MSME (MICRO, SMALL, AND MEDIUM-SIZED ENTERPRISES) REGISTRATION

                              INTRODUCTION

The government of India introduced the MSMED Act in 2006 to promote competitiveness, productivity, and innovation among micro, small, and medium-sized businesses. The prescribed government organization offers an abundance of benefits in form of incentives to all MSMEs registered under the corporation. MSME Registered entities enjoy advantages such as power tariff subsidies, capital investment subsidies, exemption from excise and direct taxes, and many others. These enterprises also get an additional benefit from priority sector lending.

As per MSMED Act guidelines, an entity serving in the manufacturing sector or service sector can claim MSME certification only if the investment shelf (distinct for every enterprise) is not exceeded. Another point worth noting is that MSME Registration is not lawfully essential rather it is a voluntarily taken decision to enjoy a range of subsidies and schemes offered by the Indian government.

Also, the Government of India has defined and considered MSME / Small Scale Industries (SSI) / Udyog AADHAAR to be the same type of registrations for micro, small, or medium enterprises.

The MSME sector is one of the major sectors of the Indian economy and has made a major contribution to the country’s socio-economic development. There are approximately 6.3 crore MSMEs in India. Since the MSMEs are small-scale enterprises they have to face huge competition from the big companies. Therefore, the government has initiated various schemes to support these industries and encourage entrepreneurship and innovation among the MSMEs.

MSME DOCUMENTS REGISTRATION:

To be Submitted by Authorized Persons / Entities:

• AADHAAR number and PAN of the applicant, along with a valid Mobile Number / e-Mail (for verification)
• PAN Number is mandatory for Company, Limited Liability Partnership (LLP), or Cooperative Society forms of entities, however, it is optional for all other businesses.

Address Proof of Establishment (Either of Below)

• Sale Deed
• Rent Agreement (with landlord’s consent to carry out business on the rented property)

Bank Account Information

• Bank Statement (recent 3 months)
• Cancelled Cheque

National Industrial Classification (NIC) Code of the products and services the enterprises
deal
Additional Documents for Specific Cases:
Private Limited Company:
Memorandum and Articles of Association;

Form-32 and Form-18;
Certificate of Incorporation

Partnership Firm
Partnership Agreement / Deed

BENEFITS OF MSME REGISTRATION:

Collateral-Free Loans: Micro, Small, and Medium Enterprises can easily get collateral-free loans from various Banks and financial institutions. The unsecured loans borrowed by the MSMEs will be covered with guarantee covers from the government. Credit The Guarantee Fund Scheme for MSMEs is one such scheme to provide collateral-free loans to the MSMEs.

Subsidy on Patent Registration: Patent fees have been reduced for startups and small- scale businesses. The government provides reimbursement on the patent registration fees to the MSMEs under the scheme of Spreading Awareness of Intellectual Property Rights. The renewal fees for Patents have also been reduced by 60% for the MSMEs.

50% discount on Trademark: The government provides a 50% discount on the official fees for newly launched businesses and small-scale industries. Also, the registration fees for online Trademark registration are relatively cheaper than offline registration.

Interest Rate Exemption On Overdrafts: The MSMEs can get an overdraft facility of 1% on overdraft loans. Many Banks have initiated digitized services for quick and instant disbursement of overdraft loans. The Banks provide quick overdraft loans to the MSMEs based on the turnover reported in their GST returns.

Industrial Promotion Subsidy Eligibility: The companies that are registered under the
skin for micro, small, and medium enterprises can also apply for the subsidy that is
available for industrial promotion. This is provided by the government of India to help
the organizations under the MSME certificate.

Protection Against Delayed Payments: MSMEs can file complaints online if they do not receive the payment within the stipulated amount of time. The government departments/ agencies who do not make timely payments for the purchase of goods & services will be fined. The disputes related to payments will be resolved through the process of conciliation and arbitration.

Concession on Electricity Bills: The MSMEs gain concessions on electricity bills. The State Governments of India have initiated the schemes for the concession of power tariffs for the MSMEs in their respective states. The MSMEs with the registration under MSME can make the application to the electricity department and enjoy the concession on electricity bills.

Reimbursement on ISO Certification Charges: HACCP Certification Reimbursement The scheme is an incentive scheme initiated by the government to financially assist the MSMEs to reduce the cost of registration of ISO.

Subsidy on NSIC(National Small Industries Corporation) Performance and Credit Score: The MSMEs can get subsidies on NSIC registration fees under the Performance & Credit Rating Scheme. The NSIC Credit rating agency would help the MSMEs to know the creditworthiness of their company and encourage them to enhance their organizational strengths. The NSIC will help the MSMEs get credit for themselves based on their creditworthiness which is rated by reputed Credit Rating Agencies.

Marketing Support: The enterprises can get reimbursement on the registration fees of Barcode. Barcode is the latest & innovative technology for the unique identification of the products. The Government provides 75% reimbursement on fees on one-time registration of Barcode to financially assist the MSMEs and encourage marketing among them.

Easy access to GeM: GeM is a wide online marketplace for the public procurement of goods & services. The registered MSMEs can easily register themselves on this platform. The government authorities directly purchase the goods/ services on this platform.

Therefore, the MSMEs get good exposure to the market which also increases the sales
and customer value of the MSMEs.

Availability of government tenders: The registered enterprises can easily get the government tenders without having to pay the security money for the participation. The MSMEs are exempt from paying the security bid money.

Refund on ISO Certification: The government provides reimbursement on HACCP certification to the extent of 75% of expenditure subject to a maximum of Rs.75,000 in each case.

Technological and quality support: The government gives technological and quality support to the MSMEs to encourage them to implement Energy Efficient Technologies to reduce the cost of production and reduce the emission of Greenhouse Gases. The MSMEs will be provided subsidies on the purchase of assets.

Subsidy on Capital Requirements: Credit Linked Capital Subsidy Scheme (CLCSS) is a scheme initiated by the government to facilitate technological up-gradation support to the MSEs. The MSMEs will be provided with a 15% capital subsidy on institutional finance availed by them for upgrading their plant & machinery with state-of-the-art technology in the specified sub-sectors/ products approved under the scheme.

ZED Certification Scheme: The ZED (Zero Defect Zero Effect) Scheme was initiated to ensure proper awareness among the MSMEs about ZED manufacturing. This scheme aims to encourage MSMEs to manufacture eco-friendly and quality products that do not impact the environment. The enterprises will be given a ZED rating for the quality of products produced which in return would help them get credible recognition for the international investors to invest in their business.

DOCUMENTS REQUIRED:

The documentary obligations to be fulfilled to be registered as MSME, under the
prescribed Act are:

• Aadhar Card of the Applicant.
• Pan Card of the Applicant (if a proprietor); Company/Firm Pan Card (in case of Company/Firm).
• Bank Account Details
• Office and Plant Locations address and proof
• Articles of Association
• Memorandum of Association
• Bills of the equipment employed

The application for MSME registration is filed on the Ministry of Corporate Affairs website (MSME Registration Portal) in the prescribed format. The documents attached with the application are to be self-certified and uploaded. Upon acceptance of the application, a registered E-mail ID with Udyog Aadhar Number and Certificate of Registration will be provided. The registration can be done offline as well.

ELIGIBILITY FOR MSME REGISTRATION:

The following enterprises are eligible to obtain MSME registration:

1. Manufacturing Enterprises – The enterprises: Engaged in the manufacture or production of goods about any industry specified in the first schedule to the Industries (Development and Regulation) Act, 1951 or Employing plant and machinery in the process of value addition to the final product having a distinct name or character or use. A Manufacturing Enterprise will be classified into Micro, Small or Medium enterprise based on its investment in Plant & Machinery.

2. Service Enterprises: The enterprises engaged in providing or rendering services. A service enterprise will be classified into Micro, Small or Medium enterprises based on investment in equipment.

CONCLUSION:

The MSME sector is one of the major emerging sectors in India and has generated numerous job opportunities for the common masses of India. These industries lack funds because of their small-scale size. Therefore, the government provides support to these industries under various schemes. The MSME certificate helps you get numerous benefits such as capital subsidies, collateral-free loans, overdraft loan facilities, seminars, workshops, etc.