THINGS TO KNOW BEFORE YOU REGISTER-MSME REGISTRATION
MSME stands for Micro, Small and Medium Enterprises. The enterprises that fall under any of these three categories are considered under this act.
MSMEs are the backbone of any economy and are an engine of economic growth, promoting equitable development for all. They are typically more labour intensive than large corporate and provide tremendous employment potential at a very low capital cost.
Therefore, the Government of India has introduced various subsidies, schemes and incentives to support and promote these enterprises through the MSMED Act.
Though registration under the Act is not compulsory but, registration is essential if you want to avail the above mentioned benefits.
Micro, small and medium sized enterprises in both the manufacturing and service sector can obtain the Registration under the Act.
The following slabs have been prescribed under the MSMED Act to determine the status of the Enterprise:
Type of Enterprise
(Investment in Plant and Machinery)
(Investment in Equipments)
Does not exceed Rs. 25 Lakh
Does not exceed Rs. 10 Lakh
Exceeds Rs. 25 Lakh but does not exceed Rs. 5 Crore
Exceeds Rs. 10 Lakh but does not exceed Rs. 2 Crore
Exceeds Rs. 5 Crore but does not exceed Rs. 10 Crore
Exceeds Rs. 2 Crore but does not exceed Rs. 5 Crore
Benefits of MSME Registration
- Collateral free loans from bank
The banks are required to compulsorily ensure that specified percentage of their overall lending is made to priority sectors as classified by Government, thus ensuring credit to these sectors.
- Reduction in Interest rates from banks
The rate of Interests for enterprise that has MSME registration is lower as compared to other enterprises. Certain targets are set for banks’ lending to the Micro and Small Enterprises.
- Very easy to get Licenses, Approvals and Registrations
It has been made very convenient for MSMEs to obtain Licenses, Approvals and Registrations. One just have to produce the MSME Certificate to the respective authority while making any application under different acts, statutes, etc.
- Waiver of Stamp duty and Registration fees
All new industrial units having MSME Registration and Expansions will be exempted from payment of Stamp Duty and Registration fees.
- Protection against delay in payment
If any micro or small enterprise that has MSME registration, supplies any goods or services, then the buyer is required to make payment on or before the date agreed upon between the buyer and the micro or small enterprise.
In case if there is no payment date on the agreement, then the buyer is required to make payment within fifteen days of acceptance of goods or services.
Further, in any case, a payment due to a micro or small enterprise cannot exceed forty-five days from the day of acceptance or the day of deemed acceptance.
- Procurement Preference Policy
The Central Government or State Government may introduce preference policies, from time to time, in respect of procurement of goods and services. These policies are to facilitate promotion and development of the MSMEs.
BASICAll Inclusive Fees
PROAll Inclusive Fees
PREMIUMAll Inclusive Fees
FAQ on MSME REGISTRATION
No document required for MSME Registration / SSI Registration. Only information provided in Online Application Form is enough.
Any entrepreneur having valid Aadhar Number can apply for MSME Registration Online.
In the interest of environment no physical copy of MSME Certificate will be issued.Government believes in paperless work.
There is no difference between MSME Registration and SSI Registration. Earlier MSME Registration was known as SSI Registration.
With a view to facilitating credit flow to the MSME sector and enhancing the comfort-level of the lending institutions, the credit rating of MSME units done by reputed credit rating agencies and it should be encouraged. Banks are advised to consider these ratings as per availability. They structure their interest rates depending on these credit ratings assigned to the borrowing SME units.
Credit rating is not mandatory but it is in the interest of the MSE borrowers to get their credit rating done as it would help in credit pricing that is cost of funds (interest and other charges etc.) of the loans.
As per extant policy, certain targets have been prescribed for banks for lending to the Micro and Small enterprise (MSE) sector. In terms of the recommendations of the Prime Minister’s Task Force on MSMEs, banks have been advised to achieve the following targets:
- 20 per cent year-on-year growth in credit to micro and small enterprises
- 10% annual growth in the number of micro enterprise accounts
60% of total lending to MSE sector as on preceding March 31st to Micro enterprises.