Registration of micro, small and medium enterprises under MSME Act is a very powerful medium to enjoy the regime of incentives offered by the Centre generally contain the following:
1. Protection against delay in payment from Buyers and rights of interest on delayed payment
Combined reading of Section 15 & 16 of the MSMED Act 2006 provides that If a buyer fails to make payment of the amount to the MSME supplier within 45 days , the buyer shall be liable to pay compound interest with monthly rests to the supplier on that amount from the appointed date at the rate of three times of the Bank Rate notified by RBI.
Corporates, in case of MSME supplier has to make separate disclosure of non-payment in their financial statement.
2.Time-bound resolution of disputes with buyers through conciliation and arbitration
3. Enterprise gets registration under MSMED Act.
4. Easy finance availability from Banks, without collateral requirement.
5. Lower interest rates and availability and access to greater credit:-
In the absence of collateral security (any property/cash given as a security against a loan), many business owners may find it extremely hard to secure a loan for starting in their industry.
However, with an MSME Registration, all banks are specifically instructed to offer loans at interest rates lower than the usual and one may be able to avail this benefit from several banking institutions for their financial needs.
6. Government tenders:-
Preference in procuring Government tenders, Waiver in security deposit in government tenders, Free of cost government tenders, Weightage in price preference.
7. ISO certification/ patent and trademark:-
Reimbursement of ISO certification Expenses subsidy on ISO certification/ patent and trademark
8. Registration with NSIC:-
Registration with NSIC, Subsidy on NSIC performance and credit rating, Financial assistance for setting up testing facilities through National Small Industries Corporation.
9. Reservation policies to manufacturing / production sector enterprises.