Msme Registration in India

Guide
on
MSME
www.e-startupindia.comCopyright © 2017 - All Rights Reserved -

Guide © 2017 by E-Startup India unit of DutchUncleTech Solutions Private Limited || All rights reserved
ABOUT MSME
MSME stands for MICRO, SMALL and MEDIUM Enterprises. It is
governed by MSMED Act 2006 under the Ministry of Micro, Small &
Medium Enterprises
It is also known by the name of Udyog Aadhar, since Aadhar card
plays an important role to register under the MSME. It is a passport
for small scale businesses in India
MSMEs not only play crucial role in providing large employment
opportunities at comparatively lower capital cost than large
industries but also help in industrialization of rural & backward
areas, thereby, reducing regional imbalances, assuring more
equitable distribution of national income and wealth.
MSMEs are complementary to large industries as ancillary units and
this sector contributes enormously to the socio-economic development
of the country.
The Schemes/ Programmes undertaken by the Ministry and its
organizations seek to facilitate/provide
 Adequate flow of credit from financial institutions/banks;
 Support for technology up gradation and modernization;
 Integrated infrastructural facilities;
 Modern testing facilities and quality certification;
 Access to modern management practices;
 Entrepreneurship development and skill up gradation through
appropriate training facilities;
 Support for product development, design intervention and
packaging;
 Welfare of artisans and workers;
 Assistance for better access to domestic and export markets and
 Cluster-wise measures to promote capacity-building and
empowerment of the units and their collectives.

What is Micro, Small & Medium Enterprises?
The Micro, Small and Medium Enterprises (MSME) are classified in
two classes:
1. Manufacturing Enterprises- The enterprises engaged in the
manufacture or production of goods pertaining to any industry
specified in the first schedule to the industries (Development and
regulation) Act, 1951) or employing plant and machinery in the
process of value addition to the final product having a distinct name
or character or use. The Manufacturing Enterprise is defined in
terms of investment in Plant & Machinery.
2. Service Enterprises:-The enterprises engaged in providing or
rendering of services and are defined in terms of investment in
equipment
 Micro Enterprises It is an enterprise whose investment in
manufacturing sector in its Plant & Machinery is <Rs.5 Crore
and in service sector in its equipment <Rs. 2 Crore
 Small Enterprises It is an enterprise whose investment in
manufacturing sector in its Plant & Machinery is <Rs. 5
Crore and in service sector in its equipment < Rs.2 Crore
 Medium Enterprises It is an enterprise whose investment in
Manufacturing sector in its Plant & Machinery is <Rs.10 Crore
and in service sector in its equipment <Rs.5 Crore

Benefits of MSME
 Collateral free loans –
The Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGS) was
launched by the Government of India to make available collateral-free credit to the
micro and small enterprise sector.
 Reservation policies to manufacturing / Production sector –
It Ensure increased production of consumer goods in the small scale sector
Expand employment opportunities through setting up of small scale industries.
 Credit Guarantee Fund Trust for Micro and Small sized EnterprisesMicro and
Small Sized
Enterprise can avail a loan of up to 50 lakh collateral free loan under this scheme.
Since the micro and small companies are run by the poor, and the deprived, the RBI
has directed banks to sanction collateral-free loans to such enterprises.
 Capital Aid for Technological up gradation for MSMES
Some MSMEs may not be able to use their resources to full potential due to lack of
the sophiscated technology required. The government, under the Capital Aid for
technological up gradation scheme, helps these enterprises upgrade their equipment
through latest technology by helping them get low-interest loan from banks.
 MSME market development assistance for Micro and Small enterprises:
Apart from the reserved products that government has promised to buy from theses
MSMEs, they are given marketing assistance even to those products, manufactured by
them, which do not fall under the purview of Reservation Policy.
 Low-Interest rate–
All banks and other financial institutions recognize MSMEs and have created special
schemes for them. They get the privilege of lower interest rate over the non-registered
entities.
 Relaxation in Trademark Government Fees–
Government has given relaxation to MSME registered entities in their fees, for
example, the fees of for other than small enterprises is ₹9000/- and for small
enterprises under MSME is ₹4500/-
 Tender Eligibility–
There is a 10% Quota fixed for MSME Registered Entity in government tender
participation.

PMEGP and other Credit Support Schemes
Scheme for providing financial assistance to set up new enterprises by MSME’s entities
PMEGP stands for Prime Minister’s Employment Generation Programme.This scheme is
implemented by Khadi and Village Industries Commission (KVIC). The KVIC routes a
government subsidy through designated banks for eventual disbursal to the beneficiaries /
entrepreneurs directly into their bank accounts.
Nature of assistance
MSME’s entity shall get funds subsidy on establishing their business as follows:-
Category
Area of
Business Unit
Your Contribution
(% of Project
Cost)
Subsidy under
PMEGP
(% of Project
Cost)
Term/ Working
capital loan
granted from bank
(% of Project
Cost)
General Category Urban 10% 15% 75%
Rural 10% 25% 65%
Special Category Urban 05% 25% 70%
Rural 05% 35% 60%
The maximum cost of the project/unit admissible
 in manufacturing sector is ₹ 25 lakhs
 in the business/service sector, it is ₹ 10 lakhs.
Who can apply?
 Any individual, above 18 years of age.
 At least VIII standard pass
 Cost of projects is above Rs.10 lakh in the manufacturing sector or above Rs. 5 lakh
in the business / service sector.
 Only new projects are considered for sanction under PMEGP.
 Self Help Groups (including those belonging to BPL provided that they have not
availed benefits under any other Scheme), Institutions registered under Societies
Registration Act,1860; Production Co-operative Societies, and Charitable Trusts are
also eligible.
Note:- Existing Units (under PMRY, REGP or any other scheme of Government of India or
State Government) and the units that have already availed Government Subsidy under any
other scheme of Government of India or State Government are NOT eligible.

How to Apply?
Submit your application online at http://www.kviconline.gov.in/pmegp/pmegponlineapp and
take the printout of the application and submit the same to respective offices along with
Detailed Project Report and other required documents.
To know more about the scheme in detail click below link
http://msme.gov.in/sites/default/files/PMEGP%20guidelinesfinal.pdf

CREDIT GUARANTEE SCHEME
(CGTMSE)
Objectives
To make available credit to Micro and Small Enterprises for loans up to Rs. 2 crore without
collateral/ third party guarantees.
CGTMSE has been set up to strengthen credit delivery system and facilitate flow of credit to
the MSE sector. The credit Guarantee under CGTMSE seeks to reassure the lender that, in
the event of a MSE unit, which availed collateral free credit facilities, fails to discharge its
liabilities to the lender; the CGTMSE would make good the loss incurred by the lender.
What is the Scheme?
The Scheme covers collateral free credit facility (term loan and/ or working capital) extended
by eligible lending institutions to new and existing micro and small enterprises up to Rs.
2Crore per borrowing unit.
Generally, Banks asked for collateral security when you apply for business loan. In cases
MSME’s does not have collateral then CGTMSE scheme help you to provide guarantee in
favour of bank on your behalf so that MSME’s can avail loans from banks and financial
institutions.
How much guarantee provided?
Particular Guarantee % of credit
facility avail
Credit facility up to Rs.5 lakh to micro
enterprises
85%
Credit facility up to Rs.50 lakh 75%
Credit facilityaboveRs.50 lakh and up
to Rs.200 lakh
50%
For MSEs owned/ operated by
women and all loans to NER
80%

Marketing Promotion Schemes
What is the scheme?
The financial assistance is provided to for the following activities:
A. Organizing Exhibitions abroad and participation in International Exhibitions/Trade Fairs
B. Co-sponsoring of Exhibitions organized by other organizations/ industry
associations/agencies
C. Organizing Buyer-Seller Meets, Intensive Campaigns and Marketing Promotion Events
Amount of Assistance
 Financial assistance of up to 95% of the airfare and space rent of entrepreneurs.
Assistance is provided on the basis of size and the type of the enterprise.
 Financial assistance for co-sponsoring would be limited to 40 % of the net
expenditure, subject to maximum amount of Rs. 5 lakh
Who can Apply?
MSMEs, Industry Associations and other organizations related to MSME sector
How to Apply?
The applications/proposals for seeking assistance under the scheme shall be submitted to the
nearest office of National Small Industries Corporation, with full details and justification.
http://msme.gov.in/sites/default/files/MASCHEME-New-18112014_0.pdf

MSME SAMADHAAN
It is a government programme where any MSME entity get support from government when
there is a delayed payments or non-payment by customers to Micro and Small Enterprises
under Micro, Small and Medium Enterprise Development (MSMED) Act, 2006
Nature of assistance
MSEFC of the State after examining the case filed by MSE unit will issue directions to the
buyer unit for payment of due amount along with interest as per the provisions under the
MSMED Act 2006.
Who can apply?
Any Micro or small enterprise having valid UdyogAadhar (UAM) can apply.
Salient Features
The buyer is liable to pay compound interest with the monthly rests to the MSME’s supplier
on the amount at the three times of the bank rate notified by RBI in case he does not make
payment to the MSME’s supplier for his supplies of goods or services within 45 days of the
acceptance of the goods/service rendered. (Section 16)
All States/UTs have notified Authority for Filing Entrepreneur's Memorandum, 33
States/UTs (i.e. except Arunachal Pradesh, Assam and Manipur) have Notified rules of
MSEFC and all the 36 States/UTs have constituted MSEFCs, as per provisions laid down
under MSMED Act 2006.
Every reference made to MSEFC shall be decided within a period of ninety days from the
date of making such a reference as per provisions laid in the Act.
If the Appellant (not being the supplier) wants to file an appeal, no application for setting
aside any decree or award by the MSEFC shall be entertained by any court unless the
appellant (not being supplier) has deposited with it, the 75% of the award amount. (Section
19)
Click here to know more about scheme
http://samadhaan.msme.gov.in/MyMsme/MSEFC/MSEFC_Welcome.aspx

Women Entrepreneurship (TREAD)
There is a provision for Government of India Grant up to 30% of the loan/ credit maximum
up to Rs. 30.00 lakh as appraised by lending institution/ banks.
The lending institutions/ banks would finance loan assistance for women through NGO for
undertaking non-farm activities, who usually have no easy access to credit from banks due to
cumbersome procedures and because of their inability to provide adequate security demanded
by banks in the form of collaterals.
GOI Grant and the loan portion from the lending agencies to assist such women shall be
routed through NGOs engaged in assisting poor women through income generating activities.
While the loan amount will be passed on to women beneficiaries, the Grant shall be utilized
by the NGOs for activities accepted as grant activities in the appraisal report of the lending
agency and capacity building of the NGOs. NGO which has been selected for Government
Grant will not be considered for GoI grant again in the subsequent two years from the date of
release of GoI grant.
http://msme.gov.in/sites/default/files/TREAD%20Guidelines.pdf

Cluster Development Programme
Introduction
The Ministry of Micro, Small and Medium Enterprises (MSME), Government of India (GoI)
has adopted the cluster development approach as a key strategy for enhancing the
productivity and competitiveness as well as capacity building of Micro and Small Enterprises
(MSEs) and their collectives in the country. A cluster is a group of enterprises located within
an identifiable and as far as practicable, contiguous area and producing same/similar
products/services. The essential characteristics of enterprises in a cluster are
(a) Similarity or complementarily in the methods of production, quality control and
testing, energy consumption, pollution control, etc.
(b) Similar level of technology and marketing strategies/practices
(c) Channels for communication among the members of the cluster
(d) Common challenges and opportunities.
Objectives
i. To support the sustainability and growth of MSEs by addressing common issues such as
improvement of technology, skills and quality, market access, access to capital, etc.
ii. To build capacity of MSEs for common supportive action through formation of self help
groups, consortia, up gradation of associations, etc.
iii. To create/upgrade infrastructural facilities in the new/existing industrial areas/ clusters of
MSEs.
iv. To set up common facility centres (for testing, training centre, raw material depot, effluent
treatment, complementing production processes, etc).
http://msme.gov.in/sites/default/files/PARCHAM.pdf

WHY CHOOSE US?
E-Startup India is a dedicated team of highly professional CA, CS
and Advocates driving towards integration of technology with
traditional practices to cater small businesses, start-ups and MSMEs
throughout their business journey in today’s fast moving and cost
effective world.
As Indian economy is moving towards a digital era
with an electrifying pace & where digital devices
become a core tool for every business. E-Startup
India make it simple for every businessman to sort
out their legal, tax and financial compliances
online while sitting at their place and get it done
within a time bound and cost effective manner.
E-Startup India aims to serve you just like a traditional
chartered accountant does, in your entire business journey,
with a great personalization and at half of their price. How?
 We will serve you with the same personalization just like a traditional
CA/CS/Advocate does
 We will always be there for you, from starting a business, throughout the
business and in your entire business journey
 Remind you about all compliance due dates in advance over the email
 Clear all your small doubts directly from experts over the phone
 Assist you in doing all types of legal, financial and operational
compliances
– Follow us on Social Media –
Post All Your Business Related Queries Here
Our Experts Will Answer It within 24 Hours

To know more visit us at
www.e-startupindia.com
Disclaimer: This document is for general guidance and informational purposes only, and does not constitute
professional advice. You should not act upon the information contained in this communication without obtaining specific
professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the
information contained in this communication, and, to the extent permitted by law, E-Startup India, its members,
employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting,
or refraining to act, in reliance on the information contained in this document, or for any decision based on it. Without
prior permission of E-Startup India, this communication may not be quoted in whole or in part or otherwise referred to in
any document.

Msme Registration in India

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Msme Registration in India

Similar to Msme Registration in India (20)

More from Estartupindia.com

More from Estartupindia.com (12)

Recently uploaded

Recently uploaded (20)

Msme Registration in India