There was a time when India's economy was inspired by agriculture. Today, most of it is promoted through innovation, technology and products manufactured by micro, small and medium-sized businesses. The facility dives deeper to understand what these companies have to do and how to register for them. In the last century, India's growth story was driven by the creation of agricultural infrastructure and service industries, this century. In, it is the small innovative business infrastructure in the technology, manufacturing and services sector that is promoting economic growth and investment. To prevent business owners from taking risks in order to constitute themselves in an organized structure - whether micro, small or medium, the government has determined what is known as MSME registration. If you own an existing business or have a potential idea that can be developed, there are distinct advantages that MSME registration can provide.
MSME stands for Micro, Small and Medium Enterprises and any enterprise which falls under any of these three categories, which is considered MSME. They are the backbone of any economy and are the engines of economic growth promoting equal growth for all. Therefore, to support and promote MSMEs, the Government of India provides various subsidies, schemes and incentives through the MSMED Act. Registration is required under the MSMED Act to avail equal benefits from the central or state government and the banking sector. This registration is known as MSME registration.
Micro, small and medium-sized enterprises in both the manufacturing and service sectors can obtain MSME registration under the MSMED Act. Although MSME registration is not statutory, it is beneficial for business, it provides benefits such as low rates of interest, excise exemption schemes, tax subsidies, electricity duty subsidies, capital investment subsidies and eligibility for other assistance. India Filings can help your business obtain MSME registration to get a host of benefits.
Apart from micro, small and medium scale business entities, limited liability partnerships, private and one-man companies, proprietorship firms and public companies can also apply for registration under MSME. While small and medium are common terms, to decide the applicability of the MSMED Act, the government has set specific turnover and investment limits to ascertain whether an enterprise falls under the micro, small or medium category.
Benefits of MSME Registration
Benefits of MSME registration in India:
Enterprises that register themselves as an MSME can have many benefits ranging from loan options to cluster financing to adoption of the latest technology and quality management standard. Some of the key benefits include:
50% subsidy on patent registration: As an entrepreneur, you may be aware of the hefty fees that an enterprise must open in order to register a patent. Have you faced this type of issue? With MSME registration, patent registration will come to you at 50% grant. Protect your IP today and speed up your dream of becoming a famous corporation of tomorrow.
Collateral-free loans: An enterprise registered as MSME can enjoy collateral-free loan options that are facilitated through banks and NBFCs. Isn't it great to get a working capital loan or line of credit without putting some of your assets at stake?
Waiver of interest on overdraft: As a registered MSME, an enterprise can enjoy a discount of 1% on interest on an overdraft facility. Even a slight reduction in the cost of funds is extremely beneficial for small businesses and MSMEs are no different.
Reservation Policy: MSME is a labor-intensive group that generates a lot of employment and therefore has some special privileges from the government. The government has given MSMEs exclusive rights to manufacture certain products. Under the Government Stores Purchase Program, the Central Government has reserved around 300 products exclusively for the MSME sector.
Technological Upgradation for MSME: Under Capital Aid for Technological Upgradation Scheme, the government is enabling MSMEs to upgrade their equipment through latest technology. To do this, the government is encouraging more MSMEs to upgrade their technology and infrastructure and enable them to obtain low-interest loans from banks.
Protection against delayed payments: The biggest benefit of MSME registration is the protection received from the government for late payments. If an MSME supplies a product or provides a service, the buyer must pay on or before the payment date. If no date is mentioned, payment must be made within 15 days of acceptance of the product or service, failing that the buyer is required to pay a fine to the MSME registered company. This enables them to maintain free cash flow and keep bad debts to a minimum.
Documents required: While uploading the registration details, you have to keep the following documents - Bank details, PAN card, Aadhar card number of the applicant and its social category number