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The insurance industry is one of the largest industries in India. As per the Insurance Regulatory and Development Authority of India (IRDAI), India's insurance industry is predicted to reach $ 222 billion by 2026 and become the sixth-largest insurance market in the world, surpassing countries like South Korea, Germany, Canada and Italy.
Therefore, if you want to start a business in the insurance industry, now’s the time! Here are some useful tips and insights which can help you to start a business in the insurance industry easily.
If you want to start an insurance company successfully, you must form a business plan to achieve your goal. The business plan must consist of your financial goals and you must identify any industrial risks. You must create this plan keeping in mind your financial needs and resources required. Explain how you plan to get customers and all the insurance products and services you want to offer.
The foundation of building a new business is a business plan. It allows you to secure financing and start-up capital and choose your business location. This plan will be helpful for securing funding in future.
You must choose the legal structure for your insurance business. There are several structures which you can choose from: Sole Proprietorship, Partnership Firm, Limited Liability Partnership, Private Limited Company, Public Limited Company and One Person Company.
The simplest structure is sole proprietorship but with this type of business structure comes personal liability for all the debts and losses incurred by the company. LLP offers limited liability but it cannot launch an IPO for getting funds. Each and every structure has its pros and cons. You must consider all of them before making your decision.
You must gather all the necessary documents required for company registration in advance. Searching for all the documents at the last moment can be stressful. If you find out there’s a missing document which is crucial for company registration, it is suggested to apply for that document’s copy immediately.
Once all your documents are in place, it’s time to file an application with the Registrar of Companies (RoC). Make sure the application is attached with all the required documents and is free of errors or discrepancies. Seek help from a professional if you feel like you need assistance in the company registration process.
Once RoC has approved your application, it’ll grant you a certificate of incorporation. After this, it’s time to file an application with the Insurance Regulatory and Development Authority of India (IRDAI). Depending on the type of insurance company you want to set up, your application process and eligibility criteria will differ. For example, the application process and eligibility criteria for insurance marketing firms and stock broking companies are different. Once your application is filed with IRDAI and you have received the authority’s approval, you will be issued an IRDAI insurance license allowing you to operate your insurance business in India.
You must open a corporate bank account through which you can receive payments or make payments in the name of your company. You’ll have to make payments to the employees working under you through a business bank account. It’ll help you to stay compliant with the tax department. Bank statements are really important for ITR filing.
You must hire a team of professionals for your insurance company. Make sure they’re qualified for their post and have the enthusiasm and creativity it takes to lead your insurance company towards business growth. All the major job posts such as CEOs and CFOs must be filled by individuals who have the relevant work experience and skills. They’ll help you to form a business strategy for the smooth functioning of your insurance company.
While conducting your business, you must ensure compliance with regulatory requirements of IRDAI. Stay updated regarding the latest guidelines of IRDAI. Additionally, you must also ensure compliance with the income tax department and GST Council. If your business annual turnover exceeds the threshold limit of Rs. 10 lakhs, you must apply for GST Registration.
The insurance industry in India is a major industry. If you’re planning to start an insurance company, the tips and insights in this blog post will be helpful for you. Whether you want to start your own stock brokerage firm or insurance marketing firm, we will provide you with expert guidance and full assistance to make your entrepreneurial journey smooth! Get in touch with Registrationwala's insurance company registration consultants as soon as possible!
Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.
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