How to Start Logistics Company in India?

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Any industry or business relies heavily on the flow of commodities. Seeds and insecticides, for example, are essential for farmers in the agricultural sector. As a result, they need the transportation of these items from the producer to their location. Manufacturers send their products to online retailers, where they are stored and delivered to customers. A logistics business is responsible for the transportation of these commodities. If you’re interested in learning how to get your own logistics firm up and running, this article is for you. In this article, you will understand how to start logistics company in India.

What does it mean to start logistics company in India?

Companies that store and transport the goods of others whether business or individual are known as logistics firms. Entrepreneurs have a wide range of options when it comes to starting a logistics company.

  • Cargo and courier services
  • Services for air freight
  • Service Providers of warehousing
  • Outsourcing of logistics (3PL)

Stepwise Process to start Logistics Company in India

Stepwise Process to start Logistics Company in India

tasks_2021_2xDecide the Business Model

Choosing a business model is the first step you’ll need to take. You have the option of starting your own business or acquiring a franchise. The advantages and disadvantages of each company’s strategy are distinct. For example, You can be more creative with the first option, while the second takes a smaller expenditure.

Here, you also need to make a list of all the services you want to offer. Packaging and offering barcodes through barcode registration might also be included in your service. Also, evaluate if you need a warehouse or if you can deliver final efficiency in small-scale services.

After deciding the business model, you will need to apply for Company Formation. The Company Formation can be any of the following

  1. Private Limited Company Registration 
  2. Partnership Firm Registration
  3. LLP Registration
  4. Sole Proprietorship Registration

tasks_2021_2xRaise the Capital 

The amount of money needed to start a firm depends on the services it aims to provide. For example, Freight Services provides a company that requires the lowest capital investment. However, Container Freight Station requires the most capital investment. Therefore, A sound investing strategy is required. You can also apply for business loan or raise funding through other business partners.

tasks_2021_2xRegister for Mandatory Compliances 

Before beginning any commercial activity, every type of company must do some mandatory registration or compliances to legally operate their business. To start logistics company in India, you need to apply for the following mandatory registrations.

  1. You must be registered with the International Air Transport Association (IATA) if you are a freight forwarder.
  2. The Air Cargo Agent Association of India (ACAAI) Registration.
  3. Companies must register with a variety of government agencies in India in order to do business legally. For example, they should have GST Registration and do GST Return Filing 
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tasks_2021_2xAnalyse the Risks and Apply for Government Schemes

Another factor to consider is the level of market risks. India’s logistics industry, which is heavily dependent on risk management, is a prime example of this. Furthermore, With so many suppliers and associates participating in the business’s overall operations, there is a very high possibility of a dispute.

Thus, You must protect yourself and your company by purchasing enough insurance coverage in the event that something goes wrong.

Cargo damage, theft, environmental damage, injury, etc. can generate major liability difficulties, while such company insurances can handle certain liability issues.

You can also apply for government schemes such as MSME Registration to avail benefits from the government and other financial institutions.

Important Things to keep in mind while Company Incorporation

  • Before registration, apply for the proposed company name.
  • Understand all the documentation needed to start a business, such as a Memorandum of Association (MOA), Articles of Association (AOA), and other legal documents.
  • Obtain necessary business licences and other registrations to conduct the business.

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