Business

Starting a small business to tide through the pandemic? Here’s what you need to know

Businesses across the globe have been reeling from the effects of the COVID pandemic. While many were forced to permanently shut down or temporarily close, few managed to battle the odds by immediately shifting their businesses online. In India, Delhi and Maharashtra were seen as the most active in terms of e-commerce, according to the India Census 2014 conducted by eBay.

With stores closing their premises for several days, switching to online platforms allowed businesses the opportunity to work from home and conduct their affairs without needing to step out of their four walls. In Maharashtra, the cities of Nashik, Mumbai, Pune, Dindori, and Nagpur were found to be the top 5 e-commerce hubs witnessing a major surge in the number of people engaging in online transactions.

How did people survive through the first wave of the pandemic?

Individuals having small, medium, and micro-businesses were able to stay alive by switching their businesses online. Catering services and food outlets managed to thrive as they provided home deliveries and were permitted to remain open during curfews.

Today, although the pandemic seems to be waning, it has not disappeared entirely, so individuals who have started or are looking to start small businesses to sustain themselves will need to register their business first.

As of May 2021, the Udyam Registration portal saw the registration of around 30,00,822 MSMEs. Earlier known as the MSME Registration, people can now register their small, micro, and medium businesses online without any hassle. The Udyog Aadhar Registration is also an option to consider and can be done by all businesses that fulfill the criteria laid down under the MSME Act 2006.

What documents are necessary for a Udyog Aadhar Registration?

Among the many initiatives of the Indian government to sustain small businesses, the Udyog Aadhar registration is one of the most recent. Starting as a government registration process that provides the applicant with a registration certificate for their business, it also gives them a unique ‘Udyog Aadhar’ number. Geared more towards SMEs, this initiative provides people with greater access to government schemes to help the business survive.

All proprietorships in Maharashtra need to provide their Aadhar card to obtain the Udyog Aadhar Registration along with the applicant’s email ID and mobile number.

The form can easily be filled online by visiting the government’s MSME website. This

self-declaration form will ask for details about your business, business activities, employment and ownership, and bank details along with self-attested certificates, where needed. After submitting this form, you will receive a registration number along with your Udyog Aadhar Number (UAN) of the company.

Who falls under the MSME category?

Micro businesses, that is, those that have invested less than one crore in their machinery and the plant and who do not obtain a turnover beyond five crores along with medium and small businesses would come under this category.

For an enterprise to be considered a small-scale enterprise, the investment in the plant should be less than ten crores, and the overall turnover of the business should not exceed fifty crore    rupees. Medium enterprises refer to enterprises having a turnover of less than two hundred and fifty crore rupees, where the investment in equipment and the plant does not exceed fifty crores.

Getting your MSME registered might not be compulsory, but in doing so, you will get access to numerous schemes, incentives, and subsidies including loans at very low interest rates and tax rebates.

It is important to understand that the MSME and Udyog Aadhar registration are not the same. The Udyog Aadhar is simply an easier way to acquire the MSME registration. Applying for your MSME

registration after you’ve received your 12-digit Udyog Aadhar Number will be easier. However, it is recommended that people starting small, micro or medium businesses go in for both – the MSME and Udyog Aadhar registration.

What should food businesses keep in mind?

To stay alive, many who were laid off or lost their jobs began turning to food-making to sustain themselves and their families. Catering services, food carts with curated menus began spreading across online portals at the peak of the pandemic. While food has become a profitable and useful alternative business for many, some rules need to be kept in mind to ensure public health and safety.

The Food Safety and Standards Authority of India (FSSAI) was created to put these supervisory mechanisms in place. Every Food Business Organisation must go in for this certification. Being entirely online, businesses can initiate this process without any physical interaction with the licensing authorities.

To get a food licence in Maharashtra, applicants can avail themselves of the Maharashtra FSSAI. To obtain an FSSAI license, all FBOs need to consider two things:

  • Turnover
  • Installed capacity

What is the process of applying for a license?

To apply for a new license, the process is fairly simple. Applicants need to fill in ‘Form-B’ and attach the following documents along with it at the time of submission:

  • A blueprint showing the dimensions of the manufacturing/ processing unit
  • List of machinery and equipment installed
  • Complete details of Partners/ Directors/ Proprietors or Trust
  • Proof of possession of premises
  • Address proof of the applicant along with photo ID
  • Affidavit or Proprietorship Deed
  • NOCs from local body

These are just some of the documents needed. The fee for registering for a new license can be anywhere between INR 2000/- to INR 5000/- annually. On the other hand, the fee for renewal or request for a duplicate license would vary. The former is based on the number of years and the latter is ten percent of the applicable license fee. Depending on the situation, there needs to be a regular FSSAI renewal process so that the licences can be used from one term to another.

Although people have taken up all kinds of jobs to stay afloat during these difficult times, it is the movement to e-business models that have largely helped businesses survive. That does not mean shirking away from the required licensing and registration process. So those starting MSMEs or food businesses should get the proper paperwork in place so that in case this pandemic does not wind down anytime soon, you still have legal and properly registered businesses that you can now rely on as an alternative source of income.

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