Everything you need to know about MSME

Last Updated On: Dec. 24, 2021, 10:25 p.m.
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Everything you need to about MSME Registration

The Ministry of Micro Small and Medium Enterprises has provided a suitable name for Small Scale Business operations in India as Micro, Small and Medium Enterprises (MSME).

 

Who are all eligible to Register as MSME?

Any type of Entity such as

  • Proprietorship Firm
  • Partnership Firm
  • Association of Persons
  • HUF
  • Company
  • LLP and
  • any other Business entity can Register as MSME.

 

 

What is the criteria for considering as Micro, Small or Medium Enterprise?

Section 7 of “MSMED Act” classifies the enterprises into micro, small and medium enterprises. In case of manufacturing sector, classification has been done on the basis of investment in plant and machinery and in case of service sector, classification has been done on the basis of investment in equipment’s.

Earlier there was criteria which was based only on the Investment in Plant and Machinery but from 1st July, 2020 the Ministry has changed the thresholds as well as the criteria for considering the business entity as Micro, Small or Medium Enterprise based on Investment in Plant and Machinery as well as on Turnover of the Entity. The revised Criteria for MSME is as below:-

 

Procedure for Registration as MSME:

  • MSME registration has now been replaced with the Udyam Registration.
  • MSME registration is to be done in the government portal of udyamregistration.gov.in. The registration of MSMEs can be done under the following two categories in the portal –
  • For New Entrepreneurs who are not Registered yet as MSME and
  • For those having registration as EM-II or UAM and For those having registration as EM-II or UAM through Assisted filing.
  • This registration with MSME/Udyam Registration is completely online.

 

What are the benefits of registering MSME?

1. Subsidy on Patent Registration & Industrial Promotion:

Business enterprises registered under the MSME Act are given a hefty subsidy of 50 per cent for patent registration. This can be availed by sending an application to the respective ministry. In addition to this, one of the great MSME registration benefits is to get subsidy for industrial promotion suggested by the Government.

 

2. Overdraft facility along with Interest Rate Exemption:

Businesses or enterprises registered as MSME/SSI under the MSME Act are eligible to avail a benefit of 1% on the overdraft as part of the Credit Guarantee Trust Fund Scheme. Although this can vary from bank to bank.

 

3. Concession on Electricity:

One of the simplest MSME registration benefits, businesses registered under the MSME Act can avail a concession on electricity bills. All they have to do is submit the bills along with an application and a copy of the registered certificate by MSME.

 

4. ISO Certification Charges Reimbursement:

A registered small or medium enterprise can claim the expenses for reimbursement that were spent on ISO certification.

The MSME industry is growing significantly due to the constant support from the Indian Government. This has further inspired everyone, especially the youth, to explore their entrepreneurial side and start their own venture. However, in such cases, knowledge regarding MSME and MSME registration benefits are a must to know.

 

5. Loans without collaterals:

The Government has introduced various initiatives for MSME/SSI that allow them to avail credit without collateral. One of the best MSME registration benefits, the initiative to provide collateral-free loan is undertaken by GOI (Government of India), SIDBI (Small Industries Development Bank of India) and the Ministry of Micro, Small and Medium Enterprise under the name The Credit Guarantee Trust Fund Scheme. This is by far the best MSME registration benefits for small business owners.

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