For running a business, MSME registration is not legally mandatory, but it comes with many benefits, especially for small businesses. MSME stands for – Micro, Small & Medium Enterprises. This registration is governed by the Ministry of Micro, Small and Medium Enterprises.
1) Funding support- Ministry of Micro, Small and Medium Enterprises (“Ministry”) has implemented various schemes under which Ministry is providing technical as well as funding support. Below is the list of such schemes:
- A Scheme for Promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE)
- Lean Manufacturing Competitiveness for MSMEs
- Design Clinic for Design Expertise to MSMEs
- Entrepreneurial and Managerial Development of SMEs through Incubators
- Enabling Manufacturing Sector to be Competitive through QMS&QTT
- Building Awareness on Intellectual Property Rights (IPR)
2) Reservation to buy-
- Under the Public Procurement Policy, Every Central Ministry /Department / PSUs shall do 25% of their total procurement from MSE Sector only.
- Out of 25% procurement, 3% procurement is to be procured from the MSME units owned by women.
- 358 items are reserved for exclusive procurement from MSMEs.
3) Protection against payments- As per Section-15 of The Micro, Small and Medium Enterprises Development Act, 2006, if the goods or services have been procured from an MSME unit, then the buyer shall be liable to make a payment on or before the agreed date, or there is no such agreement exist the payment is to be done within 45 days from the date of delivery of services of goods.
Where the buyer fails to make the payment within the given timelines as mentioned above, the buyer shall be liable to pay compound interest at three times of bank rate notified by RBI.
To control and stringently follow up on the above provisions, Companies Act, 2013 has also mandatory the half-yearly reporting of outstanding towards MSME and show the same in the annual financials of the Companies.
4) Collateral free loan- Collateral free loan up to a limit of ₹ 100 lakh is available for individual MSME both existing and new units. A trust named The Credit Guarantee Trust Fund Scheme was introduced by the Government of India, SIDBI (Small Industries Development Bank of India) and the Ministry of Micro, Small and Medium Enterprise to make sure this scheme is implemented (Credit Guarantee Scheme) for all Micro and Small Enterprise.
5) Other benefits-
- Marketing promotion Schemes includes financial assistance on a reimbursement basis for airfare, space rent, freight charges, advertisement & publicity charges, and entry/registration fee on reimbursement basis in case of participation in international exhibitions/trade fairs as approved under International Cooperation Schemes by Ministry.
- Marketing Assistance Scheme provides support in Organization of exhibitions abroad and participation in international exhibitions/ trade fairs, Co-sponsoring of exhibitions organized by other organizations/industry associations/ agencies, organizing buyer-seller meets, intensive campaigns and marketing promotion activities.
- Reimbursement of charges of acquiring of ISO 18000/ ISO 22000 /ISO 27000 Certification.
Important Links
MSME main Website- https://msme.gov.in/
Schemes details- https://msme.gov.in/all-schemes
Success Stories of MSME Units- https://champions.gov.in/Docs/Success_Stories.pdf
Application format to claim the ISO Certification Charges- https://msme.gov.in/sites/default/files/ApplicationFormatClaimingReimbursementofCertificationCharges.pdf
MSME Act-
https://www.indiacode.nic.in/handle/123456789/2013?view_type=search&sam_handle=123456789/1362
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