The government provides special benefits to the small businesses in the form of subsidies and incentives. Also, banks give loans at concessional rates to set up these businesses. For availing those, the small businesses need to register under Micro, Small and Medium Enterprises (MSMEs) act.
If a business is registered under MSMEs act, it can avail several benefits like cheaper bank loans, tax benefits, preference during the tender process, and access to various schemes and incentives of government.
Benefits of registering
the registration schemes have no statutory basis. The units normally get registered to avail of some benefits. The incentives are funded either by the central or the state governments. The system of incentives that are offered by the centre generally contain the following:
- Priority sector lending or lower rate of interest
- Excise exemption scheme
- Exemption under direct tax laws
- Statutory support such as the reservation and Interest on Delayed Payments Act.
- The States/UTs offer their own package of facilities and incentives for the small scale industries. They relate to the development of industrial estates, the tax subsidies, the power tariff subsidies, the capital investment subsidies and other support. The centre and the state both, whether under the law or otherwise, target their incentives and the support packages normally to units registered with them.
The main objectives of the registration
- To tally and maintain a roll of the small industries to which the package of incentives and the support are targeted.
- To provide a certificate that enables the units to avail of the statutory benefits, mainly in terms of protection.
- To help serve the purpose of collection of the statistics.
- To help create nodal centres at the centre, the state and the district levels to promote SSIs.
Business Address Proof
Copies of Sale Bill and Purchase Bill
Partnership Deed/ MoA and AoA
Copy of Licenses and Bills of Machinery Purchased