MSME/SSI Registration

Although, there is no compulsion to get MSME registration but is always advised to do so as it provides lots of benefits to the enterprises registered under the MSME Act. It will save you from a lot of inconveniences later on. After assigning you the Provisional MSME Certificate and you can begin with your production and even apply for a Permanent Certificate which will add more advantages for you. Always apply for provisional registration at an initial stage of the business.

As said above, SSI/MSME registration is voluntary. Businessmen and entrepreneurs usually get this done to utilize the advantages offered under it. The registration process is quite easy and simple. You can easily avail it (provided you have a manufacturing plant or a commercial space where you render services), many businesses opt for it over other registrations.

It is advisable to get a Provisional SSI Registration Certificate (PRC) before starting your operation in your enterprise. The PRC will work smoothly for you and will help you out with particular NOCs and clearances from regulatory bodies.

If your business or enterprise is listed under Schedule –III of Industrial Licensing Exemption Notification, then you can easily apply for PRC without an industrial license. Other units must first acquire an industrial license. All the clearances should be obtained by the enterprise whether it be statutory or administrative. For example, a drug license under the drug control order, if required. The PRC is issued based on the application form. No field inquiry is made.

The validation of a PRC is for 5 years and if the unit is still not under operational then you may still re-apply for it. As soon as you start with your operations, you can easily apply for the Permanent License.

MSMEs are recognized by all the institutions and banks. Special schemes are drafted to recognize them as well. Banks prefer MSMEs instead of normal enterprises to lend loans. The possibility of getting a sanctioned loan is much higher in the case of MSME. Bank loan interest rates will also be lower. There may also be preferential treatment in case of a delay in repayment.

Many state government prefers enterprises which are registered under the MSMED Act. Subsidy such as on power, taxes, and much more is offered by state governments. In most of the states, sales tax exemption is provided purchase preferences are given on goods produced. The enterprise may also relish the excise exemption scheme and exemption from certain direct taxes in the initial years of your business.

While computing the value of Plant and Machinery, the only original value is asked to be taken into account as per the MSME notification.

Certain trust such as Credit Guarantee Fund Trust has been set up by Ministry of MSME, Government of India and SIDBI, so that there won’t be any breakage in the flow of credit to the MSE sector without any interference from the third party. The scheme is solidified on the basis that the lender should give importance to project viability and secure the credit facility purely on the primary security of the assets financed. A cluster-based approach to lending is intended to provide a full-service approach to cater to the diverse needs of the MSE sector which may be achieved through extending banking services to recognized MSE clusters. The banks have, therefore, been advised to treat it as a thrust area and increasingly adopt the same for SME financing. Banks are always asked to take appropriate steps so that the flow of credit is smoothly done to the identified clusters of micro and small entrepreneurs from the Minorities Communities residing in the minority concentrated districts of the country. The CGTMSE would provide cover for credit facility up to Rs. 100 lakh which have been extended by lending institutions without any collateral security. A nominal annual fee is charged by the CGTMSE to avail of the guarantee cover.

Credit rating is an estimate to figure out the capability of an enterprise to meet all the financial needs based on the previous year's dealings. Although credit rating is not compulsive it is in the interest of the MSE borrowers to get their credit rating done as it would help in credit pricing of the loans taken by them from banks.

LegalRaasta provides MSME application services across India in all cities. We have done MSME registration in Mumbai, Delhi, Gurgaon, Noida, Bangalore, Chennai, Hyderabad, Ahmedabad, Kolkata, Surat, Pune, Jaipur, Lucknow, Kanpur, Nagpur, and other Indian cities.