Small and medium enterprises (SMEs) and micro, small, and medium enterprises (MSMEs) form the backbone of the Indian economy. These businesses offer large-scale employment, especially in rural areas.
These businesses make significant contributions to the Gross Domestic Product (GDP) and hire millions of Indians. Additionally, the sector is responsible for around 40% of the total exports and accounts for approximately 45% of the total manufacturing industry.
Registering a small business
The first step to start your business is byregistering it. For this purpose, the business needs to meet various criteria,like:
- It has to be formed as a partnership firm, private limited company, or limited liability partnership
- Its total turnover must be below INR 25 crore
- It offers innovative products, services, or solutions
- It has to hold a patron guarantee issued by Indian Patent and Trademark Office
- It needs approval from the Department of Industrial Policy and Promotion (DIPP), which requires funding from the Securities and Exchange Board of India (SEBI)-registered incubation fund, private equity fund, or angel investor
- It should have a recommendation letter from an incubator
You may complete the registration procedure online via the Startup India portal, which involves the following steps:
- Entering your legal entity
- Providing registration number and date, or incorporation details
- Inputting your address and Permanent Account Number (PAN)
- Giving information about directors, partners, and other representatives
- Uploading self-certificated documentation
- Submitting your registration or incorporation application
Importance of registering your small business
The entire procedure is simple, quick, and hassle-free and offers several benefits as follows:
- Tax exemption for three years
- Government benefits under the Startup Fund and Credit Guarantee Schemes
- Possibility to avail ofbusiness loansat lower interest rates, resulting in significant savings
- Facility to carry minimum alternate tax (MAT) credit for up to 15 years against the regular 10-year period
- Reduction in the cost of acquiring patents and setting up expenses via concessions and rebates as per the MSME loan eligibility norms
- Opportunity to procure government contracts easily, as the portal is linked to state government portals and the Government e-marketplace
- One-time settlement fee for any unpaid MSME amounts
In addition to government initiatives to provide affordable SME loans, several institutions like Mahindra Finance offer attractive offers for businesses to meet their capital requirements. These loans offer faster processing and turnaround, and the lender asks for minimal documentation. Additionally, such loans are available against various kinds of collateral. Moreover, the MSME loan interest rates are affordable and offer flexible terms to ensure you can make timely repayments without financial distress.
For more details, visit the Mahindra Finance website now!