Small enterprises known as MSMEs (Micro, Small, and Medium Enterprises) are what propel our economy ahead. In developing nations like India, MSMEs are the backbone of the economy and play a significant role in the socioeconomic advancement of the nation. The Micro, Small, and Medium Enterprise (MSME) sector in India has the second-highest employment rate after agriculture. It contributes 30% to the country’s GDP. The MSME sector is therefore essential to our country’s economic growth. Government support for small and medium-sized enterprises has been around for a while. Additionally, the government works extremely hard to support MSMEs. That is why MSME Registration Online is important and advantageous.
10 Key Advantages of MSME Registration
The section that follows lists some of the key advantages of MSME registration in accordance with the relevant legislation.
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Bank Loans With No Collateral
All small and microbusinesses in India now have access to collateral-free loans thanks to government initiatives. This initiative assists micro and small businesses with funding applications and business loan applications. Benefits from this programme are available to both new and existing businesses. The Credit Guarantee Fund Trust for Micro and Small Enterprises was created by the Small Industries Development Bank of India (SIDBI), which provides loans without collateral.
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A decrease in bank interest rates
An MSME registered firm benefits from a lower financing rate compared to other enterprises. For the MSME sector, priority financing has been maintained. Since bank lending to MSMEs has reached a certain threshold, they benefit from cheap business loan interest rates. Within the next two years, credit to micro and small firms must rise by 20%. A 10% annual growth rate in microbusinesses is been seen. The bank’s total loan must be distributed to the MSME sector at a minimum of 60%.
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Defense Against Postponed Payments
Customers who purchase goods or services from a registered MSME must make payment on or before the agreed-upon due date or within 15 days of the vendor shipping the item they bought. If payment is not received within 45 days after acceptance of the items or services, the buyer will be required to pay interest on the agreed-upon price. The interest rate is thrice what the Reserve Bank of India’s stated official rate is. One of the best benefits of MSME registration is this.
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Granting of Patents with Subsidies
A sizable 50% subsidy has been offered to the business that has the certificate of registration from MSME, or a maximum of 15 lakh INR per innovation, whichever is smaller. By submitting an application to the relevant ministry, this incentive is available for patent registration.
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An advantage at international trade shows
Financial assistance to state and federal government departments, firms, registered associations, and organisations connected to MSME for the dispatching of MSME business delegations abroad under the International Cooperation Scheme.
Its goal is to identify new innovative products that MSMEs can create, as well as to encourage MSMEs in India to take part in international expositions, trade shows, and buyer-seller interactions in order to learn about new technological developments. It also organises international workshops and events that are helpful to the MSME sector.
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Compensation for ISO certification
MSME registered businesses will not be charged for any ISO certificate costs if they submit an application to the appropriate authorities together with their registration certificate. To increase the standards of MSMEs’ efficiency throughout the bidding process, ISO certification is required.
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Startups don’t pay income taxes
For the first three years out of seven, startups are entitled to a 100% tax exemption on earnings as long as their annual turnover in a fiscal year does not exceed Rs 25 crores. For the remaining three years out of seven, no income tax is due. It is allowed by the Income Tax Act. For the purposes of this benefit, companies that have been in existence for up to 10 years are still regarded as startups. In addition, the minimum alternative tax (MAT) credit can now be carried forward for up to 15 years rather than just 10 years. A startup gains financially from this MSME registration throughout its early years.
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Electricity bill reduction
With an MSME Registration Certificate, any business or industry is qualified to get discounts on their power costs. This frees up businesses to enhance production and take on more orders without worrying about capital expenses like electricity and maintenance. Micro, small, and medium-sized firms can apply for the concession by submitting a request to the Department of Electricity along with their MSME registration certificate.
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Giving priority when requesting licences and approvals
Businesses are given preference and the application process is eased for them when they submit a Certificate of MSME Registration when seeking for licences, permits, or registrations from the relevant authorities in any area.
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15% CLSS Subsidy
There is a programme run by the Department of Micro, Small, and Medium Enterprises (MSME). The Credit Linked CGSTI Subsidy Scheme is a programme run by the Department of Micro, Small, and Medium Enterprises (MSME) for modernising business technology (CLCSS). The Indian government launched this MSME registration incentive in 2000, and it offers a 15% discount up to a maximum of Rs. 15 lakhs. The scheme’s maximum loan limit is Rs. 100 lakh, which is used to determine subsidies.
Documents Required for MSME Registration Online
Please refer to the paperwork provided below in order to register for MSME in India.
- ID card, Aadhaar
- Deck of Pan
- a leasing contract
- property-related documents
- a cancelled check (sale or purchase invoice) Business Registration
Additional Papers/Documents: Evidence of Registered Business Address
- Articles of Association (MoA)
- Association Bylaws (AoA)
- copies of the sales and purchase invoices
- Statement of Partnership
- Copies of licences acquired and sales receipts
Process for Registering an MSME
MSME applicants must complete the one-page “MSME/Udyam Registration form” and adhere to the MSME registration procedure.
The following details must be filled out by applicants on the application form:
- Aadhar cards distributed to people in number
- The Name of the Sector
- The location of the company’s headquarters
- Details about a bank account
- Applicants will get an Udyam Registration Number after submitting the MSME registration application on Meraprofit.
Conclusion
A few advantages of MSME registration, include schemes, spending plans, credit-free loans, and other elements. It acts as a standard for the worldwide and international industrial turnover in addition to being a motivator. The administrations of the federal, state, and union territory have developed unique programmes that offer a range of advantages through various mechanisms. These businesses are being urged to grow and boost the national economy. The government’s perks for MSME registration are available to all kind.