To encourage entrepreneurship, the government offers special benefits to small businesses in the form of subsidies and incentives. In addition, banks offer low-interest loans to help these businesses get started.
Small businesses must register under the Micro, Small, and Medium Enterprises (MSMEs) Act in order to take advantage of these benefits.
If a business is registered under the MSMEs Act, it can benefit from a variety of government programs and incentives, including lower interest rates on bank loans, tax breaks, preference in the procurement process, and access to various government schemes and incentives.
MSME registration is not required by law. The MSME registration process in India, on the other hand, has been designed to provide maximum benefits to all types of businesses. After registration, any business is eligible to receive the benefits provided by the MSMED Act.
Some of the benefits provided by the Central Government include easier bank loan approval (priority sector lending), lower interest rates, an excise exemption scheme, exemption from certain tax taws, and statutory support.
The state governments and union territories have also put together their own package of MSMEs-friendly facilities and incentives. The state government provides MSMEs with benefits such as the development of specialized industrial estates, tax breaks, power tariff breaks, capital investment breaks, and other assistance.
Both the federal government and the state, whether by law or otherwise, target their incentives and support packages to units that have registered with them. Banking laws, excise laws, and direct tax laws have all included the term "MSME" in their exemption notifications.
As a result, the registration certificate issued by the registering authority is regarded as proof of MSME status and is required to avail of MSMEs' benefits.
The Micro, Small, and Medium Enterprises (MSMEs) were classified solely on the basis of their investment under the MSME Act-2006. However, in 2020, Finance Minister Nirmala Sitharaman broadened this definition and introduced a composite criterion.
The term "turnover" was also added to the definition. The most recent classification of MSMEs is provided below.
Micro - Microenterprises will be defined as those with an investment of less than Rs. 1 crore and a turnover of less than Rs. 5 crores.
Small - Small enterprises will be defined as those with an investment of less than Rs. 10 crores and a turnover of less than Rs. 50 crore.
Medium - Medium enterprises will be defined as those with an investment of less than Rs. 20 crore and a turnover of less than Rs. 100 crore.
The documents required for registration vary depending on the type of entity wishing to apply for the MSME certificate. In general, documents such as business address proof, sales, and purchase bills are required.
A property tax receipt, lease deed, allotment letter, or possession letter will be required if the proprietor owns the premises. If the proprietor or the business, or any of the partners or directors of the business, has a municipal license, no other documents are required.
In the case of a rented property, the landlord must provide a NOC (no objection certificate) and a rent receipt. In addition, an electricity or water bill (showing utility usage and property ownership) must be submitted.
Documents for the Company
If the entity is a corporation, a copy of the 'MoA' (Memorandum of Association) and 'AoA' (Articles of Association) must be submitted along with the certificate of incorporation. A copy of the general meeting resolution authorizing one of the directors to sign is also required.
In the case of partnership firms, the partnership deed must be submitted, as well as a copy of the registration certificate if it is a registered partnership firm.
Bills and Licenses
Aside from the mandatory documents mentioned above, there are some documents that must be submitted on demand, such as purchase bills and receipts related to the installation of the plant and machinery. A copy of the proprietor's industrial certificate, if applicable, must also be submitted.
The following are the steps to take for the MSME Registration online process:
Step 1: Fill out the MSME registration form online with all of the necessary information by visiting the official website by clicking here.
Step 2: After submitting the application form and supporting documentation, the applicant will be assigned a registration number.
Step 3: The final step is to pay the registration fee online.
Step 4: Following successful payment, the authority will register the applicant's business as an MSME within 1-2 working days.
Step 5: The MSME registration certificate is emailed to the applicant's registered email address.
Assists in obtaining low-interest loans
Aids in the acquisition of government contracts
It is now much easier to obtain licenses, approvals, and registrations.
Compensation for ISO certificate costs
Tariff, tax, and capital subsidies are available to registered MSMEs.
Import subsidy of 15% on fully automatic machinery under bank loan
Exemption from direct taxation is granted under direct tax laws.
Aadhar card number
According to the Aadhar card, the name of the entrepreneur is
Social classification (General, OBC, SC/ST)
Name of the Company
Organizational Structure (Proprietorship, Partnership Firm, Private or Public Limited Company, Limited Liability Partnership, Co-operative Society, Hindu Undivided Family, Self-Help Group, Society or Trust)
Personal Identification Number (PAN)
Country, State, District, City, Tehsil, and Postal Code
Address of the Office
Mobile phone number, email address
Date of Business Inception
IFSC code and bank account number
An enterprise's commercial activity
2 digit NIC code – select a primary activity
Additional information about the company
The number of employees and the amount invested in plant and machinery
To check the status using your name and registration number, follow the steps below:
Step 1: To check the status of an MSME application, applicants should go to the MSME registration official portal or click here.
Step 2: Applicants must enter their 12-digit UAM number, followed by the verification code shown in the captcha image.
Step 3: To check the status of your MSME registration online, click 'Verify.'
The fee for MSME registration is determined by the organization through which you will complete your registration. There is no fee for MSME registration when you register through the government website. However, in the case of government registration, the process is time-consuming and difficult. You will face numerous challenges. You'll need to fill out and re-fill your forms. As a result, when you approach an organization with expert consultants to complete your registration, you will be charged a very small fee for MSME registration.
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