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- Consultation on MSME Registration
- File application for MSME Registration
- MSME Registration Certificate
MSME stands for micro, small and medium enterprises and any enterprise that falls under any of these three categories. MSME enterprises are the backbone of any economy and are an engine of economic growth, promoting equitable development for all. Therefore, to support and promote MSMEs, the Government of India through various subsidies, schemes and incentives promote MSMEs through the MSMED Act. To avail the benefits under the MSMED Act from Central or State Government and the Banking Sector, MSME Registration is required.
Micro, Small and Medium sized enterprises in both the manufacturing and service sector can obtain MSME Registration under the MSMED Act. Though the MSME registration is not statutory, it is beneficial for business at it provides a range of benefits such as eligibility for lower rates of interest, excise exemption scheme, tax subsidies, power tariff subsidies, capital investment subsidies and other support. IndiaFilings can help your business obtain MSME Registration to avail a host of benefits. For promoting entrepreneurship, the government provides special benefits to the small businesses in the form of subsidies and incentives.
Also, banks give loans at concessional rates to set up these businesses. For availing those, the small businesses need to register under Micro, Small and Medium Enterprises (MSMEs) act. If a business is registered under MSMEs act, it can avail several benefits like cheaper bank loans, tax benefits, preference during the tender process, and access to various schemes and incentives of government. MSME stands for micro, small and medium enterprises and any enterprise that falls under any of these three categories. MSME enterprises are the backbone of any economy and are an engine of economic growth, promoting equitable development for all.
As per the rules & regulations, its registration requires filing of an application with the respective government department.
In application, an applicant has to provide the details of the industry they want to run along with the necessary details and documents:
Aadhaar Number of applicant
Details of an applicant such as name, gender, PAN number, email ID and mobile number
Details of Enterprise such as type of the organization, PAN of organization, location of setting up a plant, address of the organization, date of the commencement of the business, number of employees
Bank Account Number and IFSC Code
Primary Business Activity of the enterprise
NIC 2 Digit Code
BInvestment in Plant & Machinery / Equipment
MSME enterprises of manufacturing sector can be categorized on the basis of amount invested in plant and machinery –
- Micro enterprises –
When an importer has to clear his shipments from the customs then it’s needed by the customs authorities.Micro enterprises–
- Small enterprises –
Entities investing between 25 lakhs and 5 crores in plant and machinery
- Medium enterprises –
Entities investing between 5 crores and 10 crores in plant and machinery
- When an exporter receives money in foreign currency directly into his bank account then its required by the bank.
Entities investing between 5 crores and 10 crores in plant and machinery
- Micro enterprises
Entities investing less than 10 lakhs
- Small enterprises
Entities investing more than 10 lakhs but less than 2 crores
- Medium enterprises–
Entities investing 2 crores but less than 5 crores
- Easily avail Bank Loans
Once registration is done by the enterprises they can avail the benefit of bank loans. Banks offer collateral free loans even property is not pledge with the Banks. Government of India and SIDBI work directly to implement the schemes on the MSMEs.
- Ease in an opening bank account
Registration Certificate is a legal entity proof of the business therefore bank account can be easily opened and easily apply for any other license such as GST registration.
- International Trade Fairs Participation
In order to expand the business across the country or internationally, enterprises can participate in international/national trade fairs organized by the MSME Department.
- Octroi Benefits
Government provides benefit of the refund of the octroi imposed on the goods and services, however without MSME registration; enterprises have to pay the octroi on the goods and services.
- Waiving off Stamp Duty and Registration Charges
Prior to this, only such enterprises which expand their business in the IT Park or SEZ could avail the stamp duty benefits however now MSMEs can also avail these benefits.
- Exemption under the Income Tax
Enterprises which are working towards the improvement of society can take the income tax benefits in the initial years. Recently government has introduced some benefits under the startup India scheme.
- Reimbursement under the Bar Code Registration
Bar Code registration is required by the manufacturing units. Under this, one can avail the benefit of subsidy under the bar code registration.
- NSIC and Credit Rating
Through NSIC Performance, small enterprise can avail the subsidy benefits on various expenses.
- Industrial Promotion Subsidy
This subsidy is provided by the government to industrially promote the small enterprise.
- Protection in case of Delay
Under this, enterprises can file case against the buyer & dispute settlement in the short span of time.
- Capital Subsidy
To purchase the plan & machinery, all the enterprise get the 15% capital subsidy.
Whether you’re the proud owner of a cutting-edge technology business or a masala packing company, employing rural women, credit and loan are something that your business will inevitably require for long- and short-term financing. Banks, by virtue of the directions issued by the Reserve Bank of India, have certain earmarked funds that have to mandatorily be given to MSME businesses. Producing this certificate entitles one to avail this loan on a priority basis with less hassles.
- Income Tax exemption
There are several benefits that can save lakhs of amount that may be assessable to tax in the absence of this certificate. The benefit of a presumptive basis of taxation is available to enterprises, which relieves one from maintaining detailed books of accounts and undergoing audit procedures.
- Credit Linked Guarantee Scheme
The Ministry of Micro, Small and Medium Enterprises and the Small Industries Development Bank of India (SIDBI) have established a Trust named Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) specifically to implement Credit Guarantee Fund Scheme for micro and small enterprises. This scheme allows collateral-free loans of up to 50 lakhs for individual MSMEs.
- Reservation of Products to be produced by MSMEs only
Since the SSIs operate on a smaller scale, the Government makes sure that they do not die down due to the prevailing competition in the market. For this reason, it has reserved certain products that must be produced by the Micro, Small and Medium Enterprises only. Moreover, the Government stores are bound to purchase certain products like wooden furniture, jewelry, pickles, etc from these industries.
- No More Delayed Payment Troubles
The Government helps the MSMEs against buyers that do not pay on time. During the supply of goods and services, if there is a date that has been mentioned in the agreement between the MSMEs and the buyers, the payment is supposed to make on or before it. If no due date has been mentioned, the buyer has to initiate the payment within 15 days after the goods and services have been accepted. No payment, however, shall exceed forty-five days after the goods and services have been supplied. In case the buyers do not comply with these provisions, they have to pay the penalty due to the delay in payments. The MSME registration makes sure the needs of small entrepreneurs like you aren’t compromised.
- Reduced Fees for Trademark Registration
The MSME registration certificate can help you in trademark registration as well. It gives you the opportunity of having a 50% subsidy in the payment of fees while you’re registering for trademark or a patent.
Foreign Business Expo
The Government, helps the Micro, Small and Medium Enterprises in participating in foreign expo’s by providing financial assistance. This way, your export and import interests are well taken care of. MSME benefits like these motivate people to become entrepreneurs and run businesses successfully.
MSME stands for Micro, Small & Medium Enterprises which is defined under MSMED Act, 2006 on the basis of the investment made in plant & machinery and equipment.
It is always preferable to apply for MSME registration before starting the operations. It will help in obtaining clearance from the various government bodies.
When the PRC (Provisional Registration Certificate) is issued, it shall be valid for a period of 5 years. After the end of the 5 years, PRC shall lapse.
MSME registration is not mandatory but it is preferred to register under MSME to avail various government benefits such as subsidies and incentives.
Udyog Aadhar is an Aadhar for a business entity which is issued by the MSME department to the Micro, small and medium enterprises. It consists of 12 digit government identification number.
Banks recognize MSMEs. While granting a loan, MSMEs are always preferred over normal enterprises. Interest rates on bank loan are always low. Preferential treatment is always given to MSMEs in case of delay in repayment.
Original value of plant & machinery is considered while computing the value of Plant and Machinery for the purpose of MSME registration.
Credit rating describes the capability of an enterprise whether they are eligible to fulfill their financial needs on the basis of their past dealings. However, it is not mandatory to obtain but it is preferable for the MSE borrowers to obtain their credit rating. It will help them in taking a loan from the banks and financial institutions.