MSME registration stands for Micro, small and medium Enterprises registration. For growth of economy it is important that there small and medium enterprises should also grow and therefore to support and promote MSMEs enterprises Government of India through various subsidies, schemes and incentives promote MSMEs however to avail the benefits under the MSMED Act from Central or State Government and the Banking Sector, MSME Registration is required.
Micro, Small and Medium sized enterprises in both the manufacturing and service sector can obtain MSME Registration under the MSMED Act. Accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified in two Classes:
Any class or classes of enterprises, whether proprietorship, Hindu undivided family, association of persons, co-operative society, partnership firm, company or undertaking, by whatever name called can apply for MSME registration.
Manufacturing Enterprise: – The criteria in Manufacturing Enterprise are defined in terms of investment in Plant & Machinery. In the case enterprises are engaged in the manufacture or production of goods pertaining to any industry: –
- Micro enterprise means when the investment in plant and machinery does not exceed twenty-five lakh rupees
- Small enterprise means when the investment in plant and machinery is more than twenty-five lakh rupees but does not exceed five crore rupees
- Medium enterprise means when the investment in plant and machinery is more than five crore rupees but does not exceed ten crore rupees
Service sector Enterprises: – The enterprises engaged in providing or rendering of services and are defined in terms of investment in equipment. In the case enterprises are engaged in the providing or rendering of services pertaining to any industry
- Micro enterprise means where the investment in equipment does not exceed ten lakh rupees
- Small enterprise means where the investment in equipment is more than ten lakh rupees but does not exceed two crore rupees
- Medium enterprise means where the investment in equipment is more than two crore rupees but does not exceed five crore rupees.
Benefits of MSME registration: –
- Collateral Free loan from Bank
The Credit Guarantee Fund Scheme has been launched for Micro and Small Enterprises by the Government to make them available funds collateral free.
Reservation policy is one of the most vital benefits given to enterprises. To ensure th growth of Micro small and medium enterprises the central government has given them exclusive rights to manufacture certain products only to this sector. Central government has reserved more than 300 products exclusively from this sector.
- Tax benefits
Enterprises having MSME Registration can enjoy Tax exemptions in the initial year of business depending on business activity as mention in the scheme by Government
- Reduction of interest rate of bank
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. The banks have to follow the following:
- 40% of the total advances must go to micro and small enterprises involved in manufacturing having investment in plant and machinery up to Rs.10 lakh and for service enterprises having investment in equipment up to Rs.4 lakh.
- 20% of the total advance to micro and small enterprises should go to manufacturing enterprises that have above INR 10 lakh till INR 25 lakh investment in the plant and machinery and for service enterprises that have investments in equipment above INR 4 lakhs
- To simplify, 60% of the advances must go to micro enterprises.
Concession in electricity bill
Enterprises that have MSME Registration Certificate can avail concession on electricity bill by making application to electricity department regarding same along with MSME Registration Certificate
ISO fee reimbursement
Enterprises that have MSME Registration Certificate can get reimburse ISO Certificate Expenses by making application to respective authority along with MSME certificate
Preference in getting Government tender
Enterprises having MSME Registration get preference in procuring government tenders.
Fifty percent exemption is paying Trade mark registration
Enterprises that have MSME Registration Certificate can avail 50% exception for Trade mark registration fee by making application to respective authority
1% Exception on interest rate on overdraft
Enterprises with MSME certificate can avail 1% exemption on interest rate on Overdraft facility taken from bank
Procedure for MSME registration: –
Filling information sheet provided by Lebanon
Our team will send an information sheet containing basic details to be filled by client about themselves and their business entity.
Applying for MSME registration by our team
Once necessary information is received our team will proceed with MSME registration
MSME registration certificate
After MSME application has been filled its shall be verified by department and if everything in order department will issues MSME Certificate.
MSME registration INR 1,999