Why MSME registration is essential for your business?
Over the past five years, Micro, Small and Medium Enterprises (MSME) sector has emerged as a dynamic sector of Indian economy. On one hand MSME plays an important role in employment generation at comparatively low capital cost and on the other hand, it helps to industrialize rural and backward areas. Therefore, this vibrant sector has reduced regional imbalances, thereby, assuring more equitable distribution of national income and wealth. They sometimes contribute to the large industries as an ancillary unit.
In 2006, a policy to address the issues affecting the MSME's was introduced in the name of Micro; Small and Medium Enterprises Development (MSMED) Act. The Act is the first-ever legal framework for the recognition of the enterprises. According to this, the primary responsibility of promotion and development of these enterprises lies in the hands of the State governments, which are supplemented by the Central. Various schemes and programs are undertaken which can only be accessed after MSME Registration. a to:
Encourage entrepreneurship: through the adequate flow of credit from financial institutions and banks. All banks and financial institutions recognize MSME and provide schemes for their commercialization. In order to sustain MSMEâ€™s tax benefits in the initial years of business, such as; excise duty exemption, and exemption from certain direct taxes.
Support for technological upgradation, infrastructure facilities
Employment opportunities: skill upgradation, capacity building, and training facilities.
Livelihood opportunities: the welfare of artisans and workers
Support for product development and access to the domestic and international market.
Types of MSME Registration:
Provisional MSME registration: it is granted to a unit during the pre-investment period. Benefits of the same are:
To avail facilities of accommodation, land, and other approvals
To get necessary No Objection Certificates and other clearances form their respective regulatory bodies.
Permanent MSME registration: it is granted to an existing unit that is functional. Benefits of the same are:
Tax exemptions from state and central government.
Price and purchase preference for goods produced.
MSME Registration Process:
The registration process allows the MSMEâ€™s to enter into large scale industries and at the same time allows allow new entrepreneurs to enter in this sector. MSME registration is not a cumbersome process as the documents required for the same are comparatively less. One requires:
Proof of establishment that may be a Sale Deed or a Rent Agreement.
Bank Statement or a canceled cheque.
Aadhar card of the authorized person.
PAN card of the authorized person.
It is important to note that Aadhaar card of the authorized person is important. However, in the applicant is not enrolled for Aadhaar, he or she shall apply for the same. Till the time Aadhaar is assigned, on behalf of the enterprise, the MSME-DI or DIC shall fill the Udyog Aadhaar Registration (UAR).
However, one may require producing following documents as an alternative:
Aadhaar enrollment ID slip; if he has enrolled.
A copy of the request made for Aadhar enrollment.
Any of; bank photo passbook, voter ID, passport, driving license, PAN card, employee photo ID card issued by the Government.
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