MSME in India: MSME Registration Benefits and Process

MSME in India

MSMEs are Micro, Small, and Medium Enterprises (literally what the acronym stands for), i.e., small businesses that, by being the most numerous, are the backbone of economies all around the world.

MSMEs in India are defined as enterprises in Manufacturing and Services with investment and turnover lower than Rs 50 crores and Rs. 250 crores, respectively. The individual sub-segments are classified as  under:

• MICRO: Investment less than Rs. 1 cr., turnover less than Rs. 5 cr.
• SMALL: Investment less than Rs. 10 cr., turnover less than Rs. 50 cr.
• MEDIUM: Investment less than Rs. 50 cr., turnover less than Rs. 250 cr.

The MSME in India is a vital unit of the economy. In fact, MSMEs are crucial enough that there is a dedicated MSME ministry. The ministry’s Aug 2021 report states the following key highlights of the contribution of MSME in India to the economy:

• Over 6 crore (60 million) units
• Employing 11. 1 crore (111 million) people (second largest after agriculture)
• 30 % of Gross Value Added in India’s GDP in 2019-20
• 9 % of All India manufacturing gross value output in 2019-20
• 5 % of All India exports in 2020-21

MSME Registration Benefits

Given the above, it is not surprising that the government incentivizes the MSME sector with various economic measures. The Government of India, for example, has given suitable weightage to MSMEs in its special economic package announced in May 2020.

Some of the benefits of an MSME registration provided by the government include:

• Collateral free loans
• Equity infusion through MSME Fund of Funds
• Subordinate debt for MSMEs
• Guaranteed Emergency Credit Line (GECL) facility to MSME borrowers, including interested MUDRA borrowers
• Special concessions during registration of enterprises on Government e-market portal
• Ease of obtaining licenses, approvals, and registrations
• Special consideration in international trade fairs
• Bar Code registration subsidy
• Subsidy on NSIC Performance and Credit ratings
• Protection against delay in payment
• Reduced rate of interest from banks
• Concession in electricity bills
• Reimbursement of ISO Certification expenses
• Preference in procuring Government Tenders
• Subsidy for patent registration

Over and above this, MSME registration is actively encouraged with increasing ease of the entire MSME registration process, including with MSME registration online. Hence, while not mandatory, it is important for small businesses to go in for an MSME registration and avail of these benefits. With MSME registration online now, the effort is also hugely lessened.

The MSME Registration Process

The MSME registration process begins with checking the criteria for MSME registration. Once your eligibility for MSME registration is established, MSME registration is done for two categories:

1. New businesses who have not registered
2. Businesses registered as Udyog Aadhar Memorandum (UAM)

The documentation/ information requirement is minimum.</

While the Government has made the MSME registration process smoother, the process still requires expertise and guidance, particularly in the application review phase where the competent authority often has queries or objections.

Getting your MSME Registration with MBG Corporate Services

As a leading name in consultancy, advisory, and business services in India, MBG Corporate Services is perfectly placed to get your MSME registration done smoothly, efficiently, and cost-effectively. From eligibility for MSME registration and the criteria for MSME registration to how to get an MSME registration certificate online, we have deep expertise in the entire MSME registration process.

At MBG, our MSME registration services include:

• Assistance with eligibility for MSME registration: Identifying if your enterprise falls under the Micro, Small or Medium Enterprises
• Drafting of ancillary documentation such as board resolution for authorization, letter of authorization, etc.
• Collation of other supporting documents such as Registration Certificate of Establishment, Proof for Commencement of Business, GST Certificate, and other documents
• Submission of requisite application and supporting documents on the web portal
• Addressing queries or objections as may be raised by the competent authority during the process of application review
• Obtaining MSME registration upon acceptance of the application

Contact us for more on how we can help with your MSME registration.

Download Our Service Deck:- MSME Registration