Procedure for MSME Registration in India
MSME stands for Micro, Small and Medium Enterprises. In a country like India, MSMEs serves as the backbone of its economy as it contributes a large amount in the total GSP of the country. MSME are classified as of two types i.e., service enterprise and manufacturing enterprise. MSME registration became operation in the year 2006 in India. However, it is not yet a mandatory or compliance requirement but still MSMEs are advised to get themselves registered in order to take the benefits of the schemes provided by the government. It facilitates, promotes and develop healthy competitiveness environment for such entities. Also, in the announcement of Budget 2019, the government has decided to give subvention of 2% interest to MSMEs having GST Registration on Rs. One Crore incremental loans under the MSME Credit Scheme.
Benefits of MSME Registration:
The Micro, Small and Medium Enterprises can be benefited from having themselves registered under MSME. These are the following benefits of getting MSME Registration-
- They are given higher preferences for certifications and license from the government departments.
- For non-paid amounts of the MSME, there is only one-time fee for settlement.
- Once, a business gets MSME Registration it becomes easy for them to set up the industry or to get a patent done at lower costs. This is because they are being provided with many available concessions and rebates.
- They are offered various rebates in tax.
- Many tenders from the government are actually open to just MSMEs.
- They are easy accessibility to credit in the market.
- With MSME Registration the loans from banks become really cheap. This is because the interest on such loans is as low as 1% to 1.5%, much cheaper and lower than regular loans from banks.
- They are also allowed to carry forward the Minimum Alternate Tax (MAT) credits not for 10 years but up to 15 years, time-period.
Process of MSME Registration
The registration process for MSME is easy and accessible. The steps involved in MSME Registration are as follows-
- In both online and offline mode, the owner of small and medium scale industry has to file a single form for registration. Even if the person wants to have MSME Registration for more than one industry, they can do than in one single or individual registration.
- Fill in the common information and details in the form.
- Upload the required documents along with the filled form.
- A self-certified certificate can be provided by the person getting the MSME Registration.
- Once the form duly filled is uploaded or submitted, the person receives their registration number in a few days. It is to be noted that no fee is charged in the whole MSME Registration process.
Documents required during MSME Registration
The following documents are required to be uploaded or submitted along with the MSME Registration form-
- Copy if the sale bill- Copy of bill of each and every product supplied or sold is to be submitted.
- Copy of the purchase bill- Submission of bill of purchase of all the raw materials by the business entity.
- Proof of address of the place of business- It can the lease agreement, property tax receipt, possession or allotment letter. In case of rented property, no-objection certificate from the property owner and the receipt of rent is required.
- Udyog Aadhar Registration certificate- The government has recently introduced the concept of Udyog Aadhar Registration for MSMEs. If a copy of the same is submitted with the registration application, it really fast tracks the registration process.
- Partnership deed in case of partnership business- In case the enterprise is a partnership business then partnership deed is to be presented along with form of MSME Registration. Also, if the firm is registered, the registration copy is to tagged along.
- Memorandum of Association (MOA) and Articles of Association (AOA)- In case it is a company, then both MOA and AOA, incorporation certificate of the company, copy of passed resolution in the company’s general meeting and board resolution to authorize a signatory for signing the application of MSME Registration are to be submitted.
- Copy of the bills of purchased machinery and licenses- All bills and receipts of purchasing and installing the machinery and plant and licenses issued from the government are to be uploaded as well.