Micro, Small and Medium Enterprise (MSME) is undeniably backbone of the Indian economy. For socio and economic development, MSME contributes greatly.
MSME registration is essential to avail all the benefits or advantages that the ministry of Micro, Small and Medium Enterprise has announced under MSMED act.
MSME is basically classified under two categories i.e. manufacturing and service group. For MSME registration, you can simply visit their website https://msme.gov.in/online-application and fill the application form while attaching all the required documents. Otherwise, for MSME registration in India, you can also get in touch with the experts of Consult Avenue for quick and hassle-free registration of your enterprise.
Further, there is a registration procedure that every enterprise owner has to adhere to. Let’s have a quick look at it!
Step 1 – The applicants are required to complete their MSME registration form firstly. All the required details have to be filled in the form and then, submit all the documents as asked.
Step 2 – Now, the documents have to be prepared for MSME registration. The procedure takes 1 to 2 working days to proceed further.
Step 3 – Then, you have to post the documents that you have prepared for MSME registration to the registrar. All your documents will be verified in detail by the experts, which will further take minimum of 2 working days.
Step 4 – Once all the documents are verified and approved by the ministry, then your enterprise will be registered and necessary documents will be sent at your address!
Now, coming to the Eligibility criteria for MSME registration. It is essential to know the eligibility criteria before you proceed into the entire registration process. Let’s take a quick look now!
- As MSME is classified under two categories, one is Manufacturing and other is the Service sector. Therefore, for both the sectors there is a specific eligibility criterion that needs to be fulfilled.
- For the Manufacturing sector, their investment plan in plant and machinery should be less than 10 crores.
- For the Service sector, MSME should have plant and machinery investment less than 5 crores.
So, this is the eligibility criteria for MSME registration for both the manufacturing and service industry.
Advantages of MSME Registration
Once you register your enterprise as MSME, then there are certain advantages that will help you out further in business operations and development.
Let us step ahead to know what are the significant advantages of MSME registration that you must know about!
- Exemption on Income Tax
Do you know that after MSME registration you can get the benefit of income tax exemption? Well, yes, once you register your enterprise as an MSME after fulfilling all the criteria, you can take advantage of the presumptive basis of taxation, which is ultimately beneficial in maintaining those accounting books and managing the auditing procedure. With the help of MSME registration certificate, you can save lakhs of the amount that may be chargeable in the form of tax.
- Great Credit and Low Interest Rates
Usually, what happens is whenever MSMEs approach banks for the loans, then due to the absence of collateral security, they find it hard to avail the loan. Maybe some of the enterprise owners must have dealt with this situation too, isn’t it?
With MSME registration, one of the greatest advantages is that you can now easily avail a loan along with the benefit of lower interest rates than the usual. Moreover, one can get the benefit of finance from different financing institutions.
- Priority Lending
Do you know what’s the biggest advantage of MSME registration? Well, it’s Priority lending! Once you get your enterprise registered as an MSME, then you can take the advantage of priority lending, which simply means you are entitled to credit or loan on a priority basis and without any delay or hassle.
According to the RBI announcements and instructions, banks have certain earmarked funds that they have to mandatorily provide it to the MSME owners only.
Therefore, if you still haven’t registered your enterprise, then you definitely need to get that to get the benefit of PRIORITY LENDING!
- Infrastructure Development Capital
MSME sector is continuously coming up with new and innovative ventures, which is supporting the government in a potential manner. As a result, the government understands the requirements of the MSME sector, thus came up with capital grants for the infrastructure improvement and entrepreneurial development. Government is equally taking initiative for the MSMEs and coming up with beneficial policies and schemes!
- Credit Linked Guarantee Scheme
Small Industries Development Bank of India (SIDBI) has announced a credit guarantee fund trust for all the MSMEs. In this credit linked guarantee scheme, the enterprise owner can easily avail for the credit up to 50 lakhs, specifically for the individual MSMEs. Further, in this credit linked scheme for the micro, small and medium enterprises, a collateral-free loan is offered with minimum documentations!
- ISO Certification Reimbursement
The Ministry of Micro, small and medium enterprises has also announced ISO certification reimbursement for the MSMEs. Under this scheme, the business owner of a registered MSME can avail the benefit of 75% of the certification expenses reimbursement. So, you can avail the maximum amount from the incurred expenses on obtaining the ISO certification.
- Protection against Delayed Payments
As an MSME owner, you must have dealt with the delayed payments, isn’t it? Then, here is what you need to do! Register your enterprise as an MSME and get protection against the delayed payments!
If your MSME is a registered company providing goods and services to the buyers, then it is essential for the buyers to make the required payments on time. In case, there is no agreed date between the buyer and the MSME, also then, within the 15 days of acceptance of goods and services, the buyer has to buy the amount. Otherwise, there is a penalty charge against the buyer to pay it to the MSME registered company.
Hence, MSME registration is beneficial in protecting your delayed payments too, which also ensures that they don’t have any outstanding debts!
- Technological Upgradation
You know as a registered MSME, you can easily get the benefit of sophisticated and advanced technology! How? Well, if your enterprise is registered as an MSME, then you can utilize the full potential or skills that you and your team possess. Of course, due to the lack of advanced and cutting-edge technology, you couldn’t utilize it earlier. However, now it’s quite easy and quick to do! The government launched a capital aid for technological upgradation scheme, which is beneficial in providing the equipment in latest technology! At low-interest rates, you can avail this technological upgradation scheme.
- Patent Registration Subsidy
MSMEs are undoubtedly innovative and always come up with some new business models. And, if your MSME has created a new business model, then obviously, patent registration is what you opt for further, right? Well, do you know that now you can easily avail the patent registration at 50% subsidy! Of course, it is good news for all those aspiring business entrepreneurs to invent and innovate in their industry. So, if you still haven’t’ registered your MSME, it is the right time to do and avail the benefits government is offering.
- Interest on Overdraft Exemption
If you are willing to avail the overdraft facility, then you must also know that MSMEs have to benefit to avail at an advantage of 1% exemption. However, it important to maintain good relations with the banking staff and equally important is credit history. If all the requirements are fulfilled, then it is easy for all the MSMEs to avail the overdraft facility.
- Reservation Policy
MSMEs are hardly affected by the outsiders and that’s the reason, they grow out to be successful in majorly all the sectors! The most important thing to consider is the reservation policy of the government, which is formulated for the MSMEs that benefit them in their success.
There are some MSMEs who has been offered with an exclusive right to manufacture certain products and then, the government has kept the purchase of more than 300 products from this sector only! Ultimately, such reservation policies are beneficial in expanding the MSMEs and their market!
So now, you must be aware of the MSME Registration process, eligibility criteria and how MSME registration is beneficial! Whether it is a monetary or non-monetary benefit, the government has taken several strict measures in recent times to develop the MSME sector exponentially.
If you are willing to get your MSME registered, then the easy and quick way out is to contact the experts as they make the entire process from documentation to form submission simplified! For company registration in Delhi, the experienced and trusted team of Consult Avenue is there to help!