Start-up India - An Initiative by MSMEs

by Simran Aahuja Marketing Professional

Startup India is an initiative of the Government of India. Under the startup scheme, eligible companies can get recognized as startups. These startups can avail tax benefits, compliances are easier etc. Micro, Small and Medium Enterprises (MSMEs) are also started as startups. The industries must acquire MSME Registration in order to undertake business activities that involve all kinds of activities.

How are Micro, Small and Medium Enterprises (MSMEs) classified?

MSMEs are divided into categories based on two sectors on the basis of which the classification of MSMEs is done - manufacturing/production sector and service sector.

Criteria- Investment in Plant and Machinery Equipment

Category	Manufacturing / Production Sector	Services Sector
Micro Enterprises	If the investment amount is less than Rs 25 lakhs, it is referred to as a micro enterprise	If the investment is less than Rs 10 lakhs
Small Enterprises	If the Investment amount is above Rs 25 lakhs and less than Rs 5 crores	If the investment is less than Rs 10 lakhs
Medium Enterprises	If the Investment amount is above Rs 5 crores and less than Rs 10 crores	If the investment is less than Rs 5 crores

Criteria – Investment and Annual Turnover

Category	Manufacturing / Service Sector
Micro Enterprises	If the Investment amount is less than Rs1 crores If the turnover is less than Rs 5 crores
Small Enterprises	If the investment amount is less than Rs 1 crores If the turnover is less than Rs 5 crores
Medium Enterprises	If the amount of Investment is less than Rs 20 crores If the turnover is less than Rs 100 crores

What are the benefits of MSME Registration?

MSMEs are beneficial in many ways. Individuals set up industries at a small scale as they have the potential of earning profits. These enterprises are eligible to avail various other benefits too. MSME Registration play a crucial role in the establishment of the company. Only after successful registration, individuals can avail benefits set up for MSMEs.

Some advantages of MSMEs are as mentioned below –

·        They are allowed to receive loans without any collateral
·        They are permitted to receive subsidy on Patent Registration and Industrial Promotion (PRIP)
·        Thy have an overdraft facility because of which they can avail an exemption on the interest rate
·        They receive a concession on utility bills such as electricity
·        They have benefits and protection against delayed payments
·        ISO Certification Charges Reimbursement

What is the registration process for MSME Registration?

The registration process consists of certain steps that are crucial and must be taken into consideration before the establishment of any company.

In order to obtain MSME Registration and carry out business activities, individuals must follow the below mentioned steps –

Application filing

The first step in the registration process is to file an application form with the concerned authority or department of the Government

Fill up all details and submit documents

Provide specific details about the industry and submit all the necessary documents within the stipulated time period. The applicant must submit details of the enterprise such as the name, PAN number of the company, location of the plant where the production will take place, date of the commencement of business, number of employees. They must mention the primary business activity of the enterprise

Submission of identity proof

The applicant must submit his Aadhaar card number as an identity proof and other crucial details of the applicant which includes name, gender, PAN number, email address and mobile number.

Creation of a bank account

A bank Account Number and IFS Code is a requirement. Thus, the applicant must create a bank account and provide an IFS code.

Submission of National Industrial Classification

The applicant must provide a 2 Digit NIC Code to the concerned authority

Submission of investment amount

They must specify the amount that will be invested in Plant and Machinery and Equipment

What documents are required for MSME Registration?

·        Certfied copy of Aadhar card of the applicant
·        NIC code of all the members of the company
·        Total number of employees who will work in the company
·        Primary business activity of the business
·        Address proof of the registered office
·        Proof of ownership of the place
·        Copy of purchase bill of all the raw materials that will be used in the production of the products
·        A copy of partnership deed if it is a partnership firm
·        Memorandum of Association (MOA), Articles of Association (AOA) and Certificate of Incorporation (COI)
·        Bank account statement of the enterprise

What are the eligibility requirements or MSME Registration?

Individuals must ensure that they follow all the minimum requirements before filing an application in order to acquire MSME license.

Any person who is a part of a Hindu Undivided family
Any person who wants to establish a limited liability partnership company
Any person who owns and operates a partnership firm
Any person who is a sole proprietor
Any person who is owns a One Person Company
Any person who owns a production company
Any person who own a cooperative societies

Conclusion

The individuals who want to start a MSME must acquire MSME Registration and register their business before company incorporation. They must follow all requirements which are specified by the Government and follow all guidelines, rules and regulations.