How to Start a Micro Business in India? And Process to register a Micro Business in India

It is vital, to begin with, tiny steps while constructing something large. No firm can grow or become enormous overnight; it must always begin as a tiny business or startup and eventually grow into a giant company in the market. This blog will aid you with some very basic procedures that a business owner must carefully follow in order to become a great business tycoon. There is information on how to start a Micro business in India, as well as what a Micro business is, and the documentation needed to start a small business is mentioned.

Introduction

The Indian economy relies heavily on small enterprises. According to the MSME report, India has over 36 million small companies that employ over 80 million people. Small enterprises account for over 8% of GDP, 45% of overall industrial production, and 40% of India’s exports. Small enterprises make a significant contribution to India’s economy, and the government supports them through a variety of subsidy schemes and initiatives.

What is Micro Business?

A micro enterprise is a small firm that sells goods and/or services in a specific geographic area or market. It normally employs less than ten people and is geographically limited. A Micro Business usually starts with some type of funding, such as micro credit or micro finance.

Micro Businesses are typically associated with developing countries and economies, such as India. There is a labor shortage in the formal sector, and Micro-Firms are attempting to fill the void. They benefit the economy by not just producing jobs, but also by cutting manufacturing costs, rising purchasing power, and facilitating transactions. Such businesses also have the potential for long-term success. They contribute to the filling of a critical gap in developing economies.

Objective of a Micro Business

• In India, micro Enterprise aids in the creation of large-scale employment. Micro-enterprises try to provide good jobs to job seekers with low resources and investment.

• Micro Enterprise has many important goals, one of which is to stimulate trade and industry in economically depressed areas. As a result, it contributes to the growth of the economy.

• Micro Enterprises aid in the integration of backward areas into national development plans. They want to promote regional growth.

• The image above depicts women selling food to get money, which is a type of micro business. They can either work in the industry or start their own company.

• Micro Businesses aid in efficiently filling the gap in underdeveloped economies. It aids in the better mobilization of India’s abundant natural resources.

• Micro-Enterprise serves to improve the living standards of all citizens, regardless of where they live or work.

• It is becoming more difficult for micro-enterprise enterprises to maintain a positive reputation as advanced technologies emerge. The Indian government has already made a number of efforts to make it easier for micro businesses to conduct business.

Advantages of Micro Business

Business entity for “How to Start a Micro Business in India?”

Because of the ease of compliance, the majority of small enterprises in India begin as partnerships or sole proprietorships. The Government of India, however, introduced Limited Liability Partnerships in India in 2008 through the Limited Liability Partnership Act, 2008, to provide limited liability protection and the creation of a registered organization. As a result, Micro-Businesses with an annual turnover of more than Rs.10 lakhs can form an LLP.

If the annual sales turnover is less than INR 40 lakhs and the capital contribution is less than INR 25 lakhs, a Limited Liability Partnership does not require an audit, making it a suitable entity for small enterprises with less compliance obligations. A Private Limited Company can be formed if a small business’s capital investment in equipment or machinery is expected to reach INR 25 lakhs, or if the company’s annual sales turnover is expected to surpass INR 40 lakhs.

Related read: Start an Online Business from Home

Process to Register a Micro Business in India 

• Trademark Registration

A small business’s identity and advertising investment can be protected by trademark registration. Because of the low cost of advertising through channels such as social media, the internet, and other channels, small businesses can now actively compete against larger businesses. As a result, it is critical for all small businesses to obtain a trademark registration and protect their brand from competitors or future litigation.

• ESIC Registration

Once a small business employs more than 20 people, it must register with the ESIC. ESIC registration could assist a small business in making better hiring decisions and providing greater benefits to its employees.

• Udyog Aadhar Registration 

The government has implemented Udyog Aadhaar in place of MSME registration to make the process of registering small enterprises easier. Small businesses can obtain Udyog Aadhaar registration to take advantage of numerous government-sponsored initiatives focused on small businesses.

Registration Process for “How to Start a Micro Business in India?”

• Click on the new entrepreneur or EM-II for MSME Registration on the government portal.

• Insert Aadhar information and click on Validate and generate OTP option.

• Once the above step is completed, Information on the PAN verification page is generated.

• All the necessary information needs to be mentioned by the owner on this page.

• The portal obtains PAN information from government databases and verifies the entrepreneur’s PAN.

• The Udyam Registration form will appear after the PAN has been verified, and the entrepreneurs must fill in their information as well as the details of the plant or enterprise.

• Click on submit and get OTP,  message for successful registration will be appear

• The Udyam Registration Certificate is issued when the MSME registration form is verified, which may take a few days.

Information on Tax Registration

• Businesses that are required to deduct tax at source, often known as TDS, must have a TAN. TAN can be obtained once a small firm is required by law to deduct tax when making a payment.

• PAN is one of the first registrations that any small business should have after registering, as it is essential to open a bank account and conduct other financial operations in India. The Proprietor’s PAN Card is utilized in the case of a Proprietorship Firm. A different PAN is given for various entities such as a Partnership Firm, Limited Liability Partnership, Private Limited Company, One Person Company, and others.

• Any business that offers more than INR 9 lakhs in taxable services in a financial year must register for service tax. Once the yearly taxable services revenue surpasses INR 10 lakhs, the business must collect and remit service tax from customers.

Conclusion

Small businesses and startups, as well as online firms, are the responsibility of India’s MSME Ministry. MSME has offices in each of India’s states as well as seven Union Territories. MSMEs are governed by the ministry’s licensing, regulations, and rules. It develops and implements a variety of plans and initiatives aimed at fostering entrepreneurship. This ministry routinely announces schemes such as giving financing on favorable terms to aspiring businesses.