MSME REGISTRATION

Micro-Small & Medium Enterprises (MSMEs) contribute largely in the socio-economic development of our country. MSMEs come under the Ministry of Micro, Small & Medium Enterprises and are required to be registered to avail benefits under the Micro, Small and Medium Enterprises Development (MSMED) Act. MSME registration is highly important, as it enables these enterprises in availing benefits from various government-initiated schemes. MSMEs are classified in two categories, such as manufacturing and service enterprises. The terminology like MSME, SSI or Udyog Aadhar is one and same thing. In other words, there is only one registration which a micro, small and medium enterprises has to obtain and that is UDYOG AADHAR. MSME is the backbone of the modern Indian economy and is considered as the growth engine for equitable and sustainable economic development of the country. Under MSME all kinds of enterprises can obtain registration, like manufacturers the service providers are also eligible for MSME benefits. Hence they are also required to get UDYOG AADHAR Registration.


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BENEFITS OF HAVING MSME REGISTRATION CERTIFICATE

1. Collateral Free Loan From Banks

The Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGS) was launched by the Government of India to make available collateral-free credit to the micro and small enterprise sector.

2. Protection Against delay in payment

The Ministry of Micro, Small and Medium Enterprises gives protection to MSME Registered Business against delay in payments from Buyers and right of interest on delayed payment through conciliation and arbitration and settlement of dispute be done in minimum time.

3. Reduction in Rate of interest from Banks

The rate of Interest for enterprise that has MSME registration are lower as compare to other enterprises. Certain targets are set for banks’ lending to the Micro and Small Enterprises. The banks’ have to achieve a 20% growth in credit to micro and small enterprises and 10% annual growth in the number of micro enterprises accounts and 60% of total lending to Micro and Small Enterprises sector.

4. Octroi Benefits

The scheme of refund of octroi provided under the Package Scheme of Incentives, 1993 will be included in the new Scheme up to 31-3-2006 on the same pattern. Where account-based cess or other levy is charged instead of or in lieu of octroi, such change will also be eligible for refund as in the case of octroi.

5. Waiver of Stamp duty and Registration fees

At present, IT units in public IT Parks are exempted from stamp Duty and Registration fees upto 31st March 2006. Now all new industrial units having MSME Registration and expansions will be exempted from payment of Stamp Duty and Registration fees.

6. Exemption under Direct Tax law

Enterprises that have MSME Registration can enjoy Direct Tax Exemption in the initial year of business, as mention in the scheme by Government and depending on business activity.

7. Eligible for IPS Subsidy

Enterprises that have MSME Registration are eligible for Industrial Promotion Subsidy (IPS) as mentioned in the scheme.







8. Waiver in Security Deposit in Government

The Ministry of Micro, Small and Medium Enterprises gives following benefits to enterprises that has MSME Registration while making application for Government Tenders:
1. Issue of tender sets free of cost
2. Exemption from payment of Earnest Money
3. Waiver of Security Deposit upto the Monetary Limit for which at the unit is registered

9. Industrial Promotion Subsidy Eligibility

Enterprises registered under MSME are also eligible for a subsidy for Industrial Promotion as suggested by the Government.


DOCUMENTS REQUIRED FOR MSME REGISTRATION

1. Business Address Proof

If the premise is self-owned– Allotment letter, possession letter, lease deed or property tax receipt. If there is a municipal license in the business name or in the name of the proprietor, partner or director of the business, no other possession document is required to be submitted.

2. Business Address Proof

If the premise is rented– Rent receipt and a no objection certificate from the landlord is required. Also, any utility bill or document evidencing the landlord’s ownership is to be submitted.

3. Copies of Sale Bill and Purchase B

Business is required to submit copy of sale bill related to each end product that it will supply. Also, for each raw material that it will purchase, a purchase bill has to be submitted.

4. Partnership Deed/ MOA and AOA

If the business is a partnership firm, it has to submit its partnership deed. If the partnership firm is registered, it has to submit registration certificate also.
In case of a company, copy of Memorandum of Association and Articles of Association, and certificate of incorporation has to be submitted. With it, copy of the resolution passed in general meeting, and a copy of board resolution authorizing a director to sign the MSME application is also to be submitted.

5. Copy of Licenses and Bills of Machinery Purchased

In few cases, the applicant has to submit a copy of industrial license which is to be obtained by giving an application to Govt. of India. Further, all bills and receipts related to purchase and installation of plant and machinery have to be kept safe and required to be submitted on demand.

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