Thursday, December 1, 2016

MSME (medium, Small and Micro Enterprise) registration process and benefit

This request came from a friend so I decided to put it on this blog so many can get the benefit. 

What is MSME
MSME stands for Micro, Small and Medium Enterprise both in knowledge sector and production section.
In knowledge sector/ service sector: a micro enterprise is an organization with 10 lakhs of the investment, a small organization is with investment in equipment of less than 2 crore and a medium enterprise is one which has less than 5 crore investment in equipments.

In factories/ industries where production happens: a micro enterprise is one with investment in machinery of less than Rs. 25 lakhs, a small enterprise is something which has investment of less than Rs. 5 crore and a medium enterprise is something which has investment in machinery of less than Rs. 10 crore

Benefits of MSME registration
It is not necessary to do MSME registration, however, once registered you can get many benefits.
These benefits are under MSMED Act. It also gives more value to the lenders.
Here are few of the benefits:
1.       Easy sanction of loan due to government’s direction to bank on priority sector lending (agriculture, small and medium enterprise, startups etc.)
2.       Lower rate of interest as per the RBI and government directives.
3.       Excise exemption in certain state
4.       Lower stamp duty (such as in IT SEZ park in Maharashtra)
5.       Benefit of other packages declared by state and union government time to time.

From where to register:
You may do it free in the Indiafillings website:
What are the Documents to be submitted along with Filing of Entrepreneurs Memorandum?
Following documents need to be submitted while filing EM:
   •          Self-certified copy of Power of Attorney/Board Resolution /Society Resolution, wherever applicable, while signing as Partner/Managing Director or Authorized Person.
   •          Certified /notarized copy of the Partnership Deed/Memorandum of association /Articles of Association in case of Medium Enterprises.

4. What are the applicability criteria and procedure for Filing of Entrepreneur Memorandum?
   •          Filling of memorandum is optional for all Micro and Small Enterprises.
   •          Filling of memorandum is optional for service sector medium enterprises
   •          Filling of memorandum is mandatory for manufacturing sector medium enterprises.
   •          A unit can apply for PRC for any item that does not require industrial license which means items listed in Schedule-III and items not listed in Schedule-I or Schedule-II of the licencing Exemption Notification. Units employing less than 50/100 workers with/without power can apply for registration even for those items included in Schedule-II.
   •          Unit applies for Provisional Registration in prescribed application form. No field enquiry is done and Provisional Registration Certificate (PRC) is issued.
   •          Once the unit commences production, it has to apply for permanent registration on the prescribed form

6.       What is the Validity of Registration Certificate granted?
Answer: Provisional registration is valid for a period of 2 years from the date of its Issue. In case Unit is not set up during two years, applicant may apply afresh and obtain a new provisional registration.
Permanent registration is granted for perpetuity.

7.       Can MSME Registration be revoked?
Answer: A Micro, small and medium Enterprises can violate the regulations in the following ways which will make it liable for de-registration:
   •          It crosses the investment limits.
   •          It starts manufacturing any new item or items that require an industrial license or other kind of statutory license.
   •          It does not satisfy the condition of being owned, controlled or being a subsidiary of any other industrial undertaking.

From where can I get more details about the scheme?

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