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MSME Registration

MSME Registration

What is MSME ?

In India, MSME was introduced in the year 2006. Actually, there were still some service sectors, that were not yet included in this sector but was included in the definition of the Micro, Small and Medium-sized Enterprises making a historic change to this Act. Hence, leveraging the scope of the sector even now the government simplified the MSME Registration online with the paperless work.

The benefits of MSME registration include priority sector lending, power tariff subsidies, capital investment subsidies and excise and direct tax exemptions. Following are the conditions which need to be fulfilled to qualify under MSME Act.

  • All the manufacturing enterprises which have invested less than 10 crores in machinery and plants are allowed to be registered as MSME.
  • In service enterprises, the investment in plants and machinery should not be more than 5 crores.
  • And in near future, if your enterprise exceeds the maximum limits, then it will not sum up as MSME.

What Are The Different Types of MSMEs?

Micro Enterprises

Micro-enterprises are the smallest entities, of course. The investment under Micro manufacturing enterprises should be less than Rs. 25 lakhs in plant and machinery, whereas, the micro service enterprises should not exceed Rs. 10 lakhs investment.

Small Enterprises

In small manufacturing enterprises, the investment should be in between Rs. 25 lakh and Rs. 5 crores in plant and machinery, while in small service enterprises this investment limits between Rs. 10 lakh and Rs. 2 crores.

Medium Enterprises

And if we’ll talk about the Medium manufacturing enterprises, then the investment should be in between Rs. 5 crore and Rs. 10 crores in plant and machinery, and for small service enterprises it should be in between Rs. 2 crore and Rs. 5 crores.

Benefits of MSME / SSI Registration

There are multiple benefits of MSME registration for small businesses:

  • Cheaper bank loans : The rate of interests on loan offered to MSMEs is 1-1.5% lower compared to typical business loan interests.
  • Easy access to credit : PM Modi has introduced the Mudra Loan scheme, which provides loans to MSME / SSI without collaterals.
  • Quicker approvals from states and central government bodies: Business registered under MSME are given higher preference in terms of government license and certifications.
  • Tax rebates: MSME / SSI registered businesses enjoy multiple income taxes and capital gain taxes subsidies from the government.
  • Cheaper infrastructure : Charges are lower for MSME registered company for facilities such as electricity and VAT exemptions. In fact, other business services such as patents are also cheaper for MSMEs.
  • Access to tenders : There are multiple government tenders which are open only to MSMEs to promote small business participation in the India.

Document Required for MSME registration

  • Your Aadhaar Number.
  • Name of Applicant.
  • Social Category.
  • Gender
  • Name of Enterprise / Business.
  • Type of Organization you are opting for.
  • Your PAN number.
  • Location of Plant you are setting up in a place.
  • Your current office Address.
  • Mobile Number.
  • Your E- Mail ID.
  • Date of Commencement of Business.
  • Your Bank Account Number.
  • Bank IFS Code.
  • Main Business Activity of Enterprise
  • NIC 2 Digit Code.
  • Additional details about Business.
  • Number of employees
  • Investment in Plant & Machinery / Equipment
  • Attachment of your scan copy of Aadhaar card