MSME Registration Open Doors For Various Opportunities For Entrepreneurs

What is MSME?

MSME full form is Micro, Small & Medium Enterprises. These are small-sized entities as per their investment and comes under priority sectors lending in which there is a likelihood of getting a higher amount of loan at a lower rate of interest. These are also called small scale industries or SSI’s. After the announcement by the Finance Minister Nirmala Sitharaman, there has been a revision in the definition of the MSME. Hence the comparison of the old and new definition can be shown as follows:

*Revision made by the Government

In the existing definition, there is a limit to the interest of the entrepreneurs to grow as they are unable to scale up their business further and the MSME classification is different for both services & manufacturing. Whereas in the revised definition, there is no differentiation in the manufacturing and services sector and the composite criteria of both investment & annual turnover are included

Also Read: What are MSME Loans?

What is the MSME Registration process?

MSME Registration is not tedious and complex and can be easily done easily

  • To do the registration, the owner has to fill a single form which can be done online or offline
  • Registration of multiple industries can be done through the single form
  • The single form is available on the website and the link is https://udyogaadhaar.gov.in/ or https://msme.gov.in/
  • After the details are filled and uploaded, the registration number gets issued
  • MSME certificate is now called Udyog Aadhar

For the registration, the person can provide self-certified certificates & no registration fees are required for this process.

What are the benefits of MSME registration?

  • Cheaper Bank loans –  the interest rate is less around 1 to 1.5% which lower than the interest on the regular loans
  • Tax Rebates – various tax rebates are offered to MSMEs if they are registered. Credit for Minimum Alternate Tax is carried for up to 15 years instead of 10 years
  • Subsidy on Patent registration –  the owner gets a subsidy of 50% on the patent registration
  • Exemption on Overdraft facility – the owner gets 1% exemption on interest on the overdraft facility that helps in reduction on the cost further
  • Government Reservations & tenders – Manufacturing of around 300 products have been reserved under the Government Storage Purchase Program under the Central Government and the owners also get access to the Government tenders, license and certificates.
  • Aid in Technological upgradation – Under the Capital Aid for Technological Upgradation Scheme, the MSMEs get opportunities to do technological upgradation by getting loans at a lower rate of interest
  • Safeguards from the delayed payment of the customers – the buyer must pay on the date of the payment and if no date has been mentioned then the payment must be made within 15 days of acceptance of the product or service.
  • Participation in the International Trade fair – Udyog Aadhar Registration helps the MSME to promote their business internationally through trade fairs which tends to be very expensive if not  supported by government
  • Subsidy in Bar Code Machine or Registration – retail business registered under Udyog Aadhar is eligible for the Bar Code Registration. Bar Code technology on the products helps in getting subsidy from the government.
  • Octroi Benefits for MSME –  the entrepreneur gets the benefit of paying the Octroi through Udyog Aadhar for exporting or importing goods
  • Can apply for a loan on GST Platform – If the entrepreneur has Udyog Aadhar Certificate & a valid UAM Registration number for his/her business then he/she is eligible for apply for an MSME loan on the GST portal
  • Eligible for the Industrial Promotion Scheme – MSME business that has Udyog Aadhar are eligible for the Industrial Promotion scheme where they get a facility of the special economic zone from the government
  • Increase in the loan limits – under the Udyog Aadhar scheme, the entrepreneur gets the benefit of increasing the loan amount in order to expand his/her business
  • Subsidy in ISO registration certificate – ISO certificate is unaffordable for small businesses, but due to the Udyog Aadhar Certificate businesses can get the ISO Registration Certificate and run their business with international standards
  • Concession on the Commercial Electricity Bill – If a business is into manufacturing or production then the person gets concession on the Commercial Electricity Bill under this scheme
  • NSIC credit ratings & performance – for participation in any kind of government tender, Udyog Aadhar registration is required as NSIC has a strong weightage for government tender & projects

What are the documents required for the MSME Registration?

  • Business Address Proof
    • If the business is owned – The ownership proof can be shown in the form of an allotment letter, possession letter, lease deed or property tax receipt. No other document is required to be submitted as proof if a municipal license is issued in the business name or in the name of the proprietor, partner or director
    • If the business is rented – the documents that reflect the Landlord ownership evidence are rent receipt, no objection certificate by the landlord, utility bills, etc.
  • Partnership Deed/MOA & AOA
    • Copy of memorandum of association or articles of association needs to be submitted
    • Certificate of incorporation need to be submitted
    • Copy of the resolution passed in general meeting need to be submitted
    • Copy of Board resolution having the authority given to the Director to sign the MSME application need to be submitted
  • Industrial License & Bills of Machinery Purchased
    • Bills w.r.t purchase & installation of plant & machinery need to be submitted on demand
    • In certain cases, the applicant has to submit a copy of an industrial license, which is obtained by giving an application to the Government of India.

What are the schemes for MSME by the Government?

Some of the schemes launched by the government for MSMEs are:

  • Business Incubators – 70% t0 80% of the project cost is financed by the government to help innovators to implement new design, idea or products
  • Credit Linked Capital Subsidy Scheme – A capital subsidy is being given by the banks under the scheme. The entrepreneurs get support to upgrade their business through technological advancements
  • Women Entrepreneurship schemes – various government schemes such as Bharatiya Mahila Bank, Annapurna Scheme, etc. that helps women entrepreneurs with capital, counselling, training and delivery techniques to manage their business.
  • Credit Guarantee Trust Fund for Micro & Small Enterprises – 75% of the loan amount to the banks guaranteed by the Trust fund. The corpus is provided by SIDBI and Government of India.

Also Read: MSME Registration: What is it, and How to get it?

Also Read: Who Can Apply For MSME Registration?

There are many more government schemes that entrepreneurs can have access to if they have registered under MSME

Apply for MSME Loan

MSME enterprises are the backbone of the Indian economy, hence the government from time to time brings out various schemes, subsidies & incentives to support & promote MSMEs. MSME registration act as the engine for economic growth and opportunity for equitable development for all.

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