Registration of Small Business in India | Type of business and Benefits

A Beginner’s Guide: Registration of Small Business in India

Registration of Small Business in India is completely is a method to get them under the legal benefits provided by the Government. However, it is not necessary or compulsory for the small businesses to register themselves and is a voluntary step. The small businesses in India are registered under the Commissioner of Industries/ District Industries Centre/State Directorates. In India there are 8 types of business entities that can be set up. These are namely; One Person Company, Non-Banking Financial Corporations, Sole Proprietorship Company, Limited Liability Partnership, Private Limited Company, Public Limited Company, Co-Operative Organizations and Joint Hindu Family Business. The very first step to start a small business and registering it starts with choosing the right type of business organization as per the needs. 

Process for Registration of Small Business in India:

In India the process of registering small business has a step by step guide in which each and every point is important and necessary to follow. Every business type attracts a different set of steps while registering themselves but certain steps are common to all types of businesses. For specific licenses in India there are different Government authorities. The steps are:

  • Obtaining the Digital Signature.
  • Obtaining the Director Identification Number.
  • Securing a name for the company.
  • Drafting the Memorandum of Association (MoA) and Articles of Association (AoA).
  • Filing INC-29 for obtaining the Incorporation Certificate.
  • Obtaining Permanent Account Number (PAN).
  • Opening a current account.
  • Obtaining MSME Udyog Aadhaar Registration.
  • Applying for TAN.
  • Getting service tax registration.
  • Getting license under Shops and Establishments Act.
  • Getting GST registration.
  • Obtaining Professional Tax Registration.
  • Registering with Employee’s Provident Fund if the business has more than 20 employees.
  • Registering with State Employee’s Insurance Corporation.
  • Getting Importer Exporter Code (IEC) Registration.
  • Registering with custom duty.
  • Obtaining Intellectual Property Registration.
  • Applying for AGMARK in case of agricultural based businesses.
  • No Objection Certificate from Pollution Control Board.
  • Obtaining FSSAI Registration in case of food related business start-ups.

Documents required during Application of Registration of Small Business in India:

Here is a list of documents that are required while application for registering the small business-

  • Clearance certificate from the Pollution Control Board.
  • A No issue certificate from the respective municipal corporation in the area.
  • Clearance certificate from the electricity board in the area.
  • If it is a partnership business then, a copy of the partnership business.
  • In case of private business, copy of the Memorandum of Association and Articles of Association and other legal documents.
  • Ownership or tenancy rights of the place where the business is to be established.
  • Purchase bills of all the installed machineries and raw materials to start the business.
  • Sale bills of all the products and materials manufactured or provided by the business in India.
  • Proof of existence of the small business in India through an affidavit stating its machinery installed, power requirements, nature and everything.

Benefits of Registering the Small Business in India:

  • The small business gets a legal identity.
  • It can claim against any mistreat or infringements.
  • They get ISO-9000 certification reimbursement.
  • They get benefits of reduced custom duties.
  • Exemption from certain taxation laws.
  • They get capital subsidies.
  • They get subsidies on power consumption tariffs.
  • They get benefits of credit guarantee scheme.

They get priorities in lending sectors as well.

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    Author: Anil Agrawal
    EZYBIZ India Consulting LLP, New Delhi. The firm is business and tax consultancy firm providing consultancy in Taxation, Regulatory, Transfer pricing, Valuation, Corporate funding and Business set up matters. He may be reached at 9899217778 or anil@ezybizindia.in.