Small Business
Small businesses have become one major factor helping to boost the development of a developing economy like India. Due to this, the Government of India in association with different departments coming under it is taking various initiatives to support small businesses as such businesses are coming into the light and are aiding the development and nourishment of the economy. Thus, there are a series of reforms that are happening within the country that are helping small entities emerge and make the maximum benefit out of the city. They help in building infrastructure by the payment of taxes and are boosting employment opportunities increasing the same in the country.
The article is discussing the procedure of registration for small businesses in the country and what are the documents that are required for getting this registration done.
Key Takeaways
- The article is discussing the procedure of registration for small businesses in the country and what are the documents that are required for getting this registration done.
- But registering an entity as a small business shall help them avail various benefits provided by the Government of India along with its different departments.
- Thus, we can conclude that it shall always be beneficial to register an entity as a small business and avail all benefits which are made available to such businesses and entrepreneurs by the government and their allied departments.
Business Models apt for Small Businesses
Various reforms and programs are being introduced by the Government of India in association with its various departments. There are MSME schemes and other schemes introduced by the government which are making it easier to not just register but also conduct business in a developing economy like India. The business arena is expanding and the competition within the industry and the markets are also increasing with many new small firms coming into the market and opening themselves to this adventure. For this, there are certain business models which can be picked by these small entrepreneurs and these include:
- Sole proprietorship
- Partnership Firm
- A company that majorly includes a Private Limited Company
- MSME stands for Micro, Small, and Medium Enterprises.
Documents Required for Sole Proprietorship Registration Procedure
A sole proprietorship entity is one registered under the name of the proprietor of the business. He shall be the sole owner of the entity and hold the responsibility to conduct the administration as well as holding the power for decision-making. The documents which are required mandatorily for the small business registration as a sole proprietorship would include the following:
- Copy of Pan Card
- A copy of the Aadhar card
- A passport-size photograph
- The email ID and mobile number of the proprietor
- Proof of address for business premise or place of business in the form of rental agreement in case of rented place or electricity or water bill
- A copy of the bank statement of the proprietor.
Documents Required for Partnership Firm Registration Procedure
A partnership firm is where two or more two persons come into association by investing in the business and deciding to divide the profit or loss which is arising. The registration process of the partnership business is based on the discretion which is made of the partners. But it shall be highly recommended that the partners registered their partnership firm with the registrar of firms. The partners of the partnership firm are required to submit an application form duly filled with the Registrar of Firms of the state along with the payment of the prescribed fees. Documents that are compulsorily required for registering the partnership firm would include the following:
- Application to be made for registering as a partnership firm in Form 1
- A specimen affidavit
- The original copy of the Certified Partnership Deed of the firm
- Proof of address for the principal place from which the business is being conducted by the partnership firm in the form of the rental agreement, in case of a rented or leased place of business, or other ownership documents.
Once the Registrar gets satisfied with the documents which are submitted by the partnership firm, the Registrar shall issue the certificate of registration to such firm or partners.
Documents Required for a Pvt Ltd Company Registration Procedure
For registering a private limited company the entity should access the MCA or Ministry of Corporate Affairs and follow the registration procedure as prescribed. For this they should be having the following documents:
- A valid Digital Signature Certificate or DSC of the directors
- Along with other details which are mandatory like documents including a copy of PAN card, Aadhar card, and such other contact details of the directors as proposed
- Passport-size photographs of the directors of the company
- The consent is obtained from the directors to be appointed as directors along with details of their DIN or Director Identification Number to be furnished in form, namely Form-1
- A declaration to be made by the subscribers and directors of the company in the form, namely INC-9
- The application from the directors and subscribers of the memorandum for obtaining the DSC or digital signature certificate.
- The proof for the registered office from where the business of the entity is conducted shall include the rental agreement if leased or taken on rent, or such other ownership documents like registered title, document, or sale deed in the name of the company.
- A NOC or no objection certificate from the real owner of the business premises should also be obtained as approval in case of rented or leased office space.
- A copy of the resolution which is passed by the Board of Directors or such other formal authorization which is made by the board of directors for using the trademark of the company shall also be provided.
- A copy of the draft of the MoA or Memorandum of Association and AoA or Articles of Association along with the certificate of Incorporation shall be provided.
Documents Required for MSME Registration Procedure
For registering small businesses, such as MSMEs that are Micro, Small, and medium enterprises only Aadhaar numbers shall be required. They can take the registration under the Udyam Registration, which is an initiative taken by the Government of India. This is conducted with the help of fetching the documents furnished by the entity with GST and Income Tax Departments. The applicant for registration as MSME is not required to upload any documents and certificates while registering themselves as MSME. Registration of MSME can be divided into categories, namely:
- For new entrepreneurs
- For those entities who are already registered as EM-II or UAM Or assisted filing is provided for those with registration as EM-II or UAM
Certain documents are made necessary for the completion of the registration process and these would include:
- Aadhar card details
- The PAN card details of the entity or the proprietor, as the case may be
- The name and the other contact details of the applicants, say email ID and mobile number
- The account number owned by the entity along with the IFSC code
- Two-digit code in NIC
- The amount of investment made in plant and machinery by the entity
- The Memorandum of Association and Article of Association, if applicable
- Copies of the bills for purchase and sales.
Conclusion
Small business registration is not mandatory, but it is a voluntary and non-compulsory registration. But registering an entity as a small business shall help them avail various benefits provided by the Government of India along with its different departments. It can easily avail of funding and credit from banks and financial institutions at a lower rate of interest. They also get exemption from tax laws and also enjoy lower payment of customs duty, power tariff, and other capital subsidies, etc. Registration of such small businesses shall be availed under the State Directorate or Commissioner of the Industries or District Industries Centres. And this should be provided based on the consideration of the product and also the location of the small business or the small entity.
Thus, we can conclude that it shall always be beneficial to register an entity as a small business and avail all benefits which are made available to such businesses and entrepreneurs by the government and their allied departments.
