When it comes to the registration of businesses in India, then there are multiple provisions. The sole proprietorship firm is very predominant in the market. If you intend to initiate your business with a sole proprietorship firm in India, then it is important to get the registration done. There are 3 ways to do so – the first one being the MSME registration online by providing the necessary documents.
Three modes of sole proprietorship firm registration.
– The shop and establishment act – it is required when the local law is existing in the location of the sole proprietorship.
– Udyog Aadhar under the MSME act – it is for micro and small industries.
– GST (goods and services tax) registration – if the business ROI crosses the threshold limit, they must obtain GST registration. The threshold limit is Rs. 40 lacs for those who supply goods and Rs. 20 lacs for those who offer services.
MSME means micro, small and medium enterprises. These industries are the spine of developing economies like India. The MSME sector contributes almost 45% of the total industrial employment; it also takes nearly 50% share of India’s total export and 95% of all the industrial units. The economy of the country grows when MSME as a sector performs well.
There are 2 categories of MSME.
– Manufacturing enterprises.
– Service enterprise.
Here is a table which shows the investment that is needed for such enterprises;
The registration process of the MSME.
If you intend to go for MSME registration, then you should abide by the following steps during the registration process;
– You will have to submit a single form. It can be done online or offline as well.
– If a person intends to register for more than one industry, it can be done independently.
– Along with the form, you will have to furnish information like industry name, Aadhar card, bank account details and address and so forth.
– You will have to produce self-certified certificates.
– MSME registration process is cost-free.
– Once you have filled in all the requisite details then upload them on the website, you would receive the MSME registration number along with the certificate.
What are some of the required documents for MSME registration?
Whether you want to apply via online or offline mode, the following documents are necessary.
– Business address proof – if you have self-owned premises, you are obliged to furnish an allocation letter, lease deed, possession letter or property tax receipt. If it is rented premises, then you are obliged to furnish a NOC certificate. You can also file a utility bill to serve the said purpose.
– Purchase bill and sale bill copy – a business requires to file a copy of the sale bill of each of the products that It would supply, and for every raw material that it buys, the business requires to furnish the purchase bill.
– AoA and MoA or partnership deed – if your business is a partnership firm, then you are required to furnish a partnership deed. In the case of a company, you must produce AoA and MoA and a certificate of incorporation.
– Copy of license – in few cases, the applicant will have to produce an industrial license.
– Bill of machinery purchased for the work – the applicant is obliged to present the bills and receipts of the purchases made by them.
Advantages of MSME registration.
– Of the many advantages of MSME certification in India, you can opt to get a loan from the bank at a cheaper rate; interest rates could be around 1-1.5% per month.
– You will receive tax benefits when your business is operating as MSME.
– MSMEs are permitted for MAT or minimum alternate tax, which can be carried for up to fifteen years.
– Government offers special benefits to MSMEs through opening tenders only for industries running under MSMEs.
– MSMEs can receive credit easily.
– Once the registration is done, it reduces the cost associated with patent and establishment along with other concessions.
– It offers one-time settlement fee for those MSME’s non-paid amounts.
– Government prefers MSMEs while issuing the licenses.
- For MSMEs, is the credit score compulsory?
– No, there is no such desideratum for a credit score.
- Post-registration, do one will get the hard copy of the MSME certificate?
– The whole process is paperless, and thus, one will not get a physical copy of the MSME certificate. Nonetheless, you will get an email for the same.
- Is it the propitious time for a start-up to register as MSME?
– It is the right time for MSME registration. Many relaxations and incentives will be offered to new and existing businesses.