Micro, Small, and Medium Enterprises (MSME) Act, better known as MSME Act, was promulgated in 2006 to address the policy issues, investments, and fund problems that are impacting the MSME sector. The main objective of this act was to offer development for small and medium enterprises across the country. This sector even plays a vital role in supporting the economy of the country to a great extent. You will be amazed to witness that there are more than 6000 types of products that are being manufactured in the MSME sector.
With so many products available, MSME plays a major role in offering employment to a large number of people. It is categorized into two main domains i.e. Manufacturing enterprise and Service enterprise. The distinction between them is majorly based on investment in plants and machinery.
|Micro enterprise||Small enterprise||Medium enterprise|
|Investment < Rs 1 crore and turnover < Rs 5 crore||Investment < Rs 10 crore and turnover < Rs 50 crore||Investment < Rs 20 crore and turnover < Rs 250 crore|
Revised Classification applicable w.e.f 1st July 2020.
From this table, you can easily analyze that manufacturing and service enterprises are further bifurcated into micro, small, and medium enterprises based upon the investment they require to run smoothly.
Getting the MSME registration for the business has various benefits waiting for you, be it the easy sanction of bank loans, lower rate of interest, excise exemption, etc. Besides that, you can easily register for MSME without spending even a single penny. You just need to fill the form present on the Udyog Aadhar website and get your registration started in a hassle-free manner. Just by following the step-wise approach on this website, you can easily get your business registered for MSME and avail of a large number of benefits that it has in store for you.
There are various benefits to getting MSME registrations for business purposes. Some of the notable benefits are as follows:
1. Facility of collateral-free loans from banks
If your enterprise is registered with the MSME then according to the Credit Guarantee Fund Scheme, the registered MSMEs can avail the benefits of the collateral-free loans from the banks without any hindrances.
2. Lower interest rates and greater access to credit
When you are starting a business and want to get the loan sanctioned then it becomes a very difficult task to proceed with. But, on the other hand, if your business is registered for MSME then you will not only get the loan easily sanctioned but you will also need to pay a very lower rate of interest for it.
If you have the MSME registration then you get various tax benefits that are very hefty to settle otherwise. Besides that, you don’t even need to go through the various audit procedures.
4. Industrial promotion subsidy
If you have the MSME registration then your enterprise also becomes eligible for various industry promotion subsidies that the government keeps on launching from time to time.
5. Protection against delayed payments
If the enterprise has the MSME registration then you remain on the safer side to protect the business against delayed payments. If your client doesn’t settle the bill within 45 days, then they have to pay the bill in addition to the interest for the MSME registered business.
6. 50% subsidy on patent registration
For the MSME registered enterprises, you can avail of the benefits of the 50% subsidy on the patent registrations.
7. Concession in electricity bills
By filling the designated forms, the enterprises registered with the MSME can avail concessions in the electricity bill without facing any trouble.
Getting the MSME registration gives a boon to a business and can prove to be a great asset for various benefits. Just by having a single registration number, you get the opportunity to avail yourself of the benefits that other business owners find hard to get. Besides that, getting the MSME registration for the enterprise is a hassle-free process. So, just register for this if you own micro, small and medium businesses and enjoy various benefits.
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