MSME Registration (UDYAM Registration)

MSME Registration is necessary to get Federal or State Government and Banking Sector advantages provided by the MSMED Act. Any company that is classified as a micro, small, or medium-sized business is referred to as an MSME. During the past fifty years, India’s micro, small, and medium-sized business (MSME) sector has flourished into a key driver of the country’s economic growth.

The government of India provided a significant boost to MSMEs on May 13th, 2020. One of the biggest sighs of relief comes from the government having finally updated its definition of MSME.

The new definitions do away with the difference between manufacturing and service businesses, modify investment levels higher, and include turnover criteria.

• Businesses in the manufacturing and service sectors with a turnover of up to Rs 5 crore and an investment of up to Rs 1 crore are considered micro businesses.
• The investment and revenue thresholds for small businesses have been raised to Rs 10 crore and Rs 50 crore, respectively.
• When defining a “medium enterprise,” the thresholds of Rs 50 crore in investment and Rs 250 crore in annual revenue will be used.

Merits of MSME registration

1. Free-floating bank loans: All types of small and microbusinesses in India now have access to collateral-free funding thanks to the country’s government. The programme provides financial guarantees to micro and small companies. To that end, this initiative is open to both new and established firms. The Credit Guarantee Trust Fund Scheme was established by the Government of India, Small Industries Development Bank of India, and the Ministry of Micro, Small, and Medium Enterprise. Any and all micro and small businesses can take use of this plan (credit guarantee scheme).
2. The ability to engage in global trade: The Indian government supports corporate trips to global events like expos, conventions, and conferences so that companies from all over the globe may network and learn from one another. Experiencing the more recent side of industrialization is made possible through this international partnership initiative.
3. A decrease in the interest rate charged by banks: Registered msme businesses have preferential interest rates compared to other businesses. Priority credit has been preserved for the msme industry. As a result of the increased comfort level that banks have in lending to MSME, these companies may now take advantage of extremely low interest rates on business loans. Increases of 20% in micro and small business loans over the next two years are required. Small enterprises are expanding at a pace of 10% each year. A minimum of 60% of the bank’s overall loan must go towards the msme industry.
4. Financial support for filing patent applications: For micro, small, and medium-sized enterprises (MSMEs) that are already registered with the corresponding ministry, the current laws provide a 50% fee reduction for patent registration. this encourages new businesses to experiment with cutting-edge technology and concepts. You can apply for the subsidy by contacting the appropriate ministries.
5. No taxation: Taxes might be paid on money that you would otherwise be able to save thanks to the many advantages available to you. Having a possible taxation base might be beneficial for businesses because it frees them from the need of keeping meticulous audit records and detailed books of account.
6. Safeguards against payment delays: Consumers who buy from SSIs or MSMEs sometimes delay payments. The ministry of micro, small, and medium enterprise helps these companies by letting them charge interest on late payments from customers. Such disagreements require prompt mediation and arbitration. If a buyer receives goods or services from a msme or sci-registered business, then payment is due no later than 15 days after the date of acceptance, or on or before the payment date agreed upon by both parties. If the date of payment is not specified, then it is feasible. If the buyer delays payment for more than 45 days after receiving the products or services, the buyer must pay compound interest in addition to interest (paid monthly) on the agreed-upon value. The interest rate is three times the amount announced by the Reserve Bank of India.
7. Reductions in power bills: Companies that have a msme registration certificate are eligible for money off their monthly electricity costs. This allows businesses to accept more orders and boost production without worrying about rising operational and capital expenses. The concession is available to micro, small, and medium-sized firms that apply and registration certificate to the electrical department.
8. Iso certification fees are reimbursable: Those firms that have been approved as MSMEs will not have to pay for an iso certificate if they apply to the proper authority and include their registration certificate in their submission. In order to raise the bar on how effectively MSMEs compete for contracts, iso certification is necessary. The government of India actively promotes foreign commerce by hosting international trade events such as craft fairs, exhibits, and exchange programmes. Access to these forums for international collaboration on trade-related issues with different nations and the encouragement of new business partnerships is a perk of being a micro, small, or medium firm. For micro, small, and medium-sized enterprises (MSMEs) to succeed in exporting their products and services, the government offers subsidies, tax incentives, and technical help.
9. Tenacity-Building Initiatives for Micro, Small, and Medium-Sized Enterprises: Businesses in the micro, small, and medium-sized enterprise (msme) sector can get their clean technology implementation, audit report, and product license subsidy costs reimbursed by the government. It’s done to lower production costs and boost green energy usage in factories.

If you require this service, you are requested to contact our compliance manager 08943620159 or by email at info@techmincsc.in.