If you are thinking to start a business, you are in for a world of surprises. Mostly good ones. You are coming across an opportune time in your life. But there are just a few things you need to comply with to unlock your full potential. One such thing that the government mandates for new business is the MSME registration.
What is an MSME?
MSME is an acronym for Micro, Small and Medium Enterprises. The MSME classification is based on the investment cap for that enterprise and the machinery or equipment in use by it. For a Manufacturing enterprise, the investment criteria for each of these is as follows:
Micro- <Rs. 10 lakhs
Small- <Rs. 2 Cr
Medium- <Rs. 5 Cr
The above are the limits set on each of these categories. Any business that starts out as either micro, small or medium has the burden of growth with the added burden of not exceeding these limits as that will make the benefits availed by them null and void. Therefore, many industry leaders have come out in protest and demanded a more dynamic classification that aids scalability and growth.
MSME Registration Process:
The process for registration for MSME is easy. It follows these 9 basic steps. (The complete detailed process for registration for those looking to register is mentioned further in this blog):
· Registration is available through both, an online government portal and offline financial institutions.
· Registration for Aadhar number is a prerequisite for MSME registration.
· Applications can be filed online using the Udyog Aadhaar Registration.
· An enterprise is granted provisional registration for 5 years or 60 months.
· The Ministry of MSMEs issues a provisional MSME registration.
· Verification can be done with the e-Aadhaar OTP.
· Through this provisional registration loans and NOCs can be easily obtained.
· After commencing business, now owners can apply for a permanent MSME licence.
A permanent licence with a lifetime validity can now be availed. Although this is subject to cancellation. There you have it, the extremely easy process of MSME registration. But as a disclaimer, you must know that having all your documents in place is important.
Documents required for MSME registration.
· Address proof of the business
· Copy of the sales and purchase bill book
· Receipts and bills for purchase of equipment or machinery
· Copy of the Industrial Licence
· Aadhaar Number
· PAN card
· Bank Account Number
· IFSC Code
· NIC Code
· Employee data if applicable
· Number of Employees
· Commencement date for Business
· Details of partnership in case of a partnership firm
· GSTIN certificate
· Unregistered Partnership firm: Partnership deed
· Registered Partnership firm: Registration certificate
· Memorandum of Association (MoA)
· Articles of Association (ADA)
· Certificate of Incorporation
· Copy of the resolution passed in general meeting of the company.
· Copy of board resolution with an authorization from a director to sign and apply for the MSME application.
Who is Eligible to Apply for MSME Registration?
Here are the enterprises that can apply for MSME Registration:
· Micro Enterprises in the Manufacturing or Service industry with a capital investment in plant, machinery, or equipment of Rs. 25,00,000 and Rs. 10,00,000 respectively.
· Small Enterprises in the Manufacturing or Service industry with a capital investment in plant, machinery, or equipment of Rs. 50,000,000 and Rs. 20,000,000 respectively.
· Medium Enterprises in the Manufacturing or Service industry with a capital investment in plant, machinery, or equipment of Rs. 100,000,000 and Rs. 50,000,000 respectively.
MSME registration benefits:
Here are a few of the benefits that enterprises can avail by getting MSME SSI Registration:
· Special Schemes: The Government of India launches various schemes to promote and support MSME Enterprises from time to time. Some of the popular schemes include Udyog Aadhaar Memorandum, Women Entrepreneurship and Zero Defect Zero Effect among others.
· Tax Benefits: Registered MSME Enterprises can easily avail tax rebates and capital gains subsidies. These enterprises are allowed credit for Minimum Alternate Tax (MAT) to be carried forward for up to 15 years.
· MSME-only Tenders, Licenses and Certifications: Certain new tenders from the Government of India are only open to enterprises in the MSME category. These enterprises are also given preference for many government licenses and certifications.
· Cheap Bank Loans: After registration, MSME enterprises can get bank loans at a lower interest rate than the prevailing market rate. Recently, the Government of India and SIDBI
· launched a Credit Guarantee Scheme to offer collateral-free credit to these enterprises.
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Published by Dev