How to Open Small Business in India?
Small businesses are the most important aspect of the indian economy. As per the report of MSME, there are over 36 million small business in india providing employment to over 80 million persons.
Small Business Ideas-
You can strat small business as a service or manufacturing units. As per the ministry of micro, small and medium enterprises any service sector unit with the investment in equipment of not more than 2 crore falls under small business. In the manufacturing sector any unit with an investment in plant and machinery of less then 5 crores falls under small business.
Before choosing small business ideas to implement you need to consider following requirements-
- Market opportunity
- Investment requirement
- Entrepreneur experience
- Business objective
- Raw material requirement
- Staffing requirement
- Business entity
- Business license required
- Taxation
- Break-even point
- Financial projections
Business Entity-
Most of the businesses in india are started as proprietorship or partnership due to the ease of compliances. However to afford limited liability protection and creation of a registered entity the Govt. Of India has introduced limited liability partnership in india. So those small business who is having turnover of more than 10 lakh a year can start LLP to enjoy additional benefits.
LLP does not require an audit if the annual sales turnover is less than 40 lakhs and capital contribution is less than 25 lakhs .
Tax Registration-
Once business registration has been obtained then you need to get various tax registrations. Here are few tax registrations required by a small business-
Pan Card:- Pan card is the first thing a business needs to obtain after the registration. As it required for opening bank account and doing various financial transactions in india.
TAN Registration:- TAN is required for those businesses required to deduct tax at source, also known as TDS.
Service Tax Registration:- It is required for any business that provides more than 9 lakhs of taxable services in a financial year.
VAT Registration:- VAT registration is required for any business that sells goods and products. It is controlled by the state government. Hence the process and requirement for VAT registration varies from state to state.
Business Registration-
In addition to the tax registration a small business can get one or more of the business registration from the following when the need arises:
Udhyog Adhar:- Udyog Aadhar has been introduced by the Government in lieu of MSME registration to make the process for registration of small businesses easy. Udyog Aadhaar registration can be obtained by the small business to avail various schemes promoted by the Government aimed at small businesses.
Trademark Registration:- Trademark registration helps a business to protect their brand name. It is important for small business to obtain trademark registration and protect the brand from competitors or future litigations.
Import Export Code Registration:- IEC registration is required for business involved in the import and export of goods from india.
ESIC Registration:- It is necessary for small business once they employ more than 20 employees.