All The Benefits Of Registering Your Business As MSME

Micro, Small and Medium Enterprises or MSME gained prominence in the service providing and manufacturing sector when the government introduced a new bill in 2018. The bill defined MSME units based on their annual turnover.

Backbone of GDP

MSMEs play a great role in the nation’s revenue generation and foreign currency earning. The below are the contribution by the sector.

Manufacturing    45%

Exports    40%

GDP       8%


There are an estimated 6,20, 55, 865 MSMEs operating in the country as per government reports.

Need For MSME Registration

There are a number of benefits for registering a business in the service industry or manufacturing industry as an MSME unit.

All MSME units are automatically covered by Credit Guarantee Fund Trust for MSMEs, a government institution. This means that MSME units are eligible to get loans without giving collateral securities. 

What Are The Benefits Of Registering My Business As An MSME Unit?

Before learning the benefits of an MSME unit, let us have a look at the type of classification based on turnover.

Classification

Annual Turnover

Micro

5 Cr

Small

5 Cr to 75 Cr

Medium

75 Cr to 250 Cr

 

1. Reduced OD Rate of Interest

All MSME units are eligible to get a deduction of 1% for over drafts from financial institutions.

2. Atmanirbhar Bharat Scheme

All units that have a turnover of 100 crore rupees or more can have certain benefits on their outstanding loan dues for up to 25 crore rupees. It is better to have a detailed discussion with an able financial consulting company to learn all the details and reap maximum benefits as per their expert advice. 

3. Mechanism For Delayed Payments From Buyers

In case the debtors of MSME units delay payments, an interest can be collected. Government has also put in a arbitration and conciliation mechanism for bad credits.

4. Monopoly For MSMEs In Government tenders

To counter foreign competitions, global tenders have been banned for up to 200 crore rupees.

Credit Guarantee by government was mentioned at the beginning. This and many other benefits are available for MSMEs. All of them can be learned from an experienced consultancy company. 

How To Register AN MSME Unit

You need to get all the required documents digitalized before beginning the registration process with the Udyog Aadhaar website. The following documents should be uploaded as and when prompted for:

i) Name of Business.

ii) Aadhar cards of promoters.

iii) PAN card of the unit.

iv) Detailed investment figures.

v) Details of annual turnover.

vi) Mobile number linked with Aadhaar.

vii) Date of commencement of business with proof.

viii) Bank statement.

ix) MOA/AOA or partnership deed as applicable.

x) Bills of purchases and sales.

xi) Licenses.

The Steps of Online Registration

1. After entering Aadhar details OTP will be sent to the registered mobile number.

2. Udyam Registration. This include the details of plant and machinery and personal information.

3. The above process will generate another OTP. Enter that into the correct box.

Once the above process has been completed, the registration certificate will be dispatched in a few days.

Lack Of Documents

In case, you are yet to obtain a PAN card, the government has taken care of that possibility too. A reputed MSME expert will guide you through all the processes after understanding your status.

Drafted By:
CS.A.Maniraj.,B.Com.,ACS.,CA(Fin), Independent Director 
Certified CSR Professional., Certified GST Professional.