MSME Registration – Advantages, Government Schemes and Documentation for MSME Registration Process

0
386

Latest News:

Considering the present situation the government has planned to suspend the section 7, 9 and 10 of insolvency and bankruptcy code for 6 months. FM Nirmala sitharaman also announced that the threshold for default under IBC is raised to Rs. 1 crore from Rs. 10 Lakh earlier. This step has been taken in consideration to prevent the triggering of IVC for MSMEs. The government has also announced that no additional charges will be applicable on late filing of documents that are required to be filled on the MCA21 during lock down period. This will reduce the company’s burden including financial burden of the company and limited liability partnerships.

 

What are Micro, Small & Medium Enterprises ?

In India, which is still in the developing phase,  Micro, Small and Medium Enterprises known as MSME forms the backbone of the business economy. The MSME sector is contributing a great share in India’s Total Industrial Employment i.e. 45%. The share of MSME in Total exports is 95% manufacturing more than 6000 products per year. The development and growth of these industries directly impact the country’s growth and GDP. The overall growth of the company depends on the success of these MSME industries. The industry is also widely known as SSI (small-scale industries).

The registrations for both manufacturing company or the service company can be attained through the MSME act. Although MSME registration is not mandatory by the government of India. But the MSME can have many benefits after registration. For example benefits in taxation, business set up, credit facilities, loans etc. The concept of MSME came into existence on October 02 2006, to promote and help the micro, small & medium enterprises grow and flourish.

Categorisation of MSME

Micro, Small & Medium Enterprises are categorised on the basis of investment in plant and manufacturing in two categories:

  • Manufacturing Enterprise
  • Service Enterprise 

Micro

Small

Medium

Manufacturing Rs. 25 Lakhs Less than Rs. 50 Lakh Less than 1 crore 
Service Less than Rs. 10 Lakh Less than Rs. 20 Lakh Less than Rs. 50 Lakh

 

Process of MSME Registration:

  • Micro, small & medium scale industry owner has to fill the online or offline form to attain the MSME registration certificate
  • A person can have the individual registration also even if he wants to register more than one industry
  • MSME registration can be done on the government websites by filling a single form
  • The documents of identity proof, address proof are required for the registration process such as Aadhar card, industry certification, bank account details, address proof and other details
  • Self-certified products are acceptable MSME registration form
  • Government portal does not require any payment in the form of MSME registration fees
  • In the MSME registration online process, once the complete details are filled and uploaded a registration number is provided for further reference

Advantages of Registering MSME

MSME registration certificate is beneficial in getting the bank loans at a much cheaper rate of interest i.e. 1-1.5% which allows the MSME owners to gain higher profits with appropriate investments at a lower rate of interest. 

  • MSME after registration also enjoys many Tax rebates
  • Credit limit of MAT (Minimum Alternate Tax) is extended to 15 years 
  • The MSME owner can file the government tender specifically open for MSMEs
  • MSME can easily get credit
  • The cost of having Patent and industry set up is reduced due to the available rebates and concessions 
  • MSME enjoys higher preference in all government certificates
  • The one-time settlement fee is the biggest advantage for MSMEs

Document for MSME registration

The entity has to submit the below-mentioned documents for small scale industries registration

Business Address Proof

If the property is owned by the owner himself then the allotment letter, possession letter or tax receipt is acceptable. In case of municipal license in the name of the business or the proprietor, then no other official document will be required. The municipal license itself is sufficient. 

If the property is rented, then a NOC (No Objection Certificate) from the owner and the rent receipt has to be submitted. Also, the bills like electricity or water bill providing the authority proof of the landlord will be a valid submission.

Sale Bill & Purchase Bill

It is very important to submit the sale bill for the end product that the company will be selling. Submitting a purchase bill for raw materials that the company will purchase is mandatory for small scale industries registration.

Partnership Deed/ any other certificate

Depending on the nature of the business, partnership deed or the registration certificated is mandatory to be submitted.

The company has to submit a copy of the Memorandum, Articles of the Association etc. Along with this, the certificate authorizing the signatory of the MSME registration application also need to be submitted.

Bills & license of purchased machinery

In some areas, the business needs to attain an industrial license from the Government of India and submit a copy of the same.  All the receipts and bills of sale and purchase of machinery have to be submitted as & when required.

MSME schemes under the Government of India

Udyog Aadhaar Memorandum

Aadhar card number is a 12 digit unique code given to every individual. The benefit of registering under this scheme applies to get credits, loans and subsidies from the government. MSME registration online or offline, both can be done. 

Zero Defect Zero Effect

To ensure the 100% export quality of goods Government has launched this scheme. The goods that are exported from India which receives no rejection and are not sent back to India are covered under this scheme. The 100% quality assured goods enjoy some extra rebates and concession.

Quality Management Standards & Quality technology tools

The MSME registered under this scheme can understand the quality standards better and can easily adhere to the standards to deliver quality products as per the new technologies. The government organize activities like seminars, campaigns etc. to make the businesses aware of the new technologies.

Grievance Monitoring System

Grievance means issues, therefore as the name suggests the business registered under Grievance Monitoring System can launch complaints and check the status also. 

Incubation

This scheme of Government promotes new ideas, products & designs and help the MSMEs in implementation. The MSME can also get the benefits in terms of finances as 75% to 80% can be financed from the government. 

Women Entrepreneurship

Specially designed for women who are willing to start their own business. The government assist the women and provides finance, counselling, training and other innovative techniques to help them build their business. The government also supports the women on expand their business across boundaries. 

In addition to the above listed, the Government also has many more schemes for MSME registration.

 

LEAVE A REPLY

Please enter your comment!
Please enter your name here