Month: January 2019

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Financial Planning For Companies

What is Financial Planning?

What is Financial Planning

Financial planning is a crucial part of a company’s financial management, regardless of the size of the business. During financial planning, you need to decide how you will plan your finances, from where you will arrange the same, and how you will bifurcate it under different subheads to achieve your business’s objectives.

It revolves around the strategies, actions, and programs to optimally utilize the funds. It is planned instantly after setting the targets and visions.

Resources including finances are not available on abundant, and thus planning its usage is crucial to ensure optimum utilization. You should plan your funds and resources in such a manner that your business never runs short of budget and can function smoothly.

Importance of Financial Planning

Importance of Financial Planning

Financial planning helps you to define your company’s both long and short-term goals and craft a stable proposal to meet both these goals. Let us look in details some of the benefits of accurate financial planning

The smooth functioning of the business

Proper financial planning helps you to derive your policies more conveniently. Thus, you can run your business including all administrative functions effectually.

Business expansion

If you can manage your current finances to produce better results, you will be in a situation to take future endeavors and grow your business.

Cash inflow

Study your expenditures meticulously, plan where it can be curtailed and accordingly also try to increase your income from different sources. This overall process will ensure that you never run short of funds for your business.

It Enhances security

Unplanned finances can lead to uncertainties in the business and also in the personal life. So, to reduce that, it is vital that you plan your resources properly.

Goodwill

Before creating any relationship with your company, investors and other stakeholders focus on your profit, and modus operandi of business. So, a good income and expenditure statement is crucial and is sure to get the confidence of your customers and investors.

Apposite Capital Structure

You can arrange funds from numerous sources and for different durations. To plan this appropriately, to help you to bring in funds from right sources at a suitable time, a clear vision and proper financial planning are inevitable.

Steps to do proper Financial Planning for small business.

Until and unless you start assigning numbers to your plans, it is not concrete and is only in the conceptual phase. Though the business plans and marketing plans might be exciting to read, the feasibility of the same comes in to picture only when you assign figures to it. And, assigning numbers and figures to your plans and giving life to them starts happening in the financial planning phase.

Linda Pinson, the owner of publishing and software business ‘Out of Your Mind and Into the Marketplace’ has rightly said about financial planning that it tells an entrepreneur whether his business plan is viable and profitable or whether he is wasting his time or money or both by focusing on it,

Let us now look at the steps to plan your finances in the most effective manner:

1. Review your existing plan

While financial planning is not the same as your financial statements, it is essential to look into your current financial statements to understand the current status of the business. You also need to revisit your strategic plans and try to modify the loopholes if any.

Rethink on what you want to achieve, gaze where you stand, and make a plan accordingly; decide the financial effect in the upcoming twelve months, which includes expenses on key projects like purchasing of equipment, a shift of location, an introduction of new service lines, redesigning of the web page, marketing expenditures.

2. Cultivate on your financial forecasts

Cultivate on your financial forecasts

Now that your overall objective is in place, you need to break it down in smaller segments for intricate planning and execution. Create monthly financial projections by jotting down your predicted income on the basis of expected sales and predicted expenditures on the workforce, technologies, supplies, and other overheads.

You might also go for a weekly plan depending on the cash flow and the size of your business; for new companies with limited cash, this is good as it helps in tracking the growth and in also rectifying any error.

You can use any database tool or reporting tool like Excel or Access or SAP to maintain the books of your income and expenses. Keep it simple to understand. Not necessary that your sales will generate cash immediately. So, ensure to enter them as cash inflow only when it is converted. You can maintain one projections report, and other actuals report. It will also guide you in understanding the discrepancy between your plan and actual finances.

3. Arrange finances

Once your financial forecasting is in place, now you can go ahead and decide on the sources of investments. During this stage, you need to decide where you will raise your finance and in what proportion. Your investors will be more confident on you when he sees that you are particular with your books of accounts and have clear financial planning. They will rely on your words if they know that your vision is clear and is back-up with numbers.

4. Frame contingency plan

If you are a finance student, you will know that maintaining a contingency account is imperative. For non-finance students, let us explain why. You must have commonly heard people saying that business is for those who can take a risk and this is because not all the factors in a company are under control.

For example market, change in technologies, etc. are not in your control but they might have a severe adverse effect on your business. Yes, they can have a positive impact too, but a businessman needs to be prepared for the worst come worst scenario. Contingency funds are for these scenarios. You must create a cash pool that will help you to sustain during the bad days. So, while designing your company’s financial planning, consider the contingency fund also.

5. Review and monitor

Monitoring your progress is a continuous process. Compare your projects with actuals to see the difference between them and also to understand how far you are from the target. It will help you to find the actual problem areas and rectify them before they exaggerate.

6. Take support

To run a business effectively, you will need to look into various things like finances, administration, legalities, marketing, etc. and paying equal attention to each at times might become a challenge. So, at times it is good to take the help of experts as they can help you with suggestions that you might not be able to come up with always. Don’t try to do everything yourself and take support whenever required.

Significant components of Financial Planning

Financial planning depends on various factors; the plan for a new business will not be same as that of an already established one; there will be a difference depending on the type of business and the value proposition also. To reap benefits from a financial plan, it is essential to write down the plan, keeping in mind the following components:

Proper clarity on objectives.

It is the first and one of the most crucial components of financial planning. Without knowing where you want to reach, you will not be able to draw your road map. Similarly, if your goals and are not lucid, you will never be able to achieve them. Note down your purpose and objectives in measurable terms, be specific and prioritize them accordingly.

Forecast your sales

You must have an estimation of revenue to be generated from sales in the upcoming weeks, months, quarters and year. If you can identify the pattern of your sales, it will help you to understand your business, and you can accordingly create your marketing strategies.

Plan your income tax

Plan your income tax

Maximize tax returns to ensure that you are saving tax fees wherever possible while abiding the laws and regulations. Tax can be quite cumbersome if not planned and in sync with your objectives and financial strategies.

Financial Statements.

You must create the books of accounts consisting of Income and Expenses statement, Cash Book, and Balance Sheet, which helps you to know your current financial status. While the Income and Expenses accounts give you the profit or loss, the Cash Book tells you about your cash in hand or cash in a bank, and the Balance Sheet provides clarity on the assets and liabilities.

For prediction, analyzing the current scenario is a must, and these books of accounts will help you to do it. So, update them regularly and visit them more than often.

Contingency and Risk Management Plan.

An unexpected incident can cause damage to the most detailed and precise plan. So, it is good to be prepared for catastrophic situations. Purchasing insurance products for your resources and company’s belongings is essential and helps to deal with contingency situations. It is also a good idea to buy life insurance products to ensure unanticipated situation in life.

Plan your Investment

Plan your Investment

A thorough understanding of the investment market, including banks, financial institutes, share market can help you in doing it. Spread your investment over a few sectors to mitigate risk factor. Do not rely only on one source of financing and do it after analyzing the portfolio’s risk and earning capacity; this will also make sure that you never run short of cash flow.

Cash

Significant components of Financial Planning

It is an essential component of financial planning. Plan your liquid cash judiciously and invest in other places accordingly. Depending on your business’s requirement, you should plan the ration between liquid cash and investments.

Break-even investigation

A break-even point’s study will give an idea of how many units or products you will need to sell and at what price to cover your expense. Ideally, you should plan it in such a way that your income at least covers the cost you have incurred with a minimum profit margin.

A thorough analysis of the break-even point will give you an idea on how to manage your resources, what is the price you should keep for your products when to think of growing your business, and t what cost.

Raw materials planning

You purchase raw materials or hire labor in return of the service. You should do a thorough analysis of the return on investment before making any decision. This way you will be able to keep control over your financial statements, and your liabilities will not be more than your assets.

Though at times your expenses might be more than your incomes, if it persists then that should ring the alarm bell in your mind, and you should revisit your costs.

A delegation of responsibilities and sticking to a detailed plan.

Though this might not necessarily be directly correlated to financial planning, a proper delegation of work do have an immense impact on the company’s performance and its finances.

Some Questions to guide you

Let us write down a few questions; think over them and write down the answers. It can be the guiding star in planning your finances.

  • What is the core product or service of your business?
  • In which phase of the business life cycle are you right now?
  • Where do you see your company five years down the lane?
  • Do you have sufficient funds and capital to invest in your company?
  • Are you planning to take loans or are you planning to increase your personal investments in your company?
  • What is the business module?
  • Is your retirement plan in place?
  • How much can you afford to spend to earn sufficient revenue while saving for future requirements?
  • Do you maintain your books of accounts?
  • Do you have a legal advisor or do you think you need one?
  • Do you have a financial planner or do you plan to hire one?

Business is all about taking measured risks. However, you must ensure to rush into anything and pay close attention to all your strategies, specifically your finances as that is the backbone of any business.

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How To Register A Company In India

how to register a company in india

In India, to own a company, you need to register under certain legal compliance’s. But, before jumping into the process of registering a company, it is crucial we need to understand the various types of business modules in India. Once you can decide on the module, it will be easier for you to understand the process of registration also.

Types of Companies

The different types of companies in India.

business registration in india
  1. One Person Company: Introduced in 2013, One Person Company is somewhat similar like sole-proprietorship and suited for single owners who want to perform within the periphery of company law. Unlike a sole proprietorship, the company is treated as a separate legal entity from the owner with limited liabilities.
  • Limited Liability Partnership: It is suited where more than one partners are there. However, the liabilities of individual partner is restricted to the amount agreed upon by them.
  • Unlimited Liability: While this form is the company is also for business where more than one person is involved, but the liabilities of these members are not restricted to business assets. But, it can extend to the personal assets of each of the partners, if required.
  • Private Limited Company: The Company and the founders are treated as two separate entities and starting from 2 it can have up to 50 members. The rights of stakeholders are limited and common public cannot invest in it.
  • Public Limited Company: To start a public limited company at least seven partners are required, and as it open to the public, it has no restriction on the maximum limit. The company and the shareholders are treated as a separate entity, and their liabilities are limited to the percentage of share held by them in the company.

Steps to Register a Company

Let us now discuss the various steps to register a company.

company registration

There are four steps to register a company:

  1. Obtain a Digital Signature Certificate (DSC). DSC is a digital signature that is made compulsory for each director under the information act 2000. It takes approximately two days to obtain the e-signatures, and the directors can proceed with the rest of the steps once it is acquired.

Since a lot of applications, forms can be submitted online, and a lot of other activities can be carried out online, it is essential to have a verified e-signature. However, it is necessary to obtain a DSC from Government approved agencies only and it must be checked before being used anywhere.

Also note, in case a director already has a DIN, he will not have to apply for once again. But, he needs to get the existing one verified to ensure its validity.

new company registration

New applicants can apply using the simple steps on the MCA portal:

  • On MCA homepage, under MCA service, click on “Acquirer DSC.”
  • Select on “Director” and key in your DIN precisely.
  • Only once the system verifies the number, it will allow you to proceed.
  • You will have to finish the remaining of the form with the utmost concentration. The information should be the same as DIR-3 or DIR-6, whichever the director has.
  • Click “Next.”  In case the system finds some mismatch in the information, it will throw an error. The information submitted while applying for DIN and the information here should be the same. Without which the director cannot proceed.
  • Once you fill in all the details correctly, and carefully, you can select DSC.
  • Click “Select Certificate” and ensure to select the correct DSC while browsing through the list of it.
  • If the DSC is already tagged to the DIN, there will be a message on the same. In case there is any separate DSC tagged to a DIN, then that will also be intimated to take confirmation if any change is desired.
  • Key in the system generated code and get yourself verified as human.
  • Agree to the terms and conditions by tapping on “I Agree.”
  • Submit the form and acknowledge the information that appears on the screen.
  • Take a print out of the acknowledgment slip for future reference.

The process is same for managers, CEOs, CFO, or Practicing Professionals; they only need to select their respective field instead of “Director’ post clicking on “Register DSC.” Rest of the process is the same as explained above.  Also not, instead of DIN, PAN number is the critical validating factor for the rest except Director.

  •  Obtain Director Identification Number (DIN) from MCA. Each director must have a DIN by submitting all the information about the self. It is a simple procedure:


a. Create an account on the MCA website and upload the DIR-3 form after completing it carefully. (In case of any change in address or other details in a later period, the same need to be updated using DIR-6). A fee is applicable to acquiring DIN.

Affix the director’s photograph and scan the copies of required documents. List of documents required are:

  • ID proof of identity.
  • Address proof.
  • Verification application containing information on the applicant’s name, his/her father’s name, DOB, the address of residence, declaration that the applicant is making the request, and signature of the applicant.


b. The form needs to be validated with a digital signature before being submitted.


c. Once the director receives his DIN, he needs to intimate the company about the same.


d. Once all the directors have acquired their DIN, the company should further intimate the Registrar of Corporates about the compiled list of DIN through an eForm and application.

  • Register under new users and create an account on the MCA webpage.

It is necessary to have a registered account in the MCA portal as it plays a very crucial role in making online transaction with the Government, like submitting an online form, payment of fees with convenience (and without paying any extra charge), and various other transactions which can be done online without going to the office physically.

You need not have to pay any fees for registering yourself and creating a new account on the MCA portal. You merely need to go to the MCA portal, click on Register and submit the required information along with a unique user id and password.

Remember this user id and password as these will be required for all the future online transactions on this portal. Post registration, for every time you log in you, need to click on “Login” and type in your registered User Id and Password.

  • Acquire the Certificate of Incorporation.

This is the last step for registering your company. It is for recording the details pertaining to the company like the address, the details of the directors, managers, and secretaries, and their shares.

Checklist of documents to be submitted for acquiring a certificate of incorporation.

  • Director Identification Number of each of the directors.
  • A Digital Signature Certificate
  • Original copy of the letter from ROC confirming that the selected name is available and can be opted as a new company name.
  • Form-1: as proof of incorporation.
  • Form-18: confirming the address of the company that is to be started.
  • Form-32: containing all the information of the to-be-appointed directors, managers, and secretaries.

Besides the above, you will need to submit the following documents

  • Passport-sized photograph(s) of the founder(s).
  • PAN Card’s copy.
  • Proof of address of the founder(s).
  • Copy of Voter card or passport.
  • Rubber stamped rent agreement, in no other language than English.
  • Clearance certificate from the landowner (known as No-Objection certificate).
  • Address proof of the proposed company.

You will have to submit all these forms and documents to Minister of Corporate Affairs for verification. These can be submitted online, and no physical copies are required. However, you can take printouts of the same for reference. Post verification, MC will send you an authorization email confirming the acceptance of the application for incorporation. The status of the application will change to “Approved.”

Selecting the Name for New Company

Why is it important to choose the right business structure

While applying for the name of your company, you must ensure that the name is unique and has not been used by any registered company earlier. Form-1A is used for this purpose. This form needs to be submitted with a processing charge of INR 500 to the Registrar of Companies. You will have to suggest four options as the proposed name of your upcoming company.

It should also contain the details like name and address of the directors. The minimum number of directors details required are:

  • For the private limited company – 2
  • For the public limited company – 7.

The primary business objective and the services or products your company will offer should be clearly stated along with the amount of capital authorized for the same.

It takes about ten days for the Registrar of Companies to confirm you. If the name is not unique, then you the Registrar of Companies’ office will suggest you with a few names, and you can choose one from them. Once your name is finally approved, you will receive a letter of confirmation.

What are the types of business structures in India

Once a company is registered with Registrar of Companies, the Certificate of Incorporation (COI) is issued by the MCA. It is proof enough to ensure that you can start operating your business using the name registered.

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Major Principles Of Brand Management

Major Principles Of Brand Management

In a subsequent as well as consistent growing economy of India, the competition in the market industry regarding who serves the best and how long has increased with the passage of time. Also in the recent years, India has shown enormous growth in terms of business startups. As a matter of fact, people are now willing start their business startups in India. 

If you too are the one who wish to enter in the Indian market industry, then Anakeen Business can help you out. You can get to know all the procedures related to the starting of the business startup. Now, whether it deals with the market research, entry, or the establishment of the business startup, Anakeen Business assists you at every step.

Peering the current marketing scenario and the mood of the customers these days, people are rushing behind the brands that can satisfy their needs and tastes. Plus, in a condition, when you are serving numerous people via your products and services, then   you need to bring all the customers on a single platform and then help them out that what is there for each of them. The basic aim should be to generate the public engagement that can help them change their perception and diagnose their expectations.

Transforming your product into a brand is something that will be the most precious asset that you can own. But have you ever thought of what it takes to make your products and services a brand? However, in our previous blogs, the experts of Anakeen Business have give you a brief idea about the brand building procedures but in case if you have missed it, you can read it here. Apart from the brand building process, you need to know that what are the basic foundations that can assist you to the manage your brand.

This article broadly consists of the expert tips and rules and principles from the professionals of Anakeen Business that you should follow in order to manage your brand.

What Is Brand Management?

What Is Brand Management

You would probably be thinking that what is brand management? Basically, it is all about capturing a targeted market for your products and services. Apart from this, you also need to build the confidence for your products and services within the minds of your current as well as forthcoming customers. Branding is all about conveying a message in various forms, creating a bond called trust among the targeted audiences and persuade an individual to purchase the item which will further establish an emotional connect with the customers.

Adding more to it, branding also helps in making customers’ perception about any product or any service. If branding has to be defined in a single statement, then it can be concluded that the ultimate aim of branding is to create the difference.

For an instance, ‘Colgate’ is a brand of toothpaste but generally when someone has to brush their teeth, they don’t that they are going to brush their teeth using toothpaste. Instead of this, people usually say, that they brush their teeth using ‘Colgate’.  So, for a customer, toothpaste means ‘Colgate’. Henceforth, that’s the effect of branding, where your product is not known by the product but it is famous on the name of the brand. Anakeen Business can help you create this difference with mastermind strategic plans for the enhancement of your business.

A strong brand can help you reduce in the perceived safety, monetary and social risks of the customer to buy a particular product. This because a customer can have a better perception of tangible goods with a brand name. A strong brand has a higher share of the whole market and it supports in the sustainability of the product in the market industry. Henceforth, it is indispensable to manage all brands and build brand equity time to time.

Importance Of Brand Management

Importance Of Brand Management
  • A perfect brand management helps in building the righteous image of the product and the company as well. And a brand manager is responsible for the overall performances of the brand. Successful brands are the result of marvelous brand management system.
  • On the whole, a brand management includes the management f both tangible and intangible characteristics of brand. In terms of product branding, the tangible include the item itself, packaging, pricing, etc. In case of services, tangible comprises of the experiences of the customer with the product. However, intangibles include the emotional instincts with the target audiences.

Major Principles Of Brand Management:

  • Define Your Brand:
Define Your Brand

Your company can only grow when it is authentic. Apart from the authenticity, the main purpose, mission, position, character and value are some of the factors that can help you in a perfect start of your business startup. You just need to focus on what you can do in an effective and best manner. Once, you have found the answer to this, go ahead and communicate your strengths along with the constancy.

There have been many times, when company’s acquisitions don’t fit in the parent organization’s brand architecture. For an instance, Microsoft acquired Razorfish—a major internet and technological innovation company—when it bought aQuantive—a digital marketing service company—for about $6 billion in 2007. But a couple of years later, Microsoft sold off Razorfish for about $530 million.

You can simply consider as, Razorfish wasn’t a good fit for Microsoft’s brand strategy.

  • A Brand Is Your Business Model:

Keep on maximizing the potential of your brand by supporting it enthusiastically and challenging it with even more power. Along with the changing trends and moods of your customers, you too will have to modify your products and services. However, at Anakeen Business, you can get the information about the transforming moods of your customers. Think of personal brands like Richard Branson, Martha Stewart or Barack Obama. These individuals almost built their businesses right atop their personal brand, and everything they offer are an extension of that brand promise.

  • Be Consistent:
Be Consistent

If it wasn’t enough, keep consistency in imparting your message and keep it different from rest of the others. If you can’t do things faster, then you need to keep a consistent pace of your business and own your position on all the reference points for all the things whatever you do. For an instance, Obama, focused on only one message during his 2008 presidential campaign: Change. Automobile major BMW has always been branded as the “ultimate driving machine”.

  • Start Inside Out:

Begin everything and work on each and every factor that relates to your organization. For an instance, all those people who are working for you can let you know that what they do possess a perception about your company. In other words, it can also be concluded as what they think of your brand. And that is where you can hit a game changing masterstroke in front of your customers.

This is exactly where, you can begin differentiating your products and services and your business startups from rest that are available in the marketing industry. Work in such a way that can put a powerful impact even beyond the walls of the marketing. This is how online apparel store, Zappos empowers its employees to build customer perception about the brand.

  • Connect At The Emotional Level:
Connect At The Emotional Level

There are many organizations that consider the product a brand and limit it just to the logo, name, website, public relations exercise or the television commercials. However, these are not just a brand but are the tools of the brand management. A brand is a much larger thing. In other words, it can be said as it a desirable idea that is manifested in the products or services, places, people, and experience.

Starbucks, that serves people coffee, created a third space of experience that was exclusive and desirable lest people do prefer them and pay for the overpriced coffee.

What this basically signifies? It means, you need to sell something which satisfies not only the physical needs of the people but also their emotional instincts. Get them attracted towards your products by making your simple thing in a different manner. Slowly and steadily, people will surely start to identify you and your brand as well.

  • Empower Brand Champions:

Appreciate those people as well who love your brand and help to drive home a message, lest they can be a part of the brand building process. In case your brand stops telling that what you should do and what you shouldn’t, it’s about time you need to start evaluating the brand’s promise that you made earlier with your target audiences.

Just go and speak to someone who is working in an organization like Apple’s retail outlet, for instance, and you will clearly be able to see that how passionate they are about their organization. It is something like a culture and a lifestyle over there.

I hope that you might have got a clear picture on how you should go ahead with the brand management of your products and services. However, in case, you want to look forward a helping hand for your business startup, then you can reach out to the professionals of Anakeen Business. Their experts solutions can assist you stand strong in the competitive field of Indian market.

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Benefits Of MSME Registration in 2019

Benefits Of MSME Registration

India is such a country that welcomes everyone with numerous opportunities. And at Anakeen Business, the India entry expert; all the innovative ideas of the budding entrepreneurs are appreciated with a boost. Adding more to the services of Anakeen, they also help new entrepreneurs of the market industry to enter, establish and flourish differently among the existing market.

However, before you enter in India with your product, you need to know about the policies which can further assist you in the ease of doing business in India. In this article, I’m going to tell you about one such policy by the Indian government and that is the MSMED Act for micro, small and medium types of business startups.

MSMED Act, Registration, Benefits

Benefits Of MSME Registration

MSME Act:

MSME is the abbreviated form of Micro-Small-Medium Enterprise. The Micro, Small and Medium Enterprises Development Act came into existence in the year 2006.

The basis of categorization of three types of business enterprises are as follows:

1. Micro Enterprise:

In a micro enterprise, there is an investment on machinery and plants don’t exceed beyond Rs. 25 lakh and on equipments will be wrapped within Rs. 10 lakh only.

2. Small Enterprise:

A particular enterprise is said to be small when the investment on the machinery and plats can exceed Rs. 25 lakhs but it shouldn’t go beyond the Rs. 5 crores. Also, on equipments, investments can go further beyond the 10 but not more than 2 crores.

3. Medium Enterprise:

We can consider an enterprise as medium once the investment on the plants and machinery exceeds 5 crores of rupees but doesn’t go beyond of Rs 10 crores. Also, over the equipments for doing business, the investment can exceed beyond Rs. 2 crores but not more than Rs. 5 crores.

MSME Registration:

Register In MSME Registrations

As mentioned above, we can put these three types of business enterprises in the categories of micro, small and medium ones. MSME enterprises are the backbone of the economy of any nation. Apart from this, they are also an engine of the economic growth that promotes equitable development for everyone. Basically, an MSME enterprise majorly deals with the labor-intensive rather than the large corporate sectors. Also, an MSME enterprise promotes employment at a very high potential and lowest capital cost. Majorly, it contributes to the industrial production and exports in India. Adding more to it, an MSME enterprise plays a pivotal role in the development of the industrial economy.

As MSMEs are highly beneficial in the overall development of the nation, henceforth, in order to promote it on a high level, the MSMED or the Micro, Small & Medium Enterprises Development Act of India, 2006 came into existence. Adding more benefits, the MSMED Act facilitates the promotion and development of enterprises through incentives, schemes, and subsidies. For availing the benefits of MSMED Act, you should be registered through MSME Registration.

Who Can Register In MSME Registration?

MSME Registration
  • Hindu Undivided Family (HUF)
  • Private limited company
  • One person company
  • Partnership firm
  • Producer company
  • Limited company

Benefits Of MSME Registration:

1. Collateral Free loans from banks:

A policy was launched by the government of India specifically for the Micro and Small Enterprises and that is the Credit Guarantee Fund Scheme (CGS). This scheme helps in the availability of the collateral-free credit to the micro and small enterprise sector. Under this scheme, either new or the existing business enterprises are there, both of them are eligible for collateral-free loans from the banks. The Ministry of Micro, Small and Medium Enterprises, Government of India and Small Industries Development Bank of India (SIDBI), established a Trust that was named as Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). This was done for the implementation of the Credit Guarantee Fund Scheme for the Micro and Small Enterprises.

Collateral Free loans from banks

2. 50% Subsidy On Patent Registration:

There is another benefit of MSME Registration is that all those enterprises who have the MSME Registration Certificate can get a subsidy of upto 50% on the patent registration. Enterprises can get it done by an application to the concerned ministry 

3. 1% Exemption On Interest Rate On Overdraft:

Enterprises can now avail upto 1% of exemption in the interest rates on overdrafts who have the MSME Registration.

4. Eligible For Industrial Promotion Subsidy:

All those enterprises that possess the MSME Registration become eligible for the Industrial Promotion Subsidy. This may also be prescribed on behalf of the government of India.

5. Concession In The Bills Of Electricity:

Enterprises who have registered themselves under MSME become eligible for the concession in the electricity bills. You can avail this benefit via an application to the electricity department along with the MSME Registration Certificate.

6. Reimbursement Of ISO Certification Charges

Enterprises that have MSME Registration Certificate can claim reimbursement of ISO Certification expenses by making application to respective authority.

MSME

7. Protection Against Delayed Payments:

There is a proposal by the government of India under the Ministry of Micro, Small and Medium Enterprises specifically for those business enterprises that . Under this proposal, enterprises will get a protection against the delay in the payments from the Buyers and right of interest on delayed payment through conciliation and arbitration and settlement of dispute will also be done in the minimal time. In case, if any micro or small enterprise has the certificate of MSME Registration, then the buyer has to make the payment right over there or by the date agreed or else, it can be done in between of the time period. In case, there is no agreement over the dates of the payment, then the buyer has to make the payments within fifteen days of acceptance of goods and services. Adding more to this, if there is a payment which is due to micro or small enterprise cannot exceed forty-five days from the day of acceptance or the day of deemed acceptance. The penal interest chargeable for delayed payment to an MSME enterprise is three times of the bank rate notified by the Reserve Bank of India.

I hope, you might have got an idea about the relevance of the MSME Registration. As we at Anakeen Business do care for you and appreciate your innovative ideas for the business startups, henceforth, it becomes crucial that we do impart all the information that can help you in ease the process of entry in the Indian market. For more details and any queries or if you wish to take experts’ advice for your startup, then you can undoubtedly connect to the professionals of Anakeen Business.