MSME registration in India has undergone significant changes in the past few years, especially after demonetization. Many small and medium enterprises (SMEs) are left wondering why MSME registration is important and how this benefit can affect their businesses positively. Here’s everything you must know about MSME registration in India and how it can help your business!
What are the advantages of registering as an MSME?
1. MSME registration gives your business a legal identity. This can be helpful when opening a bank account or applying for loans.
2. MSME registration can help you get government contracts. Some tenders are only open to registered businesses.
3. MSME registration can make you eligible for certain subsidies and tax benefits.
4. MSME registration can help you access cheaper credit from banks.
5. MSME registration can help build your business’s credibility.
Also Read : How Does MSME Registration benefits a Start-up Company
How does it help?
Registering your business as an MSME has several benefits for startups. For one, it can help you access government schemes and subsidies designed explicitly for small businesses. Additionally, it can provide you a leg up when competing for tenders and contracts. Moreover, it can help build your credibility with suppliers and customers. Finally, it can provide some tax benefits. Registering your business as an MSME is worth considering if you’re a startup owner.
What happens if you don’t register?
If you don’t register your business, you can’t avail yourself of the benefits that come with it. For one, you won’t be able to get government contracts. Additionally, you will have a more challenging time getting loans from financial institutions, and you won’t be able to participate in government programs designed to help small businesses. Not registering also means you miss out on the protection that comes with registration, leaving you vulnerable to legal action.
Where do I go for more information?
There are many benefits to registering your startup as an MSME. For one, it can help you access government schemes and subsidies. Additionally, it can help you get loans from banks and other financial institutions. It can also give you a competitive edge when bidding for tenders. Finally, it can help build credibility for your business.
Can anybody register?
Only micro, small, and medium enterprises (MSMEs) can register for the MSME certificate. The main benefits to startups are that it makes availing of government schemes easier and serves as a proof of identity for the business. It also helps build credibility with customers and suppliers and can lead to cost savings.
MSME registration offers many benefits to startups. These benefits include:
1. Access to government schemes and subsidies: MSMEs can avail themselves of various government schemes, and grants explicitly meant for them. Examples are the setting up of manufacturing clusters, startup incubators, reducing import duties on raw materials, and concessional loans.
2. Reduced tax rates As per Section 44AA of the Income Tax Act, 1961, companies with turnover less than Rs 5 crore qualify for reduced tax rates that range from 5% to 25%.
3. Reduction in Cost of Production: Registration under the MSME Act provides a unique code that enables you to buy inputs at subsidized prices from the Government’s procurement agencies, such as Small Industries Development Bank of India or SIDBI and Indian Oil Corporation Limited (IOCL).
4. Technical knowledge through Centres of Excellence: The Ministry also set up Centres of Excellence across India in areas such as leather technology and IT software, among others which offer support services like advisory services and training programs to Micro, Small & Medium Enterprises (MSMEs).
