MSME Registration Benefits For Small Scale Business
The abbreviation of MSME is Ministry Of Micro, Small And Medium Enterprises.
In many developing counties like India, it is the backbone of the economy.
It is also considered‘ THE ENGINE OF GROWTH’ in India.
Ministry of MSME was introduced on May 9th, 2007 by the amendment act ALLOCATION OF BUSINESSES RULES,1961.
In the year 2015, it was named as UDYOG AADHAR REGISTRATION.
The eligibility for MSME Registration is the business that can be in co-operation for more than 9 months. The turnover for the business in 3 months should be INR 90000.
Again on 1 July 2020, Udyog Aadhaar registration was renamed to Udyam Registration. Then Union Minister of India introduced Udyam Registration Portal for business registration.
They also made working on the old Udyog Aadhar site and furthermore, new msme registration sites are also introduced.
MSMEs are of 2 times:
Manufacturing enterprises: Manufacturing enterprises are those, commercial businesses that make use of the components, elements, or raw materials to make final items.
Ex: printing, ayurvedic products, tobacco, etc.
Service enterprises: service enterprises are those, firms that engaged in imparting or rendering of offering and are in investment in equipment.
Ex: publishing, Hospital, software service, etc.
Registration of MSME is not legally mandatory but registration will help you to reap several benefits.
Old MSME Udyog Aadhaar Registration Certificate
Existing MSME Classification
< Rs.25 lakh
< Rs.5 crore
< Rs.10 crore
< Rs.10 lakh
< Rs.2 crore
< Rs.5 crore
New MSME Udyam Registration Certificate
Revised MSME Classification
Not more than 5 Cr.
Not more than 1 Cr.
Not more than 50 Cr.
Not more than 10 Cr.
Not more than 250 Cr.
Not more than 50 Cr.
Registration of MSMEs is to be carried out on the private registration site of udyogadharcertificate.in. New startup businesses and entrepreneurs need to click on the "For New Entrepreneurs Not Registered as MSME" button on the MSME registration home page. A new MSME registration is carried out by entering the number of the Aadhaar card with or without the PAN card. On e-msme.org website business owner can register their business in a simple and easy way.
Benefits of MSME
LOANS WITHOUT COLLATERAL:
The government has taken an initiative to provide collateral-free loans. The government also provided a credit guarantee trust fund scheme, which is beneficial to small scale owners. The loans are given by GOI (Government of INDIA) and SIDBI(Small industry development bank of India).
SUBSIDY OF PATENT REGISTRATION AND INDUSTRIAL PROMOTION :
The government has provided a hefty subsidy of 50 percent. The benefits can be provided by sending an application to the respective ministry. subsidy from the industrial promotion which is suggested by the government.
OVER DRAFT FACILITIES ALONG WITH INTEREST RATE EXEMPTION :
Enterprises registration as MSME act is eligible to avail benefits of 1 percent on overdraft as part of credit guarantee trust scheme. It may vary from bank to bank.
CONCESSIONS ON ELECTRICITY :
One of the simplest and useful benefits of the MSME act is concessions of electricity. All they need to do is submit bills along with an application copy of the registered certificate.
PROTECTION AGAINST DELAYED PAYMENTS :
The government has provided a helping hand by providing protection against payments. As of now, MSME has given business owners and enterprises to collect interest on payments delayed by buyers.
A buyer should make payment within 15 days of purchase. If a buyer delays, the payment more than 45 days, the enterprise is eligible to charge compound interest within 3 times the rate notified by RBI.
ISO CERTIFICATE CHARGES REIMBURSEMENT :
A registered MSME can claim the expenses for reimbursement that were spent on ISO(International organization of standardization).
ENTREPRENEURIAL MEMORANDUM POLICY :
Enterprise memorandum is mandatory for engaging in the manufacturing process where it is optional for enterprises engaged in rendering services.
Banks have allocated a certain percentage of their lending priority sector like – Agriculture, micro small-sized enterprises, loans to poor students. It is beneficial to get loans from banks.
They can be times with a surplus of funds while sometimes very penny can make difference. when latter situations arrive funds will be required to be developed on an urgent basis.
MSMEs loans will benefit the owner, MSME loans are easy and hassle-free. There is not much time taken loan amount, the processing time is also low than 24hrs.
The government has made it compulsory for large co-operations to buy certain allied products from the MSMEs.The benefits offered to them especially in India is huge in terms of the support system of both central and state government. The government also supply a trained professional to help owners of the MSMEs to learn to run. They utility resources without leading to wastage. MSME helps the county in terms of creating employment opportunities for 50 million youth which is very beneficial. The sector has survived almost all the treats emerging out of still completion for both the domestic and international markets.
MSME may not in the use of their resources due to lack of sophisticated technology. So government helps by providing capital aid for technological up-gradation schemes, helps to upgrade their equipment.
MSMEs form 8 percent of GDP(Gross Domestic product).
MSME industry is growing significantly due to the constant support from the Indian government.
MSME loans come with great benefits like scaling manufacturing capabilities, curtailing regional disparities, balancing the distribution of wealth, tremendous growth in the sector, less investment with more profit, reducing employment and underemployment, operate resources efficiently, finical records in a systematic manner.
To explore their entrepreneurial side and start their own venture, knowledge of MSME and it’s registration benefits are important.
MSME registration is completely voluntary. Upon MSME registration you will get to reap certain benefits unavailable to you otherwise. If you are looking forward to getting an MSME loan then you should make sure your credit score is good and have a proper MSME registration certificate.
The owners of the MSME sector must not worry. The government is trying its best to provide them relief during the pandemic. The owners must cooperate with the government's strategies to uplift their business and save the economy of the country.