The MSME sector in India was established with an underlying aim to nurture the existing and up-and-coming Micro, Small and Medium Enterprises. In the past few years, this sector has largely contributed to the overall growth and development of the country, making it one of the backbones of the Indian economy. From manufacturing, imports, and exports, to fuelling employment and production, the MSME sector is playing a prominent role in every aspect.
Also known as the Small Scale Industry (SSI) in India, the MSME sector fuels the economic growth of the country and the government is leaving no stone unturned in helping business owners scale their business, provide working capital, real estate, or even help speed up licensing. At present, it is not mandatory for all MSME identified businesses to be registered with MSME under the MSME Act (Micro, Small and Medium Enterprises Act). There are several benefits you can avail by getting registered under the MSME Act some of these key benefits include-
- It will become easier for businesses to clear MSME loan eligibility criteria and avail business loans with top banks, NBFCs, and other financial institutions.
- Bank loans are available at a much more reasonable rate for businesses registered as MSMEs, with competitive interest rates, flexible repayment tenure and lesser documentation requirements.
- If your business completes MSME registration then it can carry forward the loan or credit limit up to 15 years, as opposed to 10-year cap on credit tenure for other businesses.
- Some MSMEs can avail exclusive government tenders also if they are eligible for the same.
- Lower cost for business or industry set-up, quicker access to patenting, easy access to MSME loans and other government credit facilities are also available post MSME registration.
- Preferred treatment for licensing, certification, and other approvals from the government of India.
- Businesses that successfully register as MSME can also settle an unpaid amount with a one-time settlement option.
- Various other credit facilities and government schemes like the Credit Linked Capital Subsidy Scheme, which allows MSMEs to replace their old and obsolete technology with the latest, capital subsidy, and many such benefits.
There are specially designed women entrepreneurship government schemes for MSME women business owners, which offer them capital, training and counselling needed to run the business smoothly and effectively. More and more businesses that qualify as MSME enterprises are now stepping up and completing their MSME registration in order to avail all of these benefits.
What is the MSME Registration Process?
For businesses who are looking to register themselves in the MSME sector, there are certain pointers they must keep in mind and eligibility criteria they must fulfil to be registered. Take a look at some of the following pointers that existing and new entrepreneurs must keep in mind while completing the registration process for their businesses as MSME firms under the MSME Act:
- Any individual is eligible to fill out the MSME registration form for one or more than one industry.
- MSME registration form must be filled out by business owners, online or offline to register their business under the act.
- Applicants can provide self-attested certificates for registration
- Business owners need not pay any registration fee when registering their business under MSME Act.
- Fill out all details of the form, like personal information, business related information, bank details, etc. This will help determine the MSME loan eligibility of the entrepreneur as well.
Here is a list of some of the necessary documents that need to be submitted for MSME registration:
- In case of rented property – Rent receipt, NOC from the property owner or landlord, utility bill or any other similar bill are needed as proof.
- In case of self-owned property – Possession letter, Allotment letter, Lease deed, or Property Tax receipt to prove ownership. A municipal license against the name of the business or business owner is also sufficient.
- Copies of sale and purchase bill receipts
- Bills of the equipment, machinery purchased towards the business.
- Copy of licenses held by the business
Once the registration form is filled and necessary documents are submitted or uploaded by the business owner, their application will be pending for approval. Upon approval, the registration number of the business will be shared with the business owner. MSME registration is not yet mandatory, however, it is beneficial for businesses to register as MSMEs to avail the many benefits offered by this plan.
MSME sector plays a significant role in uplifting the country by increasing production, producing jobs, and contributing to the overall growth of the country. And that is why, the government of India has also taken measures to facilitate the growth and smooth functioning of these MSMEs by introducing various schemes. Be it MSME registration for a business or MSME loan eligibility criteria, there are government schemes in place to help businesses with all their needs.