Micro, Small, and Medium Enterprises (MSME) are governed under the Micro, Small, and Medium Enterprises Development (MSMED) Act, which was passed in 2006.
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The Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006 was enacted by the Indian government. On October 2, 2006, it became operational. It was created to help micro, small, and medium-sized businesses become more competitive by promoting, facilitating, and developing their competitiveness. The government has set specified turnover and investment restrictions to determine whether an organization fits into the micro, small, or medium category in order to determine whether the MSMED Act applies to it.
Micro, small, and medium enterprises are defined as follows under this Act:
- A microbusiness is one that employs less than ten people.
- Industry of Production and Manufacturing – Plant and machinery investments are limited to Rs. 25 lakh;
- Service Industry – The investment in equipment and machinery does not exceed Rs. 10 lakh.
- A tiny business is one that, among other things.
- Industry of Production and Manufacturing – Plant and machinery investment above Rs. 25 lakh but does not exceed Rs. 5 crore;
- Industry of Service – Plant and machinery investments total more than Rs. 10 lakh but do not exceed Rs. 2 crore.
- A medium-sized business is one that, among other things.
- Industry of Production and Manufacturing – Plant and machinery investments total more than Rs.5 crore but do not exceed Rs.10 crore.
- Industry of Service – Plant and machinery investment exceeds Rs. 5 crore but does not surpass Rs. 10 crore.
Who Is Eligible To Register As An MSME?
- According to the above-mentioned criterion, any micro, small, or medium-sized business entity can apply for MSME registration.
- Limited liability partnerships (LLP), private limited corporations (Pvt. Ltd.), one-person companies (OPC), proprietorship firms, and public companies can also register as MSMEs.
- MSME registrations can be obtained regardless of whether the company is in the manufacturing or service industries.
- MSME Registration can be applied for online by any entrepreneur who has a valid Aadhaar number. For the time being, an Aadhaar number is required for the issuing of an MSME Certificate.
Is it necessary to submit an application for MSME registration?
Although MSME registration is not required, it is advantageous to have one’s firm registered because it provides numerous benefits in terms of taxation, credit, and loans. In addition, when compared to other businesses, the registered ones have reduced interest rates on loans.
What Is The Udyog Aadhaar Number?
You will receive a Certificate of MSME Registration with a 12-digit unique number once you have obtained MSME registration. You will have MSME registration in your hands once you have this 12-digit Udyog Aadhar Number for your Micro, Small, or Medium Scale Industry.
What Are The Benefits Of Registering A MSME?
The MSMED Act was created to encourage, support, and increase the competitiveness of micro, small, and medium-sized businesses. In the first year of business, all new industrial units with MSME Registration and expansions are exempt from paying Stamp Duty and Registration costs, as well as Direct Tax Exemption.
Apart from that, there are a number of advantages that you would not be able to obtain without MSME registration. Here are some more advantages of MSME registration:
- MSME can take advantage of a variety of tax breaks.
- Many government tenders are only open to small and medium-sized businesses.
- Many rebates and concessions are available once you register as an MSME, and the cost of obtaining a patent or trademark registration (for a certain category), for example, or the cost of starting a business is significantly reduced.
- MSME has easy credit availability. It is permissible for public sector banks to classify their MSME general banking branches as specialist MSME branches.
- This is to ensure that this sector as a whole receives better service.
- A composite credit ceiling of Rs.1 crore can be obtained under the RBI Master Circular on lending to the MSME sector, dated July 1, 2010.
- Bank loans for MSME-registered businesses become more affordable. The interest rate is significantly lower than that of ordinary loans.
- MSME-registered businesses are given a greater priority for government contracts. licencing and certification from the government
- Businesses registered under MSME can additionally carry over credit for minimum alternative tax (MAT) for up to 15 years instead of the usual ten.
- There is a One-Time Settlement Fee for overdue MSME payments.
- MSME forms were recently introduced by the MCA to ensure that payments owing to MSME registered firms are correctly recorded and paid on schedule.
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