Econ. Ministry: No legal requirement for registration of home-based enterprises

Registrar of Companies, Mariyam Visam. (File Photo/Sun/Mohamed Muzain Nazim)

Economic Ministry clarified on Wednesday that there is no legal requirement for home-based enterprises operated for personal livelihood to register as business enterprises.

Health Protection Agency (HPA) has recently instructed for foodservice providers to obtain necessary permits in accordance with the regulation on hygiene standards for foodservice and other relevant regulations. It also instructed all foodservice providers to register with Health Ministry, and warned that it will take action against unregistered foodservice providers.

The instructions were met with criticism from members of the general public, many of whom have started home-based food enterprises as a source of income amid the economic constraints during the ongoing coronavirus pandemic.

In a statement on Wednesday, Economic Ministry said that Article 9 (a) of Business Registration Act declares that certain activities carried out for personal livelihood are exempt from being required to be registered as businesses.

“As such, among activities carried out for personal livelihood, trade in goods on own domestic premises or exercise of a profession or professional service on own domestic premises or delivered from one place to another, does not require registration as businesses,” said Economic Ministry in its statement.

Article 9 (b) states that activities carried out in person and without the employment of any other persons will be deemed to be carried out for personal livelihood.

Economic Ministry said that based on the exemptions declared on Business Registration Act, home-based workers and/or self-employed workers may engage in home-based enterprises on temporary or permanent basis for personal livelihood.

Article 7 of Business Registration Act states the types of activities which are required to be registered as; every form of trade or commerce carried on for the purposes of gain, any craftsmanship carried on for the purposes of profit, any calling or profession carried on for the purposes of profit, provision of any services carried on for the purposes of profit, transfer of ownership rights pertaining to immovable property, carried on for the purposes of financial gain, and any other activity carried on for the purposes of financial gain.

Economic Ministry acknowledged that many have taken to starting up home-based enterprises due to the negative impact on income amid the ongoing coronavirus pandemic, and said that it welcomed such enterprises.

Economic Ministry also stated that home-based enterprises that wish to expand by registering as an entrepreneurship, company, partnership or corporate society will receive necessary support from Economic Ministry and Business Center Corporation.

Economic Ministry said that foodservices carried out for profit as declared under Article 4 (a) of Regulation on Hygiene Standards for Foodservices must be registered under the Business Registration Act.

While home-based enterprises operated for personal livelihood are not required to register, they have been urged to adhere to HPA’s food hygiene standards.

Those who require further information regarding business-related laws and regulations may contact Economic Ministry’s call center at 1691.