MSME Registration
MSME stands for Micro, Small and Medium Enterprises. A country's actual economic growth is not just dependent on its large scale industries and multi- national organizations but also on its medium level industries and most importantly on its small scale businesses.
The Ministry of Micro Small and Medium Enterprises has provided a suitable name for Small Scale Business operations in India as Micro, Small and Medium Enterprises (MSME).
The Provisions related to MSME are provided in The Micro, Small and Medium Enterprises Development Act, 2006.
Entities which are eligible for Registration as MSME :
Any type of Entity like Proprietorship Firm, Partnership Firm, Association of Persons, HUF, Company, LLP and any other Business entity can Register as MSME.
Sectors of Business that can be registered as MSME :
MSME covers only manufacturing and service industries. Trading companies are not covered by the scheme.
The MSME model is introduced to support new business ideas by providing them with subsidies and benefits. Trading companies are considered to act just as middlemen, that provides a link between the manufacturer and the customer and hence not covered under the scheme.
Criteria for Consideration as Micro, Small or Medium Enterprise:
Section 7 of "MSMED Act" classifies the enterprises into micro, small and medium enterprises.
i) In the case of the manufacturing sector,
classification has been done on the basis of investment in plant and machinery
and
ii) in the case of the service sector,
classification has been done on the basis of investment in equipments.
Benefits of MSME Registration
- Bank Loans without any collateral security:
- Government of India has made collateral-free credit facilities available for all small and micro business sectors. This initiative guarantees funds to micro and small sector enterprises. Under this scheme, both the old as well as the new enterprises can claim the benefits.
50% Subsidy on Patent/Trademark Registration- 50% subsidy in payment of fee in case of patent registration or trademark registration has been given to the enterprises that has the certificate of registration as MSME.
Exemption of Interest Rate charged on Overdraft Limit- Businesses or enterprises registered under MSME can avail a benefit of up to 1% on the overdraft as mentioned in the scheme that differs from bank to bank.
- Protection against Delayed Payments
- The Micro, Small and Medium Enterprises Development Act, 2006 provides for the provisions to deal with the problem of delayed payment, whereby any buyer who fails to make payment to MSME supplier, as per agreed terms or within a maximum period of 45 days, would be liable to pay interest to MSME supplier.
In addition to this the Government of India has launched an online SAMADHAN portal (samadhan.msme.gov.in) on October 30, 2017 to enable micro and small enterprises to directly register their cases relating to delayed payments, online , on the portal.
Full Reimbursement for ISO Certification ChargesThe registered MSME enterprises can claim the full reimbursement of the expenses that were spent for the ISO certification.
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.
Udyog Aadhar Registration Benefits
- Once you are registered under the MSME, you become eligible for most of the government scheme regarding the fundings like
a) Without Guarantee Loan
b) Easy Loan
c) Low Interest Rate Loan
- Financial support from the government to participate in the foreign expo
- Credit prescription (Priority sector lending)
-
- Differential rates of interest etc
- Excise Exemption Scheme
- Exemption under Direct Tax Laws.
MSME Registration is Optional
MSME Registration is optional under the MSMED Act, but it opens the door to governmental schemes, tax and banking benefits, subsidies and schemes.
Registration Procedure
MSME registration has now been replaced with the Udyam Registration.
MSME registration is to be done in the government portal of udyamregistration.gov.in.
The registration of MSMEs can be done under the following two categories in the portal –
i) for new entrepreneurs who are not registered yet as MSME and
ii) for those having registration as EM-II or UAM and for those having registration as EM-II or UAM through Assisted filing.
This registration with MSME/Udyam Registration is completely online.
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