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MSME Registration requirements and its benefits

MSME registration is one of the critical processes required for every micro, small, and medium businesses and it plays a crucial role in the Indian economy. Moreover, businesses can avail several unexpected benefits from MSME registration, and we will discuss the same in the blog later.

We have covered a few significant aspects of MSME and MSME registration in this blog. Below, you can find the list of the topics covered:

· What are MSME and MSME registration?

· Categorization of MSME

· Key benefits of MSME registration

· MSME registration requirements

Categorization of MSME

MSME is categorized into two different classes in terms of investment. They are as follows:

· Investment in plant and machinery, and

· Investment in equipment.

The limit for investment in plant and machinery or equipment for various enterprises is as follows:

Investment in Plant & Machinery

Micro Enterprises: The investment made isn’t more than Rs. 25 lakhs.

Small Enterprises: The investment is between Rs. 25 lakhs to Rs. 5 crores.

Medium Enterprises: More than five crores but doesn’t go beyond Rs. 20 crores.

Investment in Equipment

Micro Enterprises: Investment doesn’t exceed Rs. 10 lakhs.

Small Enterprises: Investment is more than Rs. 10 lakhs but doesn’t exceed Rs. 2 crores.

Medium Enterprise: The required investment is more than Rs. 2 cores but doesn’t exceed Rs. 5 crores.

Key benefits of MSME registration

There are a plethora of advantages that companies or businesses can avail through MSME registration. A few of them are described below:

Ø With MSME registration, it’s quite simple to take loans from the government as well as from the banks and that too at a very low interest.

Ø Company registered with MSME can avail benefits of the tax subsidy.

Ø There are various Excise Duty Exemption schemes for MSME registered enterprises.

Ø Benefits of subsidy tariffs.

Ø Enterprises can have benefits of capital investments subsidy and other support as well.

Ø Banks offer collateral-free loans to the businesses/companies registered with MSME.

Ø There are reservation policies for the manufacturing as well as production sector.

Ø Special consideration for the international trade fairs.

Ø Companies are eligible for IPS subsidy.

Ø Reimbursement of ISO certification.

MSME registration requirements

Enterprises intending to register with MSME needs to fulfill certain requirements and must possess the essential documents for the same. Below you can find the following requirements for MSME registration:

ü The applicant can be the owner of a sole proprietorship, one person company, limited liability partnership, private limited company, etc.

ü PAN card of the proprietor (if a sole proprietorship) and PAN card all directors and members in case of the entity.

ü Aadhaar card of all the members, directors, or proprietor.

ü Evidence of ownership of premises such as allotment letter or possession letter or lease agreement or property tax receipt.

ü If the applicant has rented premises, then he/she must submit the rent agreement and NOC (No-objection Certificate) from the landlord, along with the utility bills.

ü A duplicate copy of sale bill for every end product.

ü Copy of purchase bill of each raw material purchased.

ü In case of Partnership firm, a copy of Partnership Deed is required.

ü Copy of MoA and AoA and the certificate of incorporation, in case of a Private limited company, along with the Board’s resolution authorizing the directors to sign the application.

ü Scanned copy of Industrial license obtained under Industrial Development and Regulation Act, 1951.

ü The purchase bill of installed machinery.

ü An affidavit of Rs. 10/-non judicial stamp duly attested by Notary public affixed providing the status of machinery installed, power requirements, etc.

ü Bills in terms of purchasing and installation of plant and machinery.

ü Current bank account statement.

From the above discussion, it’s clear that MSME registration is a vital process for every micro, small, and medium firms. If you have any queries regarding the MSME / SSI registration process, then you can visit our website Enterslice, where you can get a detailed info on the same.

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What is MSME and MSME Registration Procedure?

MSME registration plays a vital role in the Indian economy as it provides support to the industries through the supply of raw materials, goods, and finished products.

MSME Classification

In India, MSME is classified into two broad categories that are in terms of investment made in plant & machinery and equipment. The details of the same are as follows:

Investments made in plant & machinery

• Micro Enterprise: An enterprise which invests less than Rs. 25 lakhs in plant and machinery.

• Small Enterprise: An enterprise which invests between Rs. 25 lakhs to Rs. 5 crores.

• Medium Enterprise: An enterprise which invests between Rs. 5 crores to Rs. 10 crores in plants and machinery.

Investments made in Equipment

• Micro Enterprise: An enterprise investing less than Rs. 10 lakhs.

• Small Enterprise: An enterprise investing more than Rs. 10 lakhs but less than Rs. 2 crores.

• Medium Enterprise: An enterprise investing more than Rs. 2 crores but less than Rs. 5 crores.

What is MSME Registration?

MSME Registration is an act of registering a business under the MSMED Act which is Micro, Small and Medium Enterprises Development Act.

With MSME registration, it's easy to receive loans from the government as well as from the banks and that too at a very concessional rate so that micro, small, and medium businesses can root their first brick. One can obtain the MSME registration by filing an application for the same on the official website of Udyog Aadhar Registration at http://www.udyogaadhaar.gov.in/.

Documents required for MSME registration

· PAN card of the proprietor, directors, and partners;

· Aadhaar card of the proprietor, directors, and partners;

· Proof of ownership of premises such as allotment letter, possession letter, lease agreement, property tax receipt;

· If the office is on rented premises, then rent agreement along with, NOC from the landlord is required;

· Utility bills;

· Copy of sale bill for every end product;

· Copy of purchase bill of each raw material purchased;

· Scanned copy of Partnership deed in case of partnership firm;

· Copy of Memorandum of Association and Article of Association;

· Certificate of Incorporation;

· Copy of Industrial License as obtained under Industrial Development and Regulation Act, 1951;

· An affidavit on Rs. 10/-non judicial stamp paper duly attested by Notary Public affixed providing the status of machinery installed, power requirement and more;

· Purchase bill of installed machinery;

· Bills regarding purchasing and installation of plant and machinery;

· Current bank account statement.

Procedure for MSME Registration

MSME Registration method is completely an online process and for the same, you need to file an application form for MSME registration form with the help of professional and procure the approval from the department. The MSME registration isn’t obligatory for the companies though it is always advised to obtain. The process has been described below:

• As per the rules and regulations, MSME registration needs filing of an application with the concerned government department.

• In application, the applicant company has got to offer the details of the business they require to run with the required details and documents.

• Aadhaar Number of the applicant is must.

• Details of the applicant like name, gender, PAN number, email ID and mobile number.

• Details of Enterprise like type of the company, PAN of company, location of fitting a plant, address of the organization, date of the commencement of the business, range of staff.

• Bank Account range and IFS Code.

• Primary business activity of the enterprise.

• NIC 2 Digit Code.

• Investment in Plant & Machinery / instrumentality.

For the completion of all the documentation for SSI Registration/MSME registration method takes around 2-3 operating days. All the required formalities should be completed to avoid any future problem and to finish the method in a hassle-free manner.

For any further queries relating MSME and MSME registration procedure, you can contact Enterslice and avail best consulting and legal services ever.

Source url - http://entersliceindia.doodlekit.com/blog/entry/4665969/what-is-msme-and-msme-registration-procedure

MSME Registration for Small, Micro and Medium Sized Organization

Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 gave us clear definitions as to what exactly are the meaning of Small, Micro and Medium Sized Enterprises. These definitions are based on the amount of investment in Plant & Machinery in case of production or any further processing of goods, and investment in equipments in case of Services.

Definition in relation to Goods

Enterprises	Investment in plant & machinery
Micro	Upto 25 lakh rupees
Small	More than 25 lakh rupees - 5 Crore rupees
Medium	More than 5 Crore rupees - 10 Crore rupees

Definition in relation to Services

Enterprises	Investment in plant & machinery
Micro	Upto 10 lakh rupees
Small	More than 10 lakh rupees - 2 Crore rupees
Medium	More than 2 Crore rupees - 5 Crore rupees

Ministry of Micro, Small and Medium Enterprises is responsible for formulation of all the laws and rules & regulations for implementation of such laws relating to MSMEs.

Micro, Small and Medium Enterprises form a major part of the economic sector of any developing country. MSME Act was introduced with an objective to support small, micro and medium sized enterprises to promote equitable development.

IS MSME Registration Mandatory?

The answer to this question is, NO. MSME Registration is only a choice provided to the enterprises and is not a compulsory requirement. It is a choice given to the SSI/MSME category entrepreneurs weather to get MSME registration or not. MSME registration is not an obligation and also comes with number of benefits including:

- Subsidies under tax laws

- of Power tariff subsidies, help in development of specialized industrial estates etc.

- Exemption under Direct Tax Laws

- Easy availability of Bank Loans that too at reduced interest rates.

Are SSI Registration & MSME Registration different?

Many confuse Small Scale Industries Registration with MSME registration, but the fact is that SSI Registration is replaced by MSME Registration. And there is no fuzz relating to it, as MSME Registration Process is quite simple. The appli8cant is required to have Aadhaar Card.

And if the applicant has not started business, they can apply for provisional registration. It is valid for a period of 5 years and can be reapplied after that.

Source url - http://blogs.montevideo.com.uy/blognoticia_165207_1.html

MSME Registration and Its Importance

Registering a start up company as a micro, small or medium scale enterprise under MSMED Act in India automatically conveys a plethora of benefits on the enterprise. The MSME registration is a totally optional process for all relevant enterprises but companies prefer the certification because of the following reasons:-

· Under Credit Guarantee Fund Scheme, micro and small enterprises get bank loan without collaterals;

· Registered businesses are entitled to charge compound interest on delayed payments from buyers

· Banks charge comparatively lower rate of interest from MSME registered companies.

There are many more such advantages that registered companies enjoy. Hence it is sensible to register your business with the Ministry of MSME at the onset itself.

What are the Criteria for MSME registration?

The Ministry clearly specifies the outline defining segregation of enterprises into micro, small and medium scale business entities:-

· Micro industries are ones where the investment in the business is not more than Rs. 25 lakh in the manufacturing sector and not exceeding Rs. 10 lakh for industries in service sector.

· Small industries are the ones whose investment does not go beyond Rs. 5 crore in the manufacturing segment and Rs. 2 crore for companies involved in services.

· Medium scale enterprises are one whose investment does not go beyond Rs. 10 crore for manufacturing companies and Rs. 5 crore for ones involved in service sector.

What is MSME Registration Process?

MSME registration can be done online as well as offline. The offline process involves filing the relevant form and submitting it along with self-attested documents like Personal Aadhar number, Industry name, and bank account details, address proof of the registered office, certificate of incorporation, Partnership Deed, bill copies of machines purchased, sales and purchase bills.

MSME Registration online

Online MSME registration can be done from the government website. The registration form requires the applicants to fill in details like Aadhar Number, name of entrepreneur, social category, gender, physically handicapped, name of enterprise, type of organisation, PAN, address of the factory/plant, registered office address, mobile number, email id, date of business commencement, bank account number, IFSC code, main business activity of enterprise, NIC 2 Digit code, additional details of the business, number of employees, investment amount in plant and machinery in lakh. The scanned copies of Aadhar card is required to be uploaded here.

Udyog Aadhar Registration

Udyog Aadhar is a unique 12-digit number that is an official government identification number. The Udyog Aadhar is granted by the Ministry of Micro, Small and Medium scale enterprises. Once the MSME registration is done, the ministry provides the relevant certification and the Udyog Aadhar number. While this number can be applied for online as well as offline – with the Udyog Aadhar number the unit gets special government subsidies, 15% subsidy for upgradation of technology and 50% subsidy for getting patent registration; financial support to participate in industry specific exhibitions in foreign countries etc.

The Udyog Aadhar Memorandum, also called UAM is a document meant for self-certification of certain mandatory particulars of the MSME like its bank details, owner’s Aadhar details etc.

Is SSI Registration the same thing?

Yes, it is one and the same thing. SSI registration is for small scale business units and their ancillary units. The SSI unit needs to be registered with the Director of Industries at the state government level. With such registration, the enterprise gets special provisions like priority sector lending, excise exemption scheme, also exemption under direct tax laws, and interest on delayed payment etc.

SSI Registration online

The SSI registration online can be from the website of the Ministry of MSME. In fact, the application form for SSI registration and MSME registration is exactly the same including the details that need to be furnished. The Provisional Registration certificate is granted in the pre-operation stage. The provisional certificate is applicable for a period of five years. Once operations commences, the unit needs to apply for the Permanent registration. However if the business does not start its production in the initial five years, it can re-apply for the provisional certificate.

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What is MSME Registration in India?

MSME is termed as Micro, Small and Medium Enterprise and also include any other category of business which falls under. MSME enterprises are becoming a prime factor for developing countries to grow and helps to improve economic stability, promoting equitable development for all. The government of India is also supporting such enterprises by providing various aid such as subsidies, schemes, and incentives to promote MSME. For availing such benefit from Central or State government, the enterprise needs to get registered under MSMED Act. Micro, Small and Medium enterprise whether a manufacturing or service sector needs to get registered under MSMED Act. Registration under MSMED is not compulsory, but to avail benefits for business, one should register it.

Definitions of Enterprises engaged in providing services:

· Micro Enterprise: An enterprise where the investment does not exceed Rs. 10 Lakhs.

· Small Enterprise: An enterprise where the investment is more than Rs.10 Lakhs but does not exceed Rs. 2 Crores.

· Medium Enterprise: An enterprise where the investment is more than Rs. 2 Crores but does not exceed Rs. 5 Crores

Definitions of Enterprises engaged in providing Manufacturing:

· Micro Enterprise: An enterprise where the investment does not exceed Rs. 25 Lakhs.

· Small Enterprise: An enterprise where the investment is more than Rs. 25Lakhs but does not exceed Rs. 5 Crores.

· Medium Enterprise: An enterprise where the investment is more than Rs. 5 Crores but does not exceed Rs. 10 Crores

However, as per the Press Release of 07the February, 2018, Section 7 of the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 will accordingly be amended to define units producing goods and rendering services in terms of annual turnover are as follows:

· A micro enterprise will be defined as a unit where the annual turnover does not exceed 5 crore rupees;

· A small enterprise will be defined as a unit where the annual turnover is more than 5 crore rupees but does not exceed Rs 75 crore;

· A medium enterprise will be defined as a unit where the annual turnover is more than 75 crore rupees but does not exceed Rs 250 crore.

· Additionally, the Central Government may, by notification, vary turnover limits, which shall not exceed thrice the limits specified in Section 7 of the MSMED Act.

Presently the MSMED classifies the Micro, Small and Medium Enterprises (MSMEs) on the basis of investment in plant and machinery for manufacturing units, and investment in equipment for service enterprises.

Who can apply for MSME Registration?

· Proprietorship firms,

· partnership firms,

· LLPs,

· Private Limited Company’s, and

· Public Limited Companies

When to apply for Registration?

MSME Registration can be done after the commencement of business. The date can be a past date but not a future date.

Benefits under MSME Registration?

· Easy sanction of bank loans,

· Lower rates of interest,

· Excise exemption scheme

· The exemption under Direct Tax Laws,

· Development of specialized industrial estates,

· Tax subsidies,

· Power tariff subsidies and,

· Capital investment subsidies,

MSME Registration Process:

Registration Process is divided into two parts namely Pre-operative and post-operative.

Registration before setup of unit: Depending upon the legal entity of the business whether a sole proprietor or a company, needs to submit PAN, Aadhar, Register office proof, MOA and AOA in case of company and other documents demanded by the authority. The Registration Certificate of MSME is issued for a maximum period of two years from its date of issue. The certificate is valid until the commencement of the production or for a period of two years from the date of issue, whichever is earlier.

Registration after the commencement of production: Once the entity is registered under MSME, the business gets various privileges during its post-operation period. The certificate is not mandatory and it can be applied once the production process starts.

Conclusion

The Development of Micro, Small and Medium Enterprise involves various acts and rules, among which MSMED Act is one of them. After the implementation of the Act, there have been many changes for the benefit of Micro, Small and Medium Enterprise in India. It is not compulsory to register under MSMED for every entity, however, it is beneficially to get it registered.

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