How to register MSME in India?
India being a developing county is a home to numerous small and medium sized businesses. Therefore, there exists numerous Micro, Small and Medium Enterprises (hereinafter referred to as ‘MSME’) in India which plays huge role in the economic development of the country and also employment. The MSME sector majorly contributes to the industrial growth of India including the exports made by India. The Indian Government provides exemptions and relaxations from legal compliances to MSMEs in India, however to avail those exemptions and relaxations, MSME registration process becomes imperative.
MSMEs are enterprises are classified into micro, small and medium based on their turnover. Enterprises falling within the ranges ascertained by Government of India can register as Micro, small or medium enterprise.
MSME Law in India
The various laws regulating MSMEs in India are:
- Micro, Small and Medium Enterprises Development Act, 2006
- The Khadi and Village Industries Commission Act, 1956
- The Coir Industry Act, 1953
However, the MSMEs in India are primarily governed by the Micro, Small and Medium Enterprises Development Act, 2006. The said Act promotes the development of MSMEs in India and regulates their mode of conduct.
MSME Registration in India- Eligibility
Presently the MSME industries are divided into two categories: Manufacturing and services. The classification of these industries are based on the amount of investment made into the enterprise. However, an amendment is proposed to be made in this regard which would remove the difference between manufacturing and service sector. This amendment would also include an additional criteria of turnover of the enterprises.
Below is the current classification of MSMEs:
|Classification||Turnover||Investment in Plant and Machinery|
|Micro||Less than INR 5 Crores||Less than INR 1 Crore|
|Small||Less than INR 50 Crores||Less than INR 5 Crores|
|Medium||Less than INR 250 Crores||Less than INR 50 Crores|
Benefits of MSME registration in India
The various benefits of MSME registration in India are:
- Collateral free loans or credit facility can be easily made available to the MSMEs.
- Reduced Trademark and Patent Filing fee– The Trademark Rules in India provide for reduced official trademark filing fee for MSMEs in India and the Patent Rules also enumerate reduced official patent filing fee for MSMEs or small entities in India.
- MSMEs can claim various tax benefits and tax deductions as applicable depending on their classification.
- Bank loans can be availed for these benefits at very low interest rates compared to other category of loans.
- Special government tenders are exclusively made available only to MSMEs.
- Preference to women enterprises as they are provided with different trainings and counselling related to business operations.
For more information on MSME registration, write to us at email@example.com