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MSME Scheme- Eligibility, Benefits and Registration Criteria

CA. Aagya Singhai 
Updated on 26 April 2021

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Eligibility: For Manufacturing and Service Sectors Classification:

Criteria

Micro

Small

Medium

Investment and

Upto Rs. 1 Crores

Upto Rs. 10 Crores

Upto Rs. 20 Crores

Turnover

Upto Rs. 5 Crores

Upto Rs. 50 crores

Upto Rs. 100 Crores

MSME Scheme- Eligibility, Benefits and Registration Criteria

Registration Process:

Documents required for Registration (Udyog Aadhaar Memorandum):

1. Aadhaar number of the applicant
2. Name, gender, PAN number, email id, mobile number and photo of the applicant.
3. PAN, location, and address of the organization.
4. A number of employees and the date, you are planning to start your business.
5. Bank account number and IFSC code
6. The basic business activity of the enterprise
7. NIC 2-digit code
8. Investment in plant and machinery/equipment
9. MoA /AoA/ Partnership Deed
10. Copies of Sales Bill and Purchase Bill

Step by step registration process:

1. Fill an Application form: Fill all the basic details in MSME Registration form that will include the details of your business such as company name, registration number, GST number and so on.

2. Enter Personal Details: Fill all your personal details such as name, address, PAN Card, bank account details and so on. A photo needs to be uploaded.

3. Submitted Application will be processed: An executive will review the application submitted. In case of any discrepancy, you will be notified about the process and will be required to make the relevant changes.

4. Receive Certificate on Mail: You will get a virtual certificate for MSME Registration. However, you can download a copy of the Sample MSME Certificate.

5. FEES: the entire registration process is FREE OF COST. However, there are many online portals that do the registration process on behalf of the companies at a certain fee.

Source: https://udyogaadhaar.gov.in/UA/UAM_Registration.aspx#

BENEFITS

I. Collateral Free Loans: Under CGTMSE (Credit Guarantee Funds Trust for Micro and Small Enterprises) scheme, MSME’s can avail maximum collateral free credit (Fund based / non fund based – LC, BG etc) up to of Rs. 200 Lacs from Eligible Institutions. Details have been provided under the Credit Guarantee Fund Scheme for Small Industries.

II. Protection against delayed payments: A buyer is expected to make a payment for the goods/services within the time period mentioned in the written agreement which, in no case, shall exceed 45 days from date of acceptance or date of deemed acceptance. If the buyer fails to pay within the prescribed limit, then, notwithstanding anything contained in any agreement between buyer and seller or in any law for the time being in force, he has to pay compound interest with monthly rest at three times the rate notified by RBI. Details have been provided under MSME Samadhan.

III. Subsidy on Patent Registration & Industrial Promotion Subsidy (IPS): A hefty subsidy of 50 per cent for patent registration has been provided under MSME. This can be availed by sending an application to the respective ministry. In addition to this, one of the great MSME registration benefits is to get subsidy for industrial promotion suggested by the Government.

IV. Concession on Electricity bills: Under this scheme, enterprises having MSME Registration can avail a concession in electricity bills by making an application to Electricity board along with MSME Registration Certificate.

V. Reimbursement of ISO Certification Charges: Enterprises that have MSME Registration Certificate can reimburse ISO Certificate Expenses by making an application to respective authority along with MSME Registration Certificate.

VI. 15% Credit Linked Capital Subsidy Scheme (CLCSS) for technology upgradation of Micro and Small Enterprises: provides an upfront capital subsidy for upgrading technology for new or existing Micro, Small and Medium Enterprises (MSMEs). Details have been provided under CLCSS.

VII. Credit rating support: Under this scheme (as per the turnover of the MSE) a percent of Rating Agency charges is reimbursed by Ministry of SSI through NSIC.

VIII. Overdraft facility along with Interest Rate Exemption: Businesses or enterprises registered as MSME/SSI are eligible to avail a benefit of 1% on the overdraft as part of the Credit Guarantee Trust Fund Scheme. Although this can vary from bank to bank.

IX. Preference in procuring Government Tenders: There are many government tenders which are only open to the MSME Industries. No Global tendering up to Rs. 200Crores.

X. Waiver in Security Deposit in Government: The Ministry of Micro, Small and Medium Enterprises gives following benefits to enterprises that has MSME Registration while making application for Government Tenders:

1. Issue of tender sets free of cost
2. Exemption from payment of Earnest Money
3. Waiver of Security Deposit Upto the Monetary Limit for which at the unit is registered

XI. Cheaper bank loans: The rate of interest on loan offered to MSMEs is 1-1.5% lower compared to typical business loan interest.

XII. Waiver on Stamp duty and Registration fees.

XIII. Business registered under MSME are given higher preference for government license and certification.

XIV. Specialized bank branches for lending to the MSMEs: Public sector banks have been advised to open at least one specialized branch in each district

XV. Marketing Support/Assistance to MSMEs (Bar Code): Enterprises that have MSME Registration can avail Bar Code Registration subsidy (reimbursement of 75% of the one-time registration fees for bar coding and 75% of the annual renewal fees incurred for the first three years) as per the Marketing Assistance scheme.

Source: https://www.msmeregistration.org/benefits


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