Small Business Benefits of MSME Registration

Small Business Benefits of MSME Registration

The Ministry of Micro, Small, and Medium Enterprises (MSME) is an acronym for the Ministry of Micro, Small, and Medium Enterprises. It is the backbone of the economy in many developed countries, such as India. In India, it is also known as “THE Development Driver.”

The amendment act ALLOCATION OF BUSINESS RULES,1961, established the Ministry of MSME on May 9th, 2007. The Indian government unveiled the Udyam Registration Platform, a new MSME registration portal, on July 1, 2020. It was previously referred to as the Udyog Aadhar/MSME Registration Portal. You may use our Udyam registration portal to register your manufacturing or service sector company in India.

MSME Enterprise precision:

  • MICRO UNITS are companies with investments of up to Rs. 1 crore and a turnover of less than Rs. 10 crore.
  • SMALL UNITS are businesses with investments of up to Rs. 10 crore and a turnover of less than Rs. 50 crore.
  • MEDIUM UNITS are companies with investments of up to Rs. 50 crore and a turnover of less than Rs. 250 crore.

Benefits of MSME:

  1.  Loans without security: The government has implemented a number of policies for MSME/SSI that enable them to obtain credit without having to put up any collateral. The initiative to provide collateral-free loans is pursued by the Government of India, SIDBI (Small Industries Development Bank of India), and the Ministry of Micro, Small, and Medium Enterprises under the name The Credit Guarantee Trust Future.
  1. Concession on Electricity: Businesses enrolled under the MSME Act will get a discount on their energy bills, which is one of the most basic MSME registration advantages.
  1. Reimbursement of ISO Certification Costs: An MSME that has been licenced will claim reimbursement for expenditures related to ISO certification (International organisation of standardization).
  1. Protection against Delayed Payments: The government has stepped in to assist by offering reimbursement insurance. Currently, MSME allows company owners and companies to receive interest on fees that have been delayed from customers.
  1. Interest Rate Allowance and Overdraft Facility: As part of the credit guarantee trust programme, companies who are licenced under the MSME act are entitled to earn a 1% discount on their overdraft. It can differ from one bank to the next.

MSMEs include retail and wholesale trades:

The retail and wholesale industries were left out of the MSME umbrella. Under the modified guidelines, MSME has issued an order classifying retail and wholesale trade as MSME and providing them with priority sector funding based on RBI criteria. The amended criteria will benefit 2.5 million retail and wholesale operators.

The government declares retail and wholesale trades to be MSMEs.

Shri Nitin Gadkari, Minister of MSME, Road Transport and Highways, today announced updated MSMEs rules, which include retail and wholesale trades as MSMEs. In a tweet, he stated, “We are dedicated to developing MSME and making them engines for economic growth under the leadership of PM Shri Narendra Modi Ji.” The updated guidelines, according to Shri Gadkari, would help 2.5 crore retail and wholesale traders. According to him, retail and wholesale trade were previously excluded from the MSME program however, under the new rules, retail and wholesale trade will now be eligible for priority sector financing under the RBI guidelines. Retail and wholesale trades will be able to register on the Udyam Registration Portal as a result of the updated criteria.

MSMED Act, 2006: Activities (NIC code) for Udyam Registration -Addition of Retail and Wholesale Trade-

  1. This Ministry’s Office memorandum on the topic of “Activities (NIC codes) not included under MSMED Act, 2006 for Udyog Aadhaar Memorandum (UAM) registration” Certain actions were not allowed to be registered on the UAM Portal. For Udyam Registration, this Office memorandum was further approved. Certain modifications were made, clarifying that NIC codes 45, 46, and 47, as well as the activities associated with these NIC codes, are not authorised for registration in the Udyam Registration Portal.
  1. After receiving several submissions, the government decided to classify retail and wholesale transactions as MSMEs, allowing them to register on the Udyam Registration Portal. Benefits to retail and wholesale trade MSMEs, on the other hand, will be limited to Priority Sector Lending.
  1. As a result, the following are the new activities that are eligible under NIC Codes 45, 46, and 47:
  • 45 Motor car and motorbike wholesale and retail commerce, as well as repair
  • 46 Except for motor cars and motorcycles, wholesale trading
  • 47 Except for motor vehicles and motorcycles, retail trade
  1. The aforementioned three NIC Codes, as well as the activities listed against them, are eligible for Udyam Registration.
  1.  Enterprises that have an Udyog Aadhaar Memorandum (UAM) under one of the following three NIC Codes can now migrate to the Udyam Registration Portal or file a new Udyam Registration.

Suggested Read- udyam registration certificate

Documents Required during MSME Registration Process:

  • Your Aadhaar Card Number.
  • Only the PAN Card and GSTIN are required for company registration.
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