The Micro, Small and Medium Enterprises (MSMEs) form a significant component of the Indian economy. The MSME sector in India is the second-largest in the world, after China. As per...
India is a hub of the corporate world that engulfs several companies from small scale to multinational organizations. However, to reach the top of the competitive pedestal, one needs to start small. All the medium and startup companies have played a vital role in uplifting the economy of India. The preliminary requirement to run any small and medium scale enterprises is to obtain an MSME registration certificate.
The certificate of MSME provides an array of benefits to such business models. If you also aspire to commence a small or medium scale business, then this blog will act as a comprehensive guide to MSME registration.
An Overview of MSME Sector
The Micro, Small, and Medium Enterprise abbreviated as MSME is the backbone of a progressive country like India. The central objective to establish the MSME sector was to empower the development of micro, small, and medium enterprises. It majorly contributes to the manufacturing, employment, exports, and industrial units.
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Eligibility Criteria for MSME Registration in India
The eligibility criteria to attain MSME registration certificate differs based on the investment in plant and machinery:
- Manufacturing Enterprises: Medium enterprises in the manufacturing sector need to have an investment of less than Rs.10 crores in plant & machinery. Whereas, for micro-enterprises, the limit is less than Rs. 25 lakhs, and in case of small enterprises, the investment should be less than Rs. 5 crores.
- Service Enterprises: Similarly, for the micro-enterprises dealing in service domain must have an investment of less than Rs. 10 lakhs. On the other hand, the limit extends to less than Rs. 2 crores for small enterprises, and less than Rs. 5 crores for medium enterprises.
What are the Benefits of MSME registration?
One can avail numerous perks from MSME registration. Let’s take a look at some of the advantages that small and medium enterprises leverage after registration:
- Collateral Free Credit- To undertake any business operations, an entrepreneur must have enough funds. Considering the inadequacy of capital in startups, the Government enables collateral-free credit. It ensures to satiate the needed fund requirement of micro and small sector enterprises. Such an initiative is a boon for both the old and new enterprises. Moreover, the Government has introduced a trust namely ‘The Credit Guarantee Trust Fund Scheme’ and SIDBI(Small Industries Development Bank Of India) to further guarantee the implementation of Credit Guarantee Scheme for all SSI’s.
- Subsidy on Patent Registration- Another advantage of MSME registration is that it provides an enormous 50% subsidy to the enterprises that possess a certificate of MSME registration. To avail the subsidy for patent registration, the enterprise has to give an application to the respective ministry.
- Lower Electricity Bills- The concession of fewer electricity bills is only accessible to all the MSME approved enterprises. Such enterprises can provide an application to the electricity department along with the certificate of registration by MSME.
- Reimbursement of ISO Certification Charges- A registered MSME has the authority to claim the payment of the expenses that were spent during the ISO certification process.
- Other Additional benefits- Apart from the stated perks, one can get multiple other benefits like a hassle-free opening of bank accounts, the grant of bank loans at lower interest rates, discarding stamp duty and registration charges, etc.
Government Launches MSME Schemes
The Government has launched multiple schemes to enlarge and support small scale industries or MSMEs such as:
- Udyog Aadhar Memorandum (UAM): This scheme is beneficial to obtain loans, subsidies, and credit, from the Government with ease.
- Women Entrepreneurship: Under this scheme, woman entrepreneurs can access to capital, training, counselling, and latest techniques to further expand their business.
- Zero Defect Zero Effect: The primary purpose of such a scheme is to ensure that the manufactured goods pass a standard paradigm. Moreover, MSMEs can employ some concessions and rebate from this scheme.
- Quality Management Standards and Quality Technology Tools: Through this scheme, the Government emphasize on maintaining the quality of goods and incorporation of advanced technology.
- Grievance Monitoring System: With this scheme, the owners of small and medium enterprises can track the status of their complaints if they aren’t satisfied with the final outcome.
- Credit Linked Capital Subsidy Scheme (CLCSS): MSMEs can directly approach banks for subsidies with the help of this scheme. Also, they can employ that capital subsidy to upgrade the business and have a better means of production.
Here is the checklist of the documents which an MSME registration applicant needs to affix along with the application:
- A copy of Aadhar card;
- Name of the enterprise or business;
- Address proof of registered office address or rental agreement in case the office is on rent and also provide NOC from the landowner:
- Further, provide the Certificate of Incorporation of your enterprise;
- Information about the total number of your company’s employees;
- Mention the type of organization which you are setting up;
- Central business activity your existing business;
- A copy of PAN card;
- Fill in your personal details like mobile no. and email address;
- NIC 2 digit code;
- MoA & AoA;
- Investment in Plant & Machinery / Equipment;
- Lastly, attach a cancelled cheque of the current account of your business.
Step by Step Procedure to attain MSME Registration Certificate
The procedure of MSME registration is quite simple, and an applicant can also avail the option to MSME registration online. Hence, follow these steps to procure the MSME registration certificate without much hassle:
Step-1: The first and foremost step in the process of MSME registration is to file a form either online or offline. In case you choose to file an online form, then you have to visit on the official website of Udyog Aadhaar and login as an entrepreneur.
Step-2: Now fill all the requisite details of the MSME industry you want to operate in the application.
Step-3: Since documentation is an essential part of MSME registration in India, affix all the mandatory documents like Aadhaar number, address, bank details, PAN card, name of the industry, etc.
Step-4: The next step is to provide self-certified certificates.
Step-5: After filling the form and affixing the required documents along with that, you just have to wait for 2-3 working days.
Step-6: Ultimately, you reach onto the last step in which you will receive the MSME registration number. Thereby you download the MSME registration certificate from the official website of Udyog Aadhaar.