When it comes to business registration in India, then there are plenty of different provisions. One of the preferred forms of business entities is the sole proprietorship firm in India.
Most of the budding entrepreneurs often opt to kickstart their small service-based business with a sole proprietorship registration in India. If you intend to choose the sole proprietorship firm, then there are three ways by which you can do so as given below;
Modes of sole proprietorship firm registration.
– The shop and establishment act – it is required when the local law is existing in the sole proprietorship’s location.
– Udyog Aadhar under MSMED act – it is for micro and small industries.
– GST registration – if the business or entity’s ROI is breaching a specific limit, then they are obliged to go for GST registration. The limit is Rs. 40 lacs for the ones who supply goods and Rs. twenty lacs for those who provide services.
MSME means micro, small and medium enterprises. These industries are the central pillar of the developing economies in India. MSME contributes nearly 45% of the total industrial employment; it takes almost 50% share of the full export from India and 95% of all the industrial units. When the MSMEs grow exponentially, the economy of the country also grows at a tremendous level.
There are two categories of MSME as given below;
– Manufacturing enterprises.
– Services enterprises.
Here is the table that represents the investment that is required for each of them.
MSME registration process.
If you intend to go after the MSME registration, then the following steps would help you in the process;
– One requires to submit a single form. One can do MSME registration online/offline.
– If a person intends to register for more than one industry, he/she may do so by individual registration.
– Along with the form, one requires to furnish information such as industry name, Aadhar card, bank account details, address and so forth.
– One requires to produce self-certified certificates.
– There is no MSME registration fee that one is obliged to pay for this process.
– Once you are done filling in all the essential details and upload them on the website, you would receive the MSME registration number and MSME registration certificate as well.
What are some of the documents that one is obliged to submit for MSME registration?
Whether you go with MSME registration online or offline, you require to produce the following documents.
– Business address proof.
If yours is a self-owned business, then you are obliged to furnish an allotment letter, property tax receipt, lease deed, or possession letter. If you are operating your business on the rental premises, you must provide a NOC certificate. You can also file a utility bill as a business address proof.
– Purchase bill and sale bill copy.
Business is obliged to submit each product’s sale bill’s copy that it would supply, and for raw material that one buys, the business is obliged to produce a purchase bill as well.
– AoA and MoA or partnership deed.
If yours is a partnership firm, you require to furnish a partnership deed, and in the case of a company, you are obliged to present AoA and MoA and certificate of incorporation.
– License’ copy.
In some scenarios, the applicant might have to furnish an industrial license.
– Bill for machinery bought for work.
The applicant should have all the receipts and bills of purchases made by them.
Advantages of MSME registration.
– You would receive a loan at a nominal rate; the interest rate can be as low as one-two per cent per month.
– There are plenty of tax benefits to the industries running as MSMEs.
– MSMEs are permitted for minimum alternate tax (MAT) that can be carried for up to fifteen years.
– Government also offers special benefits to MSMEs by opening up tenders only for industries running under MSME.
– It is easy for MSME to obtain credits.
– Once the MSME registration is done, the patent cost or formulating industries gets reduced as there is plenty of concession for such industries.
– There will be a one-time settlement fee for non-paid amounts of MSME.
– Businesses registered as MSME will be given higher preference for a government license.
– Is credit score compulsory for MSMEs?
No, there is no such requirement for a credit score for MSMEs.
– Post-registration, does one get a hard copy of the MSME certificate?
Currently, the whole process is paperless. Thus, one will not get a hard copy of the MSME certificate. Nonetheless, one will receive the Email for the same.
– Is the time propitious for a start-up to register as MSME?
Yes, it is the right time for start-ups to register as MSMEs. Lots of benefits and relaxations are on offer for both new and existing businesses.