msme benefit

MSME Registration: Check eligibility & MSME Registration Process

Business Finance

The Government of India established Micro, Small, Medium Enterprises Department under the MSME Act, 2006 to ease out the registration process for the companies that want to register themselves under the department. The department was earlier called as the SSI department and has been revamped to ensure the benefits of the subsidies, incentives and schemes are provided to the growing industries as well. An important part of the nation’s good and services output is produced by the MSME sector and the various schemes launched from time to time by the government ensure these industries are growing at a substantial rate.

 Organizations can apply for MSME Registration?

Any form of organization or business can apply for an MSME Registration process and can claim the benefits of the schemes rolled out by the government. Below are the entities that can apply for the registration:

  1. Sole Proprietorship Firm: A firm incorporated by an individual
  2. Hindu Undivided Family: A undivided Hindu family owning a business
  3. Private or Public Limited Company: Government and privately held companies
  4. One Person Company: An organization started by a single person
  5. Limited Liability Partnership: A partnership firm where partners have a limited liability
  6. Partnership Firm: Organization started by more than 2 partners
  7. Association of Persons or Body of Individuals: A group of companies owning a business

Based on the investment done by the organization and industry type, MSME status is provided by the authorities. Below are the investment details and the status provided to the organization.

  • For Industries involved in manufacturing and production of good

 Status Investment done by the organization ( INR)
Micro Enterprise Investment < 25 lacs
Small Enterprise 25 Lacs < Investment < 5 Crores
Medium Enterprise 5 crores < Investment < 10 Crores
  • Industries involved in providing service

Status Investment done by the organization ( INR)
Micro Enterprise Investment < 10 lacs
Small Enterprise 10 Lacs < Investment < 2 Crores
Medium Enterprise 2 crores < Investment < 5 Crores

Benefits of  MSME Registration

1.   Easy to avail loans

The government has put a lot of efforts to promote small enterprises and to ensure there is no hindrance in their growth, MSME loan segments have been launched in both public and private banks which can be easily availed by organizations. The rate of interest on these loans is also less and no collateral has to be kept with the bank with loans. After registering at the MSME department, the organizations can benefit from these loans and can invest this money to grow more.

2.   Subsidized patent registration

Getting a patent registered in your organization’s name is a cumbersome process and involves a hefty amount of money. MSME registered companies can avail a discount of 50% on the fees by submitting the application to the respective ministry.

3.   Eligible for Industrial Promotion

The Government of India promotes MSME registered companies for the subsidy to Industrial Promotion which helps the companies garnering more projects and exposure to global market.

4.   Reimbursement of ISO Certification Charges

As per the subsidy process, any MSME registered organization which applies for the ISO certification will get the certification charges reimbursed. This strengthens the sector in getting the industrial process and goods to a global certified level and will help in the growth of the business.

5.   Subsidized electricity bills

The MSME registered company can submit the copy of the certification to the electricity department and can get the discount on the bills as stated by the government policies.

6.   Protection from Defaulting of Payments

Buyers of MSME registered organizations are bound to make the delivery of the payments on time. The MSME organization can ask for the interest on the delayed payments from the buyers. The buyer has to make the payment within 15 days of receiving the goods or services and if the payment is delayed by 45 days then the buyer has to pay the compound interest on the whole payment as per the rate of interest decided earlier by the companies.

7.   Other Miscellaneous benefits for MSME organizations:

Other important benefits that are provided to the MSME sector are as follows:

  • Cold chain business is provided a subsidy by the government.
  • The government provides the support to upgrade the technology and improve the quality of the good and services delivered by the MSME companies. The relevant ministries provide support in the upgrade process.
  • The credit guarantee scheme is provided to micro and small industries
  • There is a list of 20 items decided by the MSME ministry that can be manufactured by the MSME companies only.

How to Register for the MSME Certification

There is no timeframe to when the company can apply for the MSME certification. Any entity as discussed above can reach out to the MSME ministry to register themselves and avail the benefits of the schemes and subsidies. Based on the entity type, the relevant documents have to be submitted to the concerned department along with a nominal fee.

Documents Required to Register for MSME Certification

Following documents are required to be submitted to the authorities for getting registered to the MSME ministry.

  1. Copy of Aadhar card
  2. Copy of PAN card
  3. Company Registration certification and incorporation certificate of the organization
  4. PAN card of the organization
  5. Address proof of the company along with the NOC

The application can be submitted online and the documents can be deposited at the local office. Once the documents are verified by the authorities, a soft copy is released online which can be downloaded by the applicant. Hardcopy if needed can be obtained from the local office as well.

It is utmost important that the industries which are at a seed level should register themselves for the MSME certification and grab the benefits of the schemes launched by the government. As a substantial part of the annual GDP of the country comes from the MSME segment, it becomes imperative to support these industries with vital subsidies and schemes.