MSME-Law and Registration

• Definition: The definition of MSME as per Micro, Small and Medium Enterprises Act, 2006 (as amended) is as follows:

• Micro Enterprise- where the investment in Plant and Machinery or Equipment does not exceed one crore rupees and turnover does not exceed five crore rupees;
• Small Enterprise- where the investment in Plant and Machinery or Equipment does not exceed ten crore rupees and turnover does not exceed fifty crore rupees;
• Medium Enterprise- where the investment in Plant and Machinery or Equipment does not exceed fifty crore rupees and turnover does not exceed two hundred and fifty crore rupees.

• Benefits to MSME in India:
• Availability of soft and easy loans on lower rate of interest.
• Collateral free loans because often, MSME is owned by small scale entrepreneurs who do not have fixed assets for security.
• Reimbursement of ISO certification cost.
• Protection against delayed payments- Timeline of 45 days is notified by law for releasing payments to them (from the date of acceptance of goods or services). If there is delay in receiving payments, then the interest should be paid by the buyer to MSME and the penal interest chargeable for delayed payment to a MSME enterprise is three times of the bank rate notified by the Reserve Bank of India.
• Half of the fee is charged by Intellectual Property Rights Registry on application of trademark or patent.
• There are various sector wise Industrial Promotion Subsidies that are provided by Government of India.
• 100% income tax exemption for few years in certain cases.
• Various Export Promotion Schemes are launched from time to time with an aim to boost MSME sector.

Apart from the above given, there are numerous other benefits under different laws that are allowed to these enterprises. Hence, if the enterprise falls under any of the above given criteria, they should get themselves registered online.

• Registration Process: MSME Registration is also called Udyam Registration. The registration process is as follows:
• Visit the website https://udyamregistration.gov.in/UdyamRegistration.aspx
• Get Aadhaar verification done of the entrepreneur. Entrepreneur here means proprietor of a proprietorship firm, managing partner of a partnership firm, karta in case of HUF and in case of company, LLP, society or trust, the authorized signatory.
• Complete the profile by mentioning Business name, Unit name, address, NIC code of products, Asset Value, Turnover, number of employees etc. A technical point to note here is that it is better to use Google Chrome browser otherwise glitches may happen during geotagging.
• Finally submit the form by putting last OTP.

Udyam Registration Certificate is generated immediately. Hence, it is hassle free and full of other benefits.