How to Setup Cupcake Business in India?

Narendra Kumar

16 Jan, 2021

Cupcake Business in India

Know more about the Legal Registration/ Compliance required Starting a Cupcake Business

In the last couple of decades, fast growth and progress have been seen in the cupcake business in India. With escalating demand for processed food in the country, the demand for baked goods has also seen a marked increase. As a result, a large number of bakeries have come up in a big way. People who initially start a small business from home are now ready to take the big leap and set up their cupcake business taking it to the new heights. Many entrepreneurs are making the most of the current environment in the country that is conducive to setting up a business.

Setting up a Cupcake Business

The primary advantage of setting up a cupcake business is that it doesn’t require substantial capital investment. Moreover, it doesn’t require a lot of human resources which makes it a perfect business option for homemakers. Let us discuss the process of setting up a cupcake business in India. First, you need to know that you can opt for any business model like Sole ownership, proprietorship, LLP, and Company. In an independent bakery or a partnership or proprietorship, you may need to get company business registration. It is seen that usually, such businesses fall into the unorganized category. If a bakery is being set us with many outlets or as a chain of bakeries, it needs to be set up as a limited company or a private limited company that helps them accessing various funding sources that are important to expanding the business.

Another option available to home-based bakery business is LLP or Limited Liability Partnership. If you are working from home and your business is too small, you can start with a one-person company or Limited Liability Partnership. Both options extend limited liability protection for the business promoters which is an essential aspect of any business related to food products.

Pre-requisites to Setting up a Business

There are specific licenses and registration that needs to be done before floating a business.

Also, Read: Major Difference Between Registration and License from FSSAI.

Food Safety and Standards Authority of India

If you are planning to set up a cupcake business, you need to apply for necessary licenses. The most important license when operating a food business is FSSAI. A substantial penalty can be laid by the FSSAI or Food Safety and Standards Authority of India^[1] if non-compliance with its rules is caught. Thus, it will not bode well if there is any contravention with FSSAI rules.

For any business involved in food products, it is mandatory to seek FSSAI or food business registration. This license is necessary to be obtained for any entity or person who is running a food processing, manufacturing, distributing or packaging business. A bakery can sell cupcakes only when it holds an FSSAI food business license. The FSSAI Registration allows them to sell bakery made cakes and cupcakes to retail chains. Not obtaining this license can result in heavy penalties of fine not more than Rs. 5 Lakh and six months imprisonment.

GST Registration

One also need to apply for GST Registration when setting up a bakery. Since GST is a state-specific tax, one needs to apply for the registration in the state where the business has been set up. In case, there are a lot of branches or outlets of the businesses spread over in other states; one needs to apply for GST Registration in all those states. GST seeks to streamline taxation in India which also aims at addressing a lot of ambiguities in the earlier taxation system.

Another registration that has to be obtained when operating a cupcake business is trademark registration. This registration not only helps in protecting the business or brand but also assist in creating a business’s unique identity.

After acquiring all these registrations and licenses, you can give wings to your business and let it soar high