MSME Registration in India: Procedures, Benefits, and Documents Required
What is the procedure for registering an MSME?
Any company claiming to be a small or medium-sized business (SMB) must make certain that it is properly registered. Business registration for micro, small, and medium-sized enterprises (MSME) is a type of business registration. The MSMED Act was passed by the Indian government to assist small and medium-sized businesses through various programmes, subsidies, and incentives. Because MSME plays such an important role in the country’s economic development, banks are more willing to lend to MSME-registered businesses at reduced interest rates.
Also, Read- udyam registration portal
Process for registering a small business:
The next step is to discover how to register a business as an MSME now that you know how to classify enterprises based on their kind of operation and investments. This registration requires the submission of a few documents, such as personal information, biographical information, and so on. Continue reading to learn more about how to register a small business.
Before you start the process, make sure you have an Aadhar Card. MSME registration requires an Aadhar Card. You can apply for one online if you don’t already have one.
The MSME Registration Process Requires the Submission of the Following Documents
- Aadhar number of the applicant
- Name, gender, PAN number, email address, and mobile number of the applicant.
- The PAN, location, and address of the company.
- The number of employees you intend to hire and the date you intend to open your firm.
- Bank account number and IFSC code
- The principal business activity of the company
- NIC code (two digits)
- Plant and machinery/equipment investments
- “MoA” and “AoA”
- Copies of Purchase and Sales Invoices
The MSME registration procedure is broken down into steps.
- Start Registration Process
visit official website- https://udyamregister.org
- Complete the application form to the best of your ability.
The first step is to fill out the MSME Registration form, which includes all pertinent information about your company, such as its name, registration number, and GST number.
- Fill in your personal details.
At this point, you must fill in all of your personal information, including your name, address, PAN card, bank account details, and any other information required for MSME registration. There must also be a photo submitted. Before you post a photo, be sure it fits within the site’s size restrictions.
- Application will be processed by an executive
During this stage, an MSME executive will evaluate your application. You will be notified if there is a discrepancy and given the option to remedy it.
- Receive Certificate in Mail
After completing the whole form, you will receive an MSME Registration certificate. To see how the Sample MSME Certificate would look, you can download a copy. The Ministry will not send you a paper copy. You will obtain a virtual certificate for MSME Registration.
This is the procedure for registering a business as a micro, small, or medium-sized enterprise (MSME). It’s worth noting that the entire registration process is completely free. Many internet portals, on the other hand, charge firms a fee to finish the registration process on their behalf.
The Advantages of MSME Registration:
Although MSME registration is not needed, it is available so that all entrepreneurs can maximise the plan’s benefits and take advantage of the government’s resources. Priority funding, cluster finance, and the flexibility to implement the most up-to-date quality management standards are just a few of the benefits.
Let’s go over each of the benefits of MSME registration one by one:
1. Patent registration is eligible for a 50% subsidy.
If you’ve created something unique, such as an innovative product or business concept, you’ll have to pay a high amount to patent it. However, by registering as an MSME, one might receive a 50% subsidy on patent registration. As a result of this method, more entrepreneurs will be encouraged to invent and innovate. If they register with their specific industry, they can receive a 50% subsidy.
2. Loans with No Collateral
The availability of collateral-free business loans from banks and NBFCs is one of the most significant benefits of MSME registration. As a result, SMEs and MSMEs can now obtain loans such as working capital loans and credit line loans without putting up any collateral.
3. Interest on overdrafts is not taxable.
An overdraft is available to MSMEs with a good credit history and good relationships with their banks. On overdraft facilities, MSMEs are entitled for a 1% interest rate decrease. This might be extremely beneficial to MSMEs. MSMEs should verify with their bank to see if they offer this service, as not all banks do.
4. Policy on Reservations
One of the best things about the MSME sector, as previously stated, is that it has mostly been unaffected by outsiders. As a result, the MSME sector has seen tremendous success. The government’s reservation programme is responsible for a significant portion of this success. Some MSME industries have been granted exclusive manufacturing rights for specific commodities. The federal government has set aside over 300 products for purchase exclusively from this sector under the Government Stores Purchase Program. This boosts the MSME sector, which is now unaffected by fierce competition.
5. Upgrades in Technology for Small and Medium-Sized Businesses
Some MSMEs may not be able to effectively utilise their resources due to a lack of innovative technologies. The government helps these enterprises upgrade their equipment with cutting-edge technology by supporting them in getting low-interest bank loans through the Capital Aid for Technological Upgrading Scheme. The government is encouraging more MSMEs to enter the technology sector by offering aid and financial assistance as technology advances.
6. Payment protection insurance
The government’s protection against late payments is one of the most significant advantages of registering under the MSME plan. This protection against late payments is used against the buyers in a business transaction. The buyer must pay within fifteen days of receiving the products or services if the agreement does not include a payment deadline. Most SMEs can utilise this to make sure they don’t owe any money to anyone or have any bad debts.
The advantages outlined above indicate how important and advantageous it is for a small business to register under the MSME Act. Overall, becoming an MSME includes a variety of benefits that could aid your company’s growth.
A superior MSME loan structure, subsidised rates, government assistance, and more can be obtained by registering a firm under the MSME. In our upcoming piece, we’ll go through the advantages of udyam registration in further detail.