MSME stands for micro, small and medium enterprises. To promote MSME segment (manufacture and Service Providers), the Government of India provides various subsidies, schemes and incentives promote MSMEs.
To obtain the benefits under MSMED Act, every eligible MSME is required to get Registration. Any kind of business either proprietorship, partnership firms, LLPs, Private Limited Company’s and Public Limited Companies can apply for MSME Registration. If any of these entities fulfilling the criteria as mentioned below can apply for MSME registration and avail various benefits:
|Enterprises||Investment in plant & machinery|
|Micro Enterprises||Does not exceed INR 25 lakh|
|Small Enterprises||More than INR 25 lakh but does not exceed INR 5 Crore|
|Medium Enterprises||More than INR 5 Crore rupees but does not exceed INR 10 Crore|
|Enterprises||Investment in equipments|
|Micro Enterprises||Does not exceed INR 10 lakh:|
|Small Enterprises||More than INR 10 lakh rupees but does not exceed INR 2 Crore|
|Medium Enterprises||More than INR 2 crore rupees but does not exceed INR 5 crore rupees|
MSME Registration process is completely online and linked with aadhaar. An aadhaar based OTP is first step to start MSME registration process. This aadhaar based otp can be obtain on Proprietor/Partner/Director’s registered mobile no.
Documents required for MSME Registration:
As registration process is completely online hence no physical documents will be required. However following information to be provided to complete the registration:
- Aadhaar no of authorised person
- PAN Card of business
- Certificate of incorporation in case of Company/LLP
- Address of Business Premises and registered place
- Bank Account no and IFSC
- No of employee involved in business
- Total investment in business
- Nature of business activity and relevant industry code
Advantages of MSME Registration
Following are the advantages of MSME registration.
- Exemption on interest rate on overdraft (OD)
Enterprises that have MSME Registration can avail benefit of 1% exemption on interest rate on OD as mentioned in the scheme but this is totally depending upon bank‘s policy.
- A huge Subsidy on Patent registration
Enterprises that have MSME Registration Certificate can avail 50% subsidy on government fee for patent/trademark registration.
- Concession in electricity bills
Enterprises that have MSME Registration Certificate can avail Concession on electricity bill by making application to electricity department along with MSME Registration Certificate.
- Eligible for Industrial Promotion subsidy
Enterprises that have MSME Registration are eligible for Industrial Promotion Subsidy as may be prescribed by the Department of Industrial Policy and Promotion (DIPP).
- Reimbursement of ISO Certification charges
Enterprises that have MSME Registration Certificate can claim reimbursement of ISO Certification expenses by making application to Indian Register Quality Systems.
- Collateral Free loans from banks
The Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGS) was launched by the Government of India to make available collateral-free credit to the micro and small enterprise sector. Both the existing and the new enterprises are eligible to be covered under the scheme.