Why MSME Registration is Essential for Your Business?

by Gaurav Bansal Company Registration Consultants in Delhi

MSME registration or Micro, Small and Medium Enterprise registration has given a voice to the small scale entrepreneurs who want to make it in the rat race that is the business scenario in the country. With MSME registration, there are several benefits that the government of India provides. Therefore, for business, especially that are micro and small, this form of registration is a supportive measure to ensure that you can balance the foundation of your business.

The registration is essential because of benefits

Below is a detailed explanation of the benefits associated with MSME registration. Once you go through them, you will understand why are stressing this legal process so much:

1. Bank benefits: For a small enterprise, bank loans are pretty much the only way to raise capital and other finances for business transaction. Fortunately, there are several schemes of the titular registrations that the bank provides to the enterprises availing them low rate loans.

2. Benefits to tax: Tax exemptions are purely subjective to the business that you engage with. However, there are many such businesses that can enjoy tax exemptions for the initial stages of the business (or you can say, until your enterprise remains small)

3. Benefits of the credit guarantee scheme: In this particular form of scheme, the small enterprises can avail the following:

a. A loan of INR 50 lakhs

b. For north-eastern regions, the loan guarantee in India goes from 1.5percent to 0.75 percent.

c. A guarantee cover of 80%

d. Medium and small scale enterprises operated by women

e. The guarantee fee of loans reduced to 0.75 percent.

4. Exclusive manufacturing rights: A small scale enterprise can get crushed in the initial stage of its business unless it has some form of security. With the exclusive manufacturing rights, the government has given the rights of manufacturing to only the small enterprises (not medium). This way, the small businesses can ensure their progress without any competition in their early stages.

5. Hire purchase service to purchase high end machinery: Through this service, MSMEs are given incentives to purchase high end equipments for their operative needs.

6. Market development benefits: through this benefit, the government has promised to buy certain products from only the small businesses. This benefit assures that small scale businesses that they can get ahead in the competition where government contracts are most often the best course of action.

Now, without MSME registration, your business won’t be recognized as one and to that end, you won’t be able to avail none of the above benefits. However, there are some auditing issues and paperwork that can mar small businesses. That being said, if you contact the right professionals to help you with that, the registration would provide you all of its perks and none of its issues.