Since 2001, India saw the biggest upsurge in the field of start-ups and entrepreneurship adventures. Even to this date, the GDP of the country’s economy depends a lot on these smaller firms. India is one young nation, which is transforming into a bigger one these days. Even the government is all set up and ready to introduce some of the best beneficial schemes for supporting MSMEs to grow and exist swiftly.
Even the MSME Ministry is working strong to encourage all the smaller enterprises to engage in production and manufacturing sectors, and even in good processing and preservation category to realize that entrepreneurs don’t have to spend a hefty amount to get their business up and running.
Focusing on MSME after going through a better understanding:
The Indian government has crafted the MSMED or the Micro, Small and Medium Enterprises Development Act in the year 2006. As per the definition, the investment in machinery and plant for the micro should not exceed Rs.25 lakh, and the in service industry, the investment should not exceed Rs.10 lakh.
For the smaller companies, the investment in manufacturing and production industry should not exclude Rs.5 crore and for the service industry, it can be over 10 lakh rupees but not more than Rs.2 crore. Lastly, for the medium sized businesses, the investment in machinery and plant under production and manufacturing can be over 5 crore but not more than Rs.10 crore and for the service industry, it must not exceed Rs.10 crore as well.
Also Read: How to improve and maintain healthy Business Credit Score?
Registration and What’s needed:
Are you planning to register your new venture under MSME module? Then learning more about the MSME Registration and all it takes for this service is really important these days. It is defined to be one online procedure that needs your AADHAAR number for getting it certified. You can always avail the certificate online without going for the physical copy anymore.
- On the other hand, this process gets simplified further for the enterprises with MSME certificate already in hand to procure approvals, licenses and registrations in any business field from respective authorities.
- The process is so simple that they can easily produce certificate of MSME registration while trying to work out on the application itself.
- Not only that, but the applicants can even try to reimburse the ISO based certificate expenses while trying to make application to respective authority, as supported by the MSME certificates.
Reasons to get the MSME registration for the Indian companies:
If your MSME can get the registration covered, there are so many interesting benefits you will come up with. These benefits will include monetary and even non-monetary advantages associated with entrepreneurial and trade development.
- Whether you are associated with a cutting-edge technology or even a basic snacks company, asking for women labor, loan and credit is something that your business needs for short term and long term financing help. As per the directions from RBI, the Indian banks will have earmarked funds that have to be presented to the MSME businesses. So, if you can produce the registration certificate while asking for loan, your case will get a priority basis help with less messed up scenarios.
- MSME registration certificate will come up with less interest rate and availability and you get access to a greater credit. As there’s no question of collateral security with MSME firms, most of the business owners might find it really hard to secure loan from starting in industry. Thanks to MSME registration, banks are completely instructed to provide loads at interest rates lower than the usual one and might be able to avail benefit from various banking institutions for the financing needs.
- This field of MSME registration is important to focus on Income tax exemption. There are multiple benefits that will help you to save lakhs of money, which can be made assessable to tax in absence of such certification. This current benefit of presumptive taxation basis is meant for the enterprises. So, there’s no need to maintain detailed account books and undergoing some of the audit procedures.
- The ministry dealing with MSME firms and even the Small Industries Development Bank of India or SIDBI have actually worked out together to come with a trust. It is called the CGTMSE or the Small Industries Development Bank of India. The main purpose of this trust is actually to work on Credit Guarantee Fund Scheme, designed for smaller ad micro enterprises. This scheme will actually work on collateral-free loans, which are up to a mark of 50 lakh rupees for the individual MSME firms.
Also Read: What is Government Performance and Credit Rating Scheme for MSME?
Get market assistance from the government and export promotions:
The Indian government has actually organized multiple craft fairs, exchange program, trade-related events and exhibitions, some of which are taking place internationally. If your business gets categorized under MSME branch, you get access to all the available platforms, designed for international cooperation on the trade-based aspects with various countries.
This mean will surely help you to foster some of the major business connections. On the other hand, the Indian government is working hard to incentivize export of services and goods by MSMEs by focusing on proven legal norms and ways like technical support, subsidies and even tax exemptions.
Dealing with capital and even grants:
You can always enjoy not just capital but other grants too, designed for infrastructure development. As MSME is defined as a sector for generating employment and even providing entrepreneurial ventures that ultimate boost, the Indian government is not lagging behind to identify some of the chosen training sectors for MSME. Furthermore, MSME firms will receive capital grants for improvising the infrastructure and even supporting the idea of entrepreneurial development.
Working on other benefits:
Apart from the points mentioned already, there are some other benefits revolving around the world of MSME registration. So, if you think that the points mentioned above are the final call for Benefits of MSME Registration, then you might be wrong. There are some other features, which ensure that MSME registration is a perfect call for the start-up experts.
- You get the chance to reimburse ISO certification through MSME registration. For promising certifications and standards as procured by MSMEs to enhance their performance across multiple sectors, all the registered industries can procure exemption of all the financial help, incurred for procuring ISO 14001, ISO 9000 and HACCP Certifications.
- There will be quality and technology up-gradation support from Indian government towards MSME. For enhancing the cost-effectiveness and even promoting cleaner energy use in the field of manufacturing, the government will always reimburse the project costs towards such goals, especially designed for MSME sector units. The scheme will further cover the expenditure revolving around implementation of such cleaner technologies, subsidies for the licensing items and preparing audit reports as per the international and national standards.
- Moreover, you get the opportunity to procure exclusive purchases and even sheltering from the competition as well. Being a part of the Market Development Assistance program for MSME, the central government will follow Purchase and Price Preference policy. Under this policy, you get the liberty to list out over 358 items for some exclusive purchases by the Centralized government from these smaller, micro and medium units only.
Ways to get the MSME registration certificate:
The procedure associated with registering business has always been simplified by government by introducing the Udyog AADHAAR in 2015 for the current business units after the Indian PM made one speech about the need to provide one-page registration business forms. In place of filling up detailed forms of the Entrepreneur memorandum while registering for it, an owner of business can now easily register online through some of the quicker steps.
- Recent survey indicates that within the last 3 years, over 54 lakh registrations under Udyog AADHAAR Scheme got granted and registered. There you have some detailed information you need to work on for filling secured MSME registration through Udyog AADHAAR. Make sure to visit their official website now.
- Some of the information you need to provide are major activity under servicing or manufacturing category, employed persons, NEC or National Industrial Classification code, Investment in the field of machinery and plant for manufacturing units, location of either one plant or more, and investment in equipment under service sector area.
- There are some major documents, which you have to keep handy while planning to upload registration details. Learn about Facts of MSME Registration, to know more about the documents you need for that. Those documents you need are PAN card, bank details, applicant’s AADHAAR card number, social category number if any, previous registration details of the business if any, and date of business commencement.
- For refreshing the registration procedure, the Udyog AADHAAR plan as set up in 2015 will simplify this procedure of registering the MSME. As long you have the bank details, AADHAAR card and PAN card with you, the businesses can be registered online completely, by just filling up the required form on the official website.
The help you get with reservation policy:
Reservation policy happens to be one of the major benefits presented to enterprises in policy form under this noted sector. Just to ensure that MSME sector doesn’t get affected by the competitive market, India’s central government has provided exclusive manufacturing rights to some products in this sector only. Under the current Government Stores Purchase Program, already the Indian government has reserved purchase of over 300 items exclusively from this present sector.
Some of the examples to get covered under this section are wooden fixtures and furniture, ground nut and mustard nut oil, pickles, bangles, clutches for the automobile corporations, brakes, jute, breads and more.
The credit guarantees fund trust:
The smaller and micro sized enterprises can now easily avail a proper loan of around 50 lakh collateral feel loan right under this noted scheme. As the smaller and micro companies are mostly led forward by deprived and poor, RBI has taken this notion on its shoulder to direct banks to sanction the collateral or security free loans to such smaller enterprises.
So, if you run a small firm and want to carry it forward for bigger profits later, make sure to get it registered first under MSME of course! Once you have done that, benefits will start flowing towards your side.