MSME stands for Micro, Small, and Medium Enterprises. The Government of India does the grouping of the enterprises. The businesses eligible under the categorization of MSME receive the state benefits. The government of India considers MSME as the backbone of the economy. It’s not an exaggeration, as most of the companies are part of MSME.
The economy of the country grows when the MSME grows. According to government data, the MSMEs provide 45% of the total employment in India. It’s vast, and that’s why such enterprises are a game-changer.
Professional MSME Registration Services in Mumbai- Eligibility and Documents
What is MSME?
MSME means Micro, Small, and Medium Enterprises. It’s a categorization for the different sizes of the business. There are millions of companies in India. Most of them are part of the MSME initiative by the government. The MSME act came into force on 2nd October 2006. The companies are not bound by the law to register under the MSME act. But it is beneficial for the eligible companies to reap the available benefits.
The registration of the companies is straightforward, according to the Companies Act. When the companies attain the eligibility levels of the MSME act, they can register under the same. There are tons of economic, financial, and administrative benefits for MSME. If you are keen to know more about the same, you are in the right place. Here, you’ll learn a lot about Micro, Small, and Medium Enterprises.
Classification of Micro, Small and Medium Enterprises
The government of India has classified the MSME. The classification determines the eligibility factors for the enterprises. Here are the qualification factors that apply to MSMEs.
There are two main categories of the MSME sector. The first one is the manufacturing industry. The other one is the service sector. So, the enterprises in these two sectors are eligible for being part of MSMEs.
Eligibility For Micro Enterprises
For the manufacturing sector, the enterprises with a minimum of Rs. 25 Lakhs of investment in plant and machinery is expected. For the service sector, the minimum of Rs. Ten Lakhs in investments is required. The companies passing the requirements are eligible for registering as Micro Enterprises.
Eligibility for Small Enterprises
For the manufacturing sector, the minimum investment required is Rs. 5 Crores. For the service sector, the minimum of Rs. 2 Crores investment is needed. Eligible companies enterprises under MSME Act.
Eligibility for Medium Enterprises
Medium enterprises have the potential of becoming the industry giants. For the manufacturing sector, the investment of no more than Rs. 10 crores is required. For the service sector, the investment of less than Rs. 5 crores is required. The investment is necessary for plants, machinery, and assets.
What are the benefits of MSME Registration?
There are numerous benefits of registering under the MSME act. If you are willing to register, then you should know the benefits. Here are a few advantages of registering as the MSM Enterprise in India.
Cheaper Bank Loans
The banks do offer cheaper loans to the MSMEs. The interest rate is very low for eligible enterprises.
The companies are in dire need of tax rebates. The manufacturing and service MSM enterprises receive many tax rebates from the government.
The government is providing preference to the MSME enterprises. Such companies get preference in government tenders and licensing processes.
There are numerous projects, which require only the MSMEs to apply. So, there is very little competition for the MSM companies.
Collateral Free Loans
The MSMEs don’t require any collateral for taking the loans. Under the special concession to the companies, Banks don’t ask for a guarantee for providing the loans.
The companies registered under the MSME Act access to the interest-free overdraft on business current accounts. Only the authorized banks are eligible to provide such an overdraft.
Documents for MSME Registration
For the registration, you should keep the documentation ready. So, this is the list of all of the required documents for MSME registration.
- Address Proof of the Business
- Sales Bill and Purchase Bill Photocopies
- Memorandum of Association, Articles of Association, or Partnership Deed.
- Bills of Machinery, Assets, and Investment Proofs.
Frequently Asked Questions on MSME Registration Services in Mumbai
#Q1 – Is the Aadhar Card of Partners / Directors is Mandatory?
Yes. Aadhar Card of the partners or directors is mandatory for MSME Registration. In case the Director is a Foreign National, then the passport is necessary.
#Q2 – Can New Businesses Apply for Udyog Aadhar/ MSME Registration?
New Businesses can apply for Udyog Aadhar and MSME Registration. They can apply for Udyog aadhar anytime. But for MSME Registration, they need to be eligible for the same. So, If the businesses have sufficient investments in plant and machinery, then they can apply for MSME registration.
#Q3 – Can Trading Companies Apply Under MSME Act?
The MSME Act applies to the Manufacturing and Service sector companies. The trading companies cannot be a part of MSMEs in India. So, they are not allowed to apply under the MSME Act.
#Q4 – How Long is MSME Certificate is Valid?
The MSME Registration certificate is valid for five years. The registrant has to fulfill the MSME eligibility to renew the MSME certificate for another five years.
#Q5 – Is MSME and Udyog Aadhar Registration Same Thing?
No. MSME Registration and Udyog Aadhar Registration are different things. Udyog Aadhar is the UIDAI initiative, which provides a unique 12 digit number to enterprises. So, Udyog aadhar is a necessary document for the MSME registration. They are not the same, but interdependent.
Professional MSME Registration Services from Efiling.co.in
The registration procedure for MSME is pretty tedious. You may have to get the expert assistance for the registration. If not completed correctly, the government may reject your application. That’s why it is essential to get professional help from Efiling.co.in. The experts at Efiling.co.in will ask for all of the documents and will complete the registration process on your behalf. MSME Registration would take no more than a few days. You only have to be eligible for registration. So, it will be an effortless process to get MSME registration done from Efiling.co.in.