Micro, Small & Medium Enterprises (MSME)

Micro, Small & Medium Enterprises Development (MSMED) Act, 2006, has been put into place to provide for encourage and ease the development and improvement of the competitiveness of Micro, Small and Medium enterprises. According to Section 7 of the Act, there are primarily two sectors – Manufacturing Sector and Service Sector, further which the classification of micro, small and medium enterprises is made.

For theenterprises engaged in the manufacture or production of goodssubject to any industry specified in the 1st Schedule to the Industries (Development and Regulation) Act, 1951, following is the classification according to the investment made in plant and machinery

(i)   micro enterprise - >25 lakh rupees;

(ii)  a small enterprise-more than 25 lakhs, but more than 5 crore rupees;

(iii)  a medium enterprise–more than 5 crore but less than 10 crore rupees.

For the enterprises engaged in providing or rendering of services, the classification is according to the investment made in the equipment

(i)    a micro enterprise ->10 lakh rupees;

(ii)   a small enterprise– more than 10 lakhs, but more than 2 crore rupees;

(iii)  a medium enterprise - more than 2  crore but less than 5 crore rupees.

For calculating the investment in plant and machinery, the cost of pollution control, research and development, industrial safety devices and such other items as per the notification are excluded.

What are Features of MSME Registration?

1. Only an entrepreneur having valid Aadhar Number shall be eligible to apply for MSME Registration Online. At present Aadhar Number is mandatory for issuance of MSME Certificate
2. The MSME certificate is a permanent certificate with lifetime validity
3. After filing online MSME application form, the MSME/SSIRegistration Certificate shall be issued immediately
4. No physical copy of MSME Certificate shall be issued

What Is The Procedure to Obtain an MSME Registration Online?

The procedure is easy and straight forward. Following details are required to be submitted:

1. A valid Aadhaar number
2. Name of the applicant as per the adhaar card
3. Social category to be selected form the given options
4. Gender
5. To be mentioned if physically handicapped
6. Name of the Enterprise/ Business that will be printed on the MSME Certificate
7. Type/ Structure of organization – Sole proprietorship, LLP, HUF etc
8. PAN number
9. Location of the plant
10. Office address may be mentioned if is different from the plant address
11. Mobile number of the applicant
12. Email ID of the applicant
13. Date of commencement of the Business
14. Bank Account number and the IFSC number
15. Main business activity – Manufacturing or Service
16. Sub-category of the business category to be selected, which is associated with a 2-digit NIC code.
17. Additional Details of the business
18. Number of employees
19. Total investment made in the plant & machinery / equipments
20. A scanned copy of Adhaar card has to be attached in jpg format

Original Source- https://swaritadvisors.com/learning/micro-small-medium-enterprises/

Read More

LLP Registration Procedure

What is LLP?

Limited Liability Partnership (LLP) is a body corporate formed and incorporated under the LLP Act, 2008. LLP is a legal entity which has a separate identity from its partner. LLP is a newly introduced corporate entity which aimed at small and medium-sized business.

Why should you go for LLP?

LLP is a partnership where one get the benefits of some features of partnership and companies together. Recently, small and medium entrepreneurs have started opting for Limited Liability Partnership considering the following advantage:

• Benefits of both partnership and companies;
• No minimum capital requirement;
• Advantage of Tax Benefits;
• Lower compliance requirement;
• Perpetual Succession;
• Low cost of incorporation;
• Liability of partners is limited to the contribution mentioned in the agreement.

What is the procedure of LLP incorporation?

Step 1:
All the Designated Partners of proposed Limited Liability Partnership has to apply for Designated Partners Identification Number (DPIN). DPIN application shall make in e-form DIR 3.
Step 2:
The Designated Partner whose signatures are to be affixed in e-form shall register their DSC on MCA portal.
Step 3:
File the Form 1 for reservation of name of proposed Limited Liability Partnership. You can select up to 6 proposed name of LLP in form 1. Also, need to provide the details of minimum 2 designated partners of proposed Limited Liability Partnership. One partner shall be a resident of India. Any individual or Body corporate can be Partner of Limited Liability Partnership.
Step 4:
After the reservation of name, the applicant shall file the ‘Form 2’ for incorporation and subscription. Inform 2, the details of partners, the amount of proposed monetary value of partners contribution, Subscriber sheet, proof of registered of add, consent form from partners need to be given and if proposed name include any banking, venture, CA, CS, Trademark etc, then in principle approval of the regulatory authority need to attach in form 2.
Step 5:
On receipt of complete application, Registrar will issue a certificate of incorporation after satisfying of LLP Act.
Step 6:
After the successful registration, the draft of LLP agreement needs to be incorporated in line with LLP Act. The agreement is not mandatory at the time of registration can be filed within 30 days of incorporation. All the partners are liable to comply with the provisions of Agreement at all time. Followings are the some imported clause need to be incorporate in Limited LiabilityPartnership agreement:

• Name, Object and Register Office of Limited Liability Partnership;
• The initial Contribution of the LLP by Partners;
• Valuation of Non-Monetary contribution;
• The net profits or losses sharing ratios;
• Detail of Designated Partners;
• Interest payable on Capital Loan;
• Remuneration payable to the working partners;
• Mode of operation of Bank Accounts;
• Appointment of arbitrator;
• Rights and Duties of Partners;
• Rights and Duties of Designated Partners;
• Indemnity clause;
• Goodwill clause;
• Procedure to appoint Auditor;
• Admission of New Partner;
• Cessation of Existing Partners;
• Winding up of Limited Liability Partnership;
• Amendments of Limited Liability Partnership;
• Extent of Liability of Limited Liability Partnership;
• Liability of Partners in Limited Liability Partnership;
• Other business if any carried

Step 7:
The LLP agreement once finalized need to be filed in Form:3 (Information with regard to Limited Liability Partnership agreement) and Form 4 (Notice of appointment of partner and his consent). The agreement may be filed along with Form 2 or within 30 days of the incorporation.
 
Original Source- https://swaritadvisors.com/learning/llp-registration-procedure/

Read More