MSME stands for Micro, Small, and Medium Enterprises. The MSMEs contribute greatly to the country’s GDP, employment, and exports. They are vital components of the Indian economy. The Indian government promotes and supports the growth of MSMEs. The Government of India has introduced the MSME Certificate System. This MSME Certificate System is also known as the Udyog Aadhaar Certificate System. This MSME is a registration certificate issued by the Ministry of Micro, Small, and Medium Enterprises (MSME) to micro, small, and medium enterprises in India. It provides proper legal recognition to businesses.
Eligibility Criteria Required For MSME Certification
An individual cannot approach the MSME Ministry (i.e., Ministry of Micro, Small, and Medium Enterprises) for MSME Certification. A proprietorship, a partnership firm, a company, and a trust with investments of below Rs.50 crore and an annual turnover of below Rs.250 crore are eligible for MSME registration.
Micro Enterprises
Micro enterprises are those companies with an investment of up to Rs.25 lakhs in plant and machinery. They receive an annual turnover of up to Rs.5 crores. These Micro companies are eligible for MSME Certification.
Small Enterprises
Small enterprises are enterprises with an investment of up to Rs.5 crores in plant and machinery. They receive an annual turnover of up to Rs.20 crores. These Small companies are eligible for MSME Certification.
Medium Enterprises
Medium Enterprises are enterprises with an investment of up to Rs.10 crores in plant and machinery. They receive an annual turnover of up to Rs.50 crores. These Medium companies are eligible for MSME Certification.
The other business entities that can apply for MSME registration are :
- Public Limited Companies
- Limited Liability Partnerships (LLPs)
- Hindu Undivided Families (HUFs)
- Self Help Groups (SHGs)
- Co-operative Societies
- Trusts
The Various Steps In the Registration Process
The registration process does not require extensive documentation. It is primarily online. It should comply with relevant regulatory requirements. Application process for MSME Certification is as below.
Online MSME Application
Companies can apply for the MSME Certificate through the Udyog Aadhaar Portal. The applicant has to visit the Udyam Registration Portal udyamregistration.gov.in. Choose the Registration Type – Choose MSME for New Entrepreneurs who are not registered and EM-II for others.
Submission Of Authenticate Documents
Enter all the necessary details such as PAN, GSTIN (if applicable), investment amount, and turnover. The companies must submit the Authenticate documents, such as.
The following documents are to be submitted for the MSME Certification:
- The Aadhaar card – The Aadhaar card of the company owner ia a must for identity verification.
- PAN Card – The PAN Card is a for identification of the owner.
- Other relevant details such as investment in plant, machinery, and equipment.
- Bank account details of the company Owner.
- Investment proof details of plant and machinery. (i.e., the investment in plant and investment on machinery details)Â
- Annual Turnover Proof.
The MSME Ministry will verify the documents. The validity of the MSME Certificate is 5 years, after which it must be renewed.
Issuance of MSME certificate
Once the process gets completed and approved, The MSME will verify the documents and issue an MSME Certificate to the companies. The applicant can download the MSME certificate directly from the portal. MSME Certificate is issued after the company has registered itself with the MSME Ministry.
Benefits of MSME Certificate
The Importance of the MSME Certificate is great. It is highly felt by MSMEs. MSME certificate opens up numerous benefits to MSMEs. The MSME Certificate offers several advantages to registered companies. The major advantages are listed below.
Legal Protection Against Payment Delays
MSMEs (Micro, Small, and Medium Enterprises) enjoy legal protections under the MSME Act against delayed payments from buyers. Legal protection against delayed payments from buyers is excellent. This assurance helps MSMEs to maintain healthy cash flow and demonstrates professionalism in managing financial relationships. This enhances the overall reputation of these MSMEs.
Subsidies and incentives
Companies with MSME Certificates are eligible for the Credit Guarantee Scheme and the Interest Subvention Scheme. They can enjoy these subsidies and incentives from the government. Access to Government Support is great. It not only improves operational capabilities but also reflects positively on the business’s reputation as one that is recognized and supported by governmental bodies.
Rs.15 Lakhs Subsidy Scheme For MSME
This Rs.15 lakhs subsidy scheme provides an upfront subsidy of 15% on institutional credit up to Rs.1 crore (i.e. A subsidy cap of Rs.15 lakhs). This scheme is for identified sectors/subsectors/ technologies.
Access To Financial Benefits
MSME Businesses can avail themselves of financial incentives, various government schemes, and subsidies. The government directs banks to lend loans to MSMEs at reduced rates, thereby easing the financial burden on small enterprises and enabling better cash flow management.
Tax benefits
Companies with MSME Certificates can enjoy tax benefits, such as exemption from excise duty and concessional rates of income tax. Tax Exemptions are great. MSME Businesses enjoy the eligibility for various tax benefits.
Credit Benefits
Easy access to credit: MSMEs can avail of collateral-free loans from banks and other financial institutions.
Priority Lending Possibility
Financial institutions give priority to MSMEs and often provide loans with lower interest rates to certified MSMEs.
Priority In Government Tenders
The government encourages the growth of MSME Businesses. In the case of government sectors, contracts are reserved for small businesses. The Priority access is great.
Government procurement
MSMEs can enjoy the possibility to participate in government procurement programs, such as the Public Procurement Policy.
Export Promotion Schemes - International trade
MSME Businesses enjoy the possibility to participate in international trade fairs and exhibitions. They can avail of export promotion schemes.
Excellent Business reputation
MSME (Micro, Small, and Medium Enterprises) business reputation gets enhanced.
Profitable MSME Business Ideas
List of some of the profitable MSME Business ideas in India are listed below:
- Bakery Services.
- Food Catering.
- Online Tutoring.
- Online Business.
- Hand Sanitizer and Mask.
- Jute Fabric Producrts.
- Sanitary Napkins.
These companies need low investments only.
Conclusion
- MSME certification ensures legal protections for MSME Companies.
- Help small businesses to enhance their reputation in the market.
- The MSME certificate empowers MSME businesses to thrive in a challenging economic landscape by providing substantial competitive advantages.
- It significantly enhances the growth and sustainability of small enterprises.