Once you develop the conviction and confidence about the product or service that you are planning to offer, you are capable of commencing your venture. Registering your business is not mandatory; however, it has several benefits, such as:
- Opening business accounts
To start a business account, you need to submit proof of registration. This account is important to segregate personal and professional activities. Moreover, a business name is more professional instead of transacting in your name.
- Availing of loans
You can get a business loan only when you can provide evidence of being a business owner. Most lenders like Mahindra Finance require registration details along with other necessary documents to approve your application. Moreover, you may need a registration certificate to get credit cards for your business.
- Building a reputation
Without proper registration, your clients and vendors may not consider your business a legitimate one. Additionally, suppliers may offer discounts that are not available for unregistered businesses. To apply for government contracts, registration is necessary.
You may register your business as a micro, small, and medium enterprise (MSME). Such ventures are crucial for the economic growth of India and account for hiring a huge percentage of the working population.
MSME registration is a simple online procedure. If required, you may seek professional assistance to complete the registration process. Here are seven benefits of choosing MSME registration for your business:
- Priority lending
Every business, irrespective of it being big or small, requires funding to meet short- and long-term financial requirements. As per the Reserve Bank of India (RBI), every bank mustcompulsorily offer some percentage of their total loans to the priority sector. Having an MSME registration makes it easier to avail of priority sector lending via MSME and SME loans (small and medium enterprises).
- Affordable interest rates
With no collateral, you may have difficulty in getting an unsecured loan. However, as per the regulatory norms, lenders offer an economical rate of interest to MSME-registered businesses. Therefore, such certification qualifies you for lower MSME loan interest rates.
- Tax exemption
Without an MSME registration, you may have to pay a huge amount as tax. SMEs and MSMEs are eligible for presumptive tax benefits. As a result, you do not have to maintain detailed accounting books or undergo audits.
- Credit Linked GuaranteeScheme
A credit guarantee fund scheme under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) is available for small business owners. Under this scheme, registered ventures are eligible to receive collateral-free MSME loans for up to INR 50 lakh.
- Exclusive purchasing and protection from competitors
Under the MSME Market Development Assistance Scheme, the Government of India adopts a ‘Price and PurchasePreference policy’. As per this scheme, the government exclusively buys 358 items from micro, medium, and small ventures.
- Reimbursing ISO certification
Procuring ISO 9000, ISO 14001, and HACCP certifications have their advantages. To promote certifications and standardization among the MSMEs, registered businesses are eligible for exemption of all the expenses incurred to procure these certifications.
- Government-aided market assistance and export promotion
The Indian government organizes several trade fairs, exhibitions, and exchange programs on an international level. When you procure an MSME registration, you can be a part of these initiatives. By seeking access to all these platforms, you are getting opportunities to grow your business by making new connections. Additionally, you receive tax exemptions, subsidies, and technical assistance for exports of goods and services.
MSME registration opens many avenues to build your business venture domestically as well as internationally. Moreover,it is easier to get formal lending, which is a huge hindrance to the growth of small businesses. After registering, check yourMSME loan eligibilityand avail of the required funds to take your business to the next stage of progress and prosperity.