorizing one or more of the directors of the company to open and operate the account in the company's name. The board resolution is just a letter/statement from the people who represent the company, but some banks like it in a specific format and you can ask the bank to give you the board resolution format if they have. Some banks even have this format downloadable on their websites 'corporate banking' sections.The current account, will also be useful for you to do transactions in your company's name, which is a MUST for accounting your company's cash flows. Also, you will be able to accept payment from your clients in the name of your company through Cheques, direct wire transfer, etc., which clients will like since they will understand that your company is a permanent entity, and you are not somebody who takes money and can go missing.IEC application process is simple:You get an application form from the Zonal director general of Foreign Trade.. or download from their website (like their Tamilnadu/Chennai office website).Major attachments to this process are:1. your company registration form,2. a letter from your bank attesting that a current account is held under your company's name operated by one of the director's of the company, and the bank should attest in the letter the photographs of the directors of the company.The zonal director's office will guide and help you in the application process by rejecting the application with corrections mentioned clearly for you to correct and re-submit, each time you do it.Some consultants take close to 3000 rupees to do the IEC process.. my recommendation Do it yourself if you have not done this before, you will like to know and be clear of what is happening.

There are many websites now who are offering US company registration for around $500 and get you registered in Delaware for the business.Delaware has established a reputation around the world as the best and most business-friendly state in which to incorporate. More than 65 percent of all Fortune 500 companies and more than half of all U.S. publicly-traded companies are incorporated in the state of Delaware.Types of Business Entities a Foreign National Can Choose FromCorporation (C-Corp)Limited Liability Company (LLC)Would suggest starting an LLC since there are many advantages over a Corporation. Some of these advantages include:Pass through taxation will help you avoid the double taxation of business profits.Greatly reduced State Regulations and formalities compared to a corporation.A previous advantage of a corporation known as Corporate income splitting, is also now available to LLCs. An LLC must elect to be treated as a corporation for tax purposes by the IRS by filing form 8832. This is really only useful when the LLC is making sufficient profit that it can pay its members and still retain a significant chunk of it for reinvestment in the LLC.Steps to Form Your LLCSelect a StateThink about what State you want to start your LLC. You may already have a location in mind since that is where your customers are. If you primarily intend to conduct business from your own country then the (international-friendly) States to start an LLC include Delaware, Wyoming, or Nevada. The State Offices and Banks of these three States are very familiar in dealing with Non-US Citizens.Name your LLCChoose a Registered AgentIf you are starting an LLC in the US from your home country and will not have a physical address in the US that will be open normal business hours, we suggest you hire a Registered Agent Service. They will receive and forward all official mailings to you, such papers include service of process of legal action, and state filings.File the Articles of Organization with the StateCreate an Operating AgreementSteps after LLC FormationObtain an EIN (Employee Identification Number)Getting an EIN will grant you access to:Opening a US bank accountAccepting US paymentsPaying US TaxesRegister for State TaxA Non-US resident is taxed on US source income onlyA US Resident is taxed on worldwide incomeObtain Business Licenses & PermitsHire EmployeesGet InsuranceGetting an EIN (Enables your Company to open a Bank Account or Hire Employees)An EIN (Employer Identification Number) is the tax identity of your LLC, it is necessary to open a bank account, hire employees, and pay State Taxes. You will also be required to provide your EIN to other companies to receive payments exceeding $600 in a calendar year. Obtaining an EIN from the IRS (Internal Revenue Service) for your Company is easy and, the IRS does not charge you any fee to issue your LLC with an EIN. You can only apply for the EIN after forming the LLC.Download the SS-4 Instructions and SS-4 FormRead the instructions carefully while filling out the formNOTE Line 7b: If you don’t have a US Social Security Number, ITIN, or EIN just put “N/A Foreign” on line 7b.Fax form to designated number provided on the form, be sure to give the IRS a number to fax your EIN back to.An ITIN (Individual Tax Identity Number) or US social security number is not necessary to obtain an EIN for your company if the above process is used.There are lots of online services that you can use to form an LLC for you (they essentially just complete the paperwork for you). Many include additional packages to obtain an EIN, but be aware, while they can form the LLC for you, they will NOT be able to obtain an EIN, as they assume you have a US social security number or ITIN, which most likely you will not.More on forming a company : How to Open a Company in the USAUS Physical AddressYou need a physical US address for receiving business documents. There are several mail service forwarding providers charging different rates.My choice was Virtualpostmail.com – a web 2.0 company who seemed to be miles ahead of others in what seems to be a very traditional industry. I chose the $20 plan.They scan mails and send you an email; you can choose emails that needs to be opened and the contents scanned or just forward those mails to any other international address.Before you can operate your account, you need to submit a notarized form 1583 from USPS to authorize Virtual Post mail to open mails on your (and your companies behalf).US Bank AccountYou need a Business checking account with a US bank. If you already have a personal bank account with a US bank you can try calling them to open a business checking account. I think this is the best option. I tried calling Wells Fargo and the person on the phone told me that I cannot open a bank account with Wells Fargo and that I had to physically go to Delaware and try opening it from Wachovia. I am sure this person was wrong and I think it should be possible with Wells Fargo. I love the bank but somehow could not get my business account opened there.If you do not have a US bank account but if you are visiting USA in the near future, you can just walk in to a bank with the incorporation documents of your company and open an account.I posted a question regarding this in Quora and a very nice gentleman who was an advisor to many startups contacted me and referred me to Silicon Valley Bank (who are considered very startup friendly) and I was able to open the account from India itself.Initially I found it amusing that I was asked to pitch my business idea or send a presentation of my business plan in order to open a business checking account. But I guess Silicon Valley bank offers so many other services to startups but our needs were pretty simple. But SVB has been great till now in terms of responsive support.Merchant AccountThe most popular alternatives are Paypal and US Home - Authorize.Net (they have many resellers). You can go to FeeFighters (Note: They were acquired by Groupon in 2013) to compare providers and choose one that works for you. I skipped the options provided by FeeFighters and went directly with Braintree Payment solutions even though they were slightly more expensive compared to others as I had read good things about them and I did not understand all the hidden fees etc.Braintree provides me a merchant account, a payment gateway, a PCI compliant vault to store customer Credit card data and can process recurring subscription billing.We thought we will worry about the fees when we are making millions of dollars and losing considerable money on feesBusiness Credit CardI applied for a mastercard credit card through Silicon Valley Bank – the card is secured with a money market account – basically secured with cash in my bank account.US Phone NumbersWe have a free Google Voice number and a Skype number which is $50 per year. The Google Voice number forwards the calls to our Skype number.We are considering 1-800 numbers from Grasshopper after we launch.We also got an iPevo skype phone for receiving Skype calls wirelessly, but the phone has stopped working and I am too busy to send it to the US and return it to Amazon.Business Leads, Development & Starting UpResearch about technology trends in the industry and based on which create your services niche meaning what they are looking for provide as your service be specialized in that particular area and grow your database of talent pool around the region or globe as you prefer to do the business.You need to find a person or an agency could be your advisory on hiring the business development professionals through a reference and once that person is in you can have him interview people in your company for rest of the roles.People play important role in shaping, growing and taking organizations to next steps so you need to make sure who is coming in so that you dont have to worry once they are in they are doing what they should be doing.You will need at least 6 people to kick start your staffing agency and follow is the break down.2X BDM : Who can focus on marketing your services and client attraction3X Recruiters : Who can find resumes on the requirement that BDM brings from clients1X Accountant: Who will be responsible for book keeping AR/AP, invoices, billing and etcThe above could be multiplied by groups and teams.After registering your company go for creating the website with a good name which could be a blend of staffing + technology through website service provider like go daddy and etc.Hire a content writer to write your area of interest in terms of services you want to provide for clients in Information Technology.RegardsSyed AiyazI help people in the staffing industry in terms of finding recruitment jobs globally specially in India, USA & Middle East, Recruitment training And even setting up a staffing firm and making it up and running through my knowledge and experience in the industry.THESTAFFINGCIRCLEAdvertise - Split - PartnerBest YouTube channel for US staffing, IT recruiting, sourcing tools, , software reviews , career mgt, Social Media recruiting & More. 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