A country actual economic growth is not just dependent on its large scale industries and multi national organization but also on its medium level industries and most importantly on its small scale enterprise.
The ministry of micro, small and medium enterprise has provided a suitable name for small scale business operation in india as a micro, small and medium enterprise. The micro, small and medium enterprise development act of 2006 contains provisions related to micro, small and medium enterprise.
Entities that are eligible for registration as a micro, small and medium enterprise.
Any type of entity like proprietorship firm and partnership enterprise and the association of persons and hindu undivided family and company and limited liability partnership and any other business entity can register as a micro, small and medium enterprise.
Suggested read udyog aadhaar print download
Sectors of enterprise that can register be micro, small and medium enterprise.
Micro, small and medium enterprise covers only manufacturing and service industries. The scheme does not cover the trading company. Micro, small and medium enterprise model is brought to support new business ideas by providing them subsidy and benefit whereas trading companies are just like middlemen, only a link between manufacturer and customer. As a result this strategy does not cover it.
Criteria for consideration as a micro, small and medium enterprise.
Section 7 of the micro, small and medium enterprise development act classifies the enterprise into the micro, small and medium enterprise. In the case of the manufacturing sector, classification has been done on the basis of investment in plant and machinery and in the case of the service sector, classification has been done on the basis of investment in equipment and udyog aadhaar certificate print.
Earlier there was criteria which was based only on the investment in plant and machinery but from 1st of july, 2020, the ministry has changed the threshold level as well as the criteria for considering the business entity as micro, small and medium enterprise based on investment in plant and machinery as well as on turnover of the entity. The revised criteria for micro, small and medium enterprise is as below.
Procedure for registering as a micro, small, or medium enterprise.
Micro, small and medium enterprise registration has now been replaced with the udyam registration.
Micro, small and medium enterprise registration is to be done in the government portal of https://udyamregistration.gov.in. The registration of micro, small and medium enterprise can be done under the following two categories in the portal
For new entrepreneur who are not registered yet as micro, small and medium enterprise and print udyog aadhaar certificate.
For those having registration as entrepreneur memorandum two and udyog aadhaar memorandum and for those having registration as entrepreneur memorandum two and udyog aadhaar memorandum through assisted filing.
This registration with micro, small and medium enterprise and udyam registration are completely online.
The advantages of registering a micro, small or larger enterprise.
Firstly bank Loans without any collateral security.
The indian government has made no collateral loans available to all small and micro enterprise sector. This initiative provides funding to micro and small enterprise. The benefit can be claimed by both established and new enterprise under this scheme.
Secondly 50 per cent subsidy on patent and trademark registration.
50 per cent subsidy in payment of the fee in case of patent registration and trademark registration has been given to the enterprise that has the certificate of registration as a micro, small and medium enterprise.
Thirdly exemption of interest rate charged on overdraft limit.
Enterprise registered under micro, small and medium enterprise can avail a benefit of upto 1per cent on the overdraft as mentioned in a scheme that differs from bank to bank.
Also read udyog aadhaar print
Fourthly protection against delayed payments.
The micro, small and medium enterprise development act, 2006, provides for the provisions to deal with the problem of delayed payment, whereby any buyer who fails to make payment to micro, small and medium enterprise supplier, as per agreed terms or within a maximum period of 45 days, he would be liable to pay interest to micro, small and medium enterprise supplier.
Furthermore, on the 30th of October, 2017, the indian government created an online samadhaan portal to enable the micro and small enterprise to directly register their case relating to delayed payments online on the portal.
Fifthly full reimbursement for international standard organization certification charges.
The cost of acquiring certification from an international standard body can be claimed in whole by the registered micro, small, and medium enterprise.