Mumbai, June 1 The Indus Entrepreneurs (TiE), a Silicon Valley-based non-profit organisation supporting start-ups through networking and the raising of capital, advised Indian start-ups to obtain the Udyog Aadhaar MSME Registration in India. TiE believes that this will help them access developmental avenues initiated by the government.
“I see merit in start-ups, especially early stage and growth stage, to avail the benefit of MSME registration. We welcome and support the Government’s initiative to make liquidity available to all businesses and this will help the economy to bounce back sooner,” said Atul Nishar, President, TiE Mumbai.
“With the Atmanirbhar package, MSME registration for start-ups is a necessity as there are good benefits which early-stage companies can avail besides the loan package which is still getting rolled out. MSME SAMADHAAN is one such benefit where a start-up will get payments in a maximum of 45 days. Financial assistance through MSME incubators is also a key attraction. At 100X.VC we are asking all our start-up portfolio companies to get the MSME registrations,” said Sanjay Mehta, Founder & Partner 100X.VC and Board Member, TiE Mumbai.
Various benefits
A TiE official release stated that the start-ups have long been facing a problem of delayed realisation of their bills and receivables, particularly from large corporate buyers and government organisations. Especially in the times of Covid-19 when the need for cash flow for start-ups is at the highest level, being MSME registered makes good sense for start-ups given its numerous benefits.
The Micro, Small and Medium Enterprises Development Act, 2006, MSME SAMADHAAN made provisions to mitigate the problem of delayed payment, whereby any buyer who fails to make payment to MSMEs, as per agreed terms or a maximum of 45 days, would be liable to pay monthly compounded interest at three times the bank rate notified by RBI.
Any individual or Micro and Small Industries (MSEs) start-up that has innovative business ideas at near commercialisation stage can approach the Business Incubators approved under the scheme. Under the scheme, various institutions like engineering colleges, management institutions, research labs, etc., that have in-house incubation facilities and faculty for providing handholding support to new ideas/entrepreneurs can apply in the prescribed application form.
The main objective of the scheme is to promote and support the untapped creativity of individuals and to promote the adoption of the latest technologies in manufacturing as well as knowledge-based innovative MSMEs.
TiE noted the benefits of registering the MSMEs. That includes financial assistance up to ₹15 lakh for developing and nurturing an idea. Financial assistance of up to ₹1 crore. as grants in aid for the seed capital support to HIs/BIs for converting deserving ideas into start-ups. MSME registration helps in getting government tenders. Under bank loan, 15 per cent import subsidy on fully automatic machinery.
It becomes easy to get licenses, approvals, and registrations, irrespective of the field of business. Compensation of ISO certificate expenditure. Registered MSMEs get tariff subsidies and tax and capital subsidies. Registered MSMEs get exemption under Direct Tax Laws.