benefits to startups / msmes amidst covid-19 · & services investment < inr 1 crore and...
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BENEFITS TO STARTUPS / MSMES AMIDST COVID-19
Contents Introduction What are MSMEs?
What are Startups?
Benefits on MSME / Startups
Registration
Registration Process
Measures Taken by Various Departments During COVID-19 Situation
Proposals Announced During AtmaNirbhar Bharat Abhiyan Presentation
Crisis Management During COVID-19 –Turning Challenges into Opportunities
Why Outsourcing?
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Why Us? Technology we use
Services we offer Industries Served
Partners Our Clients
Our Corporate Offices
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“Atmanirbhar Bharat Abhiyan” or “Aatmanirbhar Bharat Scheme”
In his third address to the nation on 12 May 2020, amid the pandemic, Prime Minister Narendra Modi announced an INR 20-lakh crore economic relief package - “Atmanirbhar Bharat Abhiyan” or “Aatmanirbhar Bharat Scheme”.
The relief package was unveiled in 5 tranches from 13 May 2020 by Finance Minister Mrs. Nirmala Sitharaman.
Several measures have been announced by the Finance Minister that would help the Micro Small Medium Enterprises (MSMEs)sector and Startups to grapple with the devastating impact of this global pandemic.
Role of MSMEs in Indian Economy :
MSMEs are backbone of the Indian economy and has helped economy grow.
MSME Sector contributes significantly to the Indian Economy in terms of Gross Domestic Product, Exports and Employmentgeneration.
MSME Sector contribute 29.7% to National GDP and 49.66% of Indian Exports comprises of MSMEs.
Even Startups would be eligible to avail benefits of various incentives and schemes already existing in place and relief measuresrecently announced for the MSME Sector under the Aatmanirbhar Bharat Scheme if they are eligible to register as MSMEs.
MSMEs
Startups
Introduction
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VALUE PROPOSITIONIntroduction toMGB
What are MSMEs? Micro, Small and Medium Enterprises Development Act, 2006
(“MSME Act”) notified on 18 July 2006 and came into force from 2
October 2006.
Classes of MSMEs
Composite Criteria : Investment and Annual Turnover (to come into effect from 01.07.2020)
Classification Micro Small MediumManufacturing
& Services
Investment < INR 1 crore
and
Turnover < INR 5 crore
Investment < INR 10 crore
and
Turnover < INR 50 crore
Investment< INR 50 crore
and
Turnover < INR 250 crore
• Any enterprise except for a trading entity can become a MSME.
• Ministry of Micro, Small and Medium Enterprises vide notification dated 01 June 2020 notified the following criteria forclassification of Micro, Small and Medium enterprises :
Manufacturing Enterprises The Manufacturing Enterprises are defined in terms of investment in
Plant & Machinery
Service EnterprisesThe enterprises engaged in providing
or rendering of services and are defined in terms of investment in
equipment
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What are MSMEs?
VALUE PROPOSITIONIntroduction toMGB
What are Startups? • Startups are basically Companies having
a product that is unique and that are in
early stages of development.
• Under the Startup India Action Plan,
Startups that meet the criteria under
G.S.R. notification 127 (E) are eligible to
apply for recognition.
Eligibility Criteria for Startup Recognition :
• The Startup should be incorporated as a private
limited company or registered as a partnership
firm or a limited liability partnership.
• Turnover should be less than INR 100 Crores in
any of the previous financial years.
• An entity shall be considered as a Startup up to
10 years from the date of its incorporation.
• The Startup should be working towards
innovation/ improvement of existing products,
services and processes and should have the
potential to generate employment / create
wealth.
• An entity formed by splitting up or reconstruction
of an existing business shall not be considered
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What are Startups?
Public Procurement Policy for Micro & Small Enterprises (MSEs) Order, 2012
Concession on Patent & Trademark registrations
Bar code registration subsidy
IT / ITES units registered as MSMEs
Collateral free loans
Focused approachby Banks
Protection against delay in payment
NSIC ICRA Performance & Credit Rating Scheme
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Benefits on MSME/Startup Registration
Relief under The Insolvency and Bankruptcy Code, 2016
Concession on Patent andTrademark registrations A 50% fee concession is provided for
MSMEs vis-à-vis large entities on Patent
and Trademark filing fees.
Startups are provided a rebate of 80% on
patent fees as compared to the fee paid by
legal entity.
Protection against delay in payment
Buyers to pay Invoice on or before 45 days or
pay compounded interest to MSMEs.
Specialised portal created for facilitating
MSMEs to report cases of the delayed
payment of bills.
Collateral Free Loans Credit Guarantee Fund Scheme (“CGF
Scheme”) makes collateral-free credit
available to the MSEs.
Both the existing and the new enterprises are
eligible to be covered under the said scheme.
The Trust set up would make good the loss
incurred by the lender up to 85 per cent of the
outstanding amount in case of default.
MGB Profile
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Benefits on MSME/Startup Registration
Bar code registration subsidy The scheme makes it highly affordable for
MSE units to adopt GS1 global standards
in barcoding.
The Ministry of MSME reimburses 75% of
the one-time registration fees and 75% of
the annual renewal fees incurred for the
first three years.
NSIC ICRA Performance & CreditRating Scheme
This scheme seeks to establish
independent, trusted third party opinion
on capabilities and credit - worthiness of
MSEs, and makes credit available at
attractive interest rates and ensure better
productivity.
Under this scheme (as per the turnover of
the MSEs) a percent of Rating Agency
charges are reimbursed by Ministry of
MSME.
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Benefits on MSME/Startup Registration
Many banks / financial institutions charge
lower rates of interest to the Enterprises
which are registered as MSMEs.
Focused approach by Bankstowards MSME
Public Procurement Policy forMicro & Small Enterprises (MSEs)Order, 2012
Minimum 25 per cent of products produced
and services rendered by MSEs to be part
of procurement plan of Central Ministry /
Departments / PSUs.
3 per cent from within the target shall be
earmarked for procurement from MSEs
owned by women
4 per cent for procurement from MSEs
owned by SC / ST entrepreneurs.
Issue of tender sets are free of cost and
payment of Earnest Money is exempted.
MGB Profile
Various other schemes announced by Ministry of MSME to:
Facilitate / promote adequate flow of credit
from financial institutions/banks.
Support for technology up-gradation &
modernization.
Modern testing facilities and quality
certification.
Entrepreneurship development and skill
upgradation through appropriate training
facilities.
Support for product development, design
intervention, and packaging.
Assistance for better access to domestic
and export markets etc.
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Benefits on MSME/Startup Registration
Relief under The Insolvency andBankruptcy Code, 2016 (“Code”) Promoters of MSMEs exempted from
ineligibility criteria to bid, as long as they
are not wilful defaulters.
The rationale is that a business of an
MSME attracts interest primarily from its
promoters.
IT / ITES units registered as MSMEs
Various incentives are given by State
governments to the IT / ITES units which are
registered as MSMEs.
Registration / Stamp duty concessions.
Incentive on Power Tariff and Electricity Duty,
Capital Subsidy, GST incentive etc.
MSMEs
• Existing or new Enterprises can file Udyog Aadhaar Memorandum (“UAM”) online athttp://udyogaadhaar.gov.in .
• Where online filing is not possible, offline application may be submitted to the concernedDistrict Industry Center.
• Enterprises which have filed Entrepreneurship Memorandum-I or EntrepreneurshipMemorandum-II or both, or the holders of Small Scale Industry registration may also file theUAM.
Startups• Enterprises less than 10 year old can make Startup application online at
https://www.startupindia.gov.in/
• An entity formed by splitting up or reconstruction of an existing business shall not beconsidered a "Startup“.
• An entity incorporated as a Private Limited Company, Registered Partnership Firm or aLimited Liability Partnership can only register themselves under the startup India scheme.
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Registration Process
GOODS & SERVICES TAX (GST)MGB Profile
Audit under provisions of GST Ministry of Corporate Affairs (“MCA”)
“Companies Fresh Start Scheme" and "LLPSettlement Scheme, 2020” announced to allowdefaulting Companies / LLPs to make a fresh start.
General Meetings through video conferencingallowed and Time gap for conducting boardmeetings relaxed to 180 days from present 120days – for the first two quarters of FY 2020-2021
CARO 2020 will now be applicable from F.Y. 2020-21 and filing of Form INC 20A (Commencement ofBusiness) relaxed by additional period of 6months.
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Measures Taken By Various Departments During COVID-19
Reserve Bank of India (“RBI”)
Moratorium of total 6 months i.e. till 31 August2020 on payment of instalments and loans.
A one-time restructuring of existing loans toMSMEs without a downgrade in the assetclassification.
INR 15,000 crore to SIDBI to enable it to provideliquidity support to MSME sector and meetsectoral credit needs.
GOODS & SERVICES TAX (GST)MGB Profile
Audit under provisions of GST
Ministry of Labour and Employment
GOI will pay EPF contribution of both employerand employee for the months from March toAugust for those establishments that have upto100 employees and 90 percent of whom earnunder INR 15,000 monthly wage.
For establishments not covered above, theStatutory EPF contribution of both employer andemployee has been reduced to 10% for themonths of May, June and July 2020.
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Measures Taken By Various Departments During COVID-19
Ministry of Finance - Goods & Services Tax (“GST”)
Due date for Annual Return and GST Audit for F.Y.2018-19 extended to 30/09/2020.
Extension in FORM GSTR-3B, due in March-April-May2020 till last week of June 2020.
Penalties and interests waived/reduced for late filing ofGST returns.
Custom Clearance till 30 June 2020 will operate 24*7 asan essential service.
Sab Ka Vishwas (Indirect Tax Scheme) – Due dateextended to 30 June 2020 without interest.
Companies can also now file return in FORM GSTR 3B,for the period 21 April 2020 to 30 June 2020, throughEVC (electronic Verification Code). Only Proprietorshipand Partnership Firms had this option earlier.
Entities having NIL return in FORM GSTR 3B, now canfile through SMS using registered mobile number andverified based on one time password.
Guaranteed Emergency Credit Line (GECL) Scheme Under the Scheme, 100% guarantee coverage to beprovided by National Credit Guarantee Trustee CompanyLimited for additional funding of up to Rs. Three lakh croreto eligible MSMEs and interested MUDRA. borrowers, inthe form of a Guaranteed Emergency Credit Line (GECL)facility.
Equity infusion for MSMEs through Fund of FundsEquity infusion of Rs. 50,000 crore for MSMEs throughFund of Funds. This will establish a framework to helpMSMEs in capacity augmentation. This will also provide anopportunity to get listed in stock exchanges.
Subordinate Debt for Stressed MSMEs
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Proposals Announced During AtmaNirbharBharat Abhiyan presentation
Provision of Rs 20,000 crore as subordinate debt toprovide equity support to the stressed MSMEs. This willbenefit 2 lakh stressed MSMEs.
Tax Collection at Source for the specifiedreceipts & Tax Deduction at Source (non-salaried specified payments) rate reduction forF.Y. 2020-21 by 25%.
All pending refunds to Charitable Trusts andNon-Corporate Business and Professionsincluding Proprietorship, Partnership, LLP andCo-operatives shall be issued immediately.
Due date for Income Tax Returns for F.Y. 2019-20 will be extended from 31 July 2020 & 31October 2020 to 30 November 2020 and forTax Audit from 30 September 2020 to 31October 2020.
Date of Assessments getting barred on 30September 2020 extended to 31 December2020.
Period of Vivad se Vishwas scheme for makingpayment without additional amount extended to31 December 2020.
Tax Measures
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Proposals Announced During AtmaNirbharBharat Abhiyan presentation
Minimum threshold to initiateInsolvency proceedings hasbeen raised to INR 1 crorefrom INR 1 lakh which largelyinsulates MSMEs.
Suspension of fresh initiation ofInsolvency proceedings up toone year, depending upon thepandemic situation.
Empowering Centralgovernment to exclude COVID19 related debt from thedefinition of default.
Special insolvency resolutionframework for MSMEs underSection 240A of the Insolvencyand Bankruptcy Code, 2016 tobe notified soon.
Ease of Doing Business
e-market linkage for MSMEsto be promoted to act as areplacement for trade fairsand exhibitions.
Fintech will be used toenhance transaction basedlending using the datagenerated by the e-marketplace.
MSME receivables fromGovernment and CentralPublic Sector Undertakings tobe released in 45 days.
Global tenders will bedisallowed in Governmentprocurement tenders uptoINR 200 crores.
Other important announcements
Decriminalization of Companies Act defaults Majority of Compoundable
offence sections will be shiftedto Internal AdjustmentMechanism.
Decriminalization ofCompanies Act violationsinvolving minor technical andprocedural defaults such asshortcomings in CSRReporting, Inadequacies inBoard Report, filing defaults,delay in holding AGM etc.
Lower penalties for all defaultsfor Small Companies, One-person Companies, ProducerCompanies & Startups.
1. Tracking expenses against the Revenue Status :
2. Understanding amendments in various laws :
4. Liquidity challenges :
3. Restructuring of businesses :
It is important for businesses to conduct a proper assessment of their fixedand variable expenses vis a vis revenues, this will help the entrepreneursin planning ahead in the current disconcerted market
The Corporates need to identify and keep track of the changes in existinglaws which will impact their businesses and accordingly change strategies,induct experts and accordingly formulate suitable action plan.
Handling these challenging times may require the organizations to adoptproactive realignment / restructuring measures. Businesses that wish totake advantage of these opportunities can consider restructuring throughexpansions, joint ventures, and divesting struggling and non-core assets.
The Companies might have to face the liquidity challenges forcing them toidentify alternate financing modes. Various fund raising strategies will haveto be formulated taking into consideration the laws applicable to theCompany and its implication.
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Crisis Management During COVID-19 -Turning Challenges into Opportunities:
5. Contractual Obligations:
Businesses will have to consider what obligations can and cannot be metduring the national lockdown, and whether contracts can continue afoot onceCOVID-19 restrictions are lifted. Relevant contracts needs to be checked tosee whether force majeure provisions will apply to COVID-19 and ensure thatany notice and timing requirements are complied with and consider mitigationsteps.
7. Reducing costs through Outsourcing :
Handling these challenging times may require the organizations to adoptproactive realignment / restructuring measures. Businesses that wish to takeadvantage of these opportunities can consider restructuring throughexpansions, joint ventures, and divesting struggling and non-core assets.
6. Going digital to reduce concentration risk :
Its become imperative to digitally transform our places of work to be able tooperate effectively. Those companies who are able to use technology well tokeep going and rethink their business model for the future by fast-trackingdigital transformation will be ones ahead of their competition.
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Crisis Management During COVID-19 -Turning Challenges into Opportunities:
Why
Out
sour
cing
??
Promoters can focus on Core Business Activities
Strengthen your systems and processes
Real Time Support and Quick Turnaround
Professional personnel at Fraction of Cost
Best Technical / Experienced Team
All non core activities are our responsibility
Ensuring optimum utilization of resources
Easily accessible and always at your service
Providing value for money
Using our experience for your growth
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Why Outsourcing?
Our Services
Business Setup
Accounting
Legal and Secretarial Taxation
Transaction Support
One Stop Solution
360° approach for all needs
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Why Us?
Technology We Use
// 1 9
MGB is Authorized Partner
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A standard operating procedure (SOP) setupincludes your checklists, reporting templates anddata storage processes, ready to give you the mostseamless and stress free accounting experience!
Business Support Services
IT Risk & Cyber Security is a risk managementconsultancy company under the brand of MGBgroup.
IT Risk & Cyber Security
A start up is a young company that is beginning to develop and grow, is in the first stages of operation, and is usually financed by an individual or small group of individuals.
Start Up Advisory
CSR provides 360 degrees services forCorporate Social Responsibility. Outsourcing yourcomplete. CSR to us enables expertise andquality delivery at efficient costs.
CSR & Sustainability
Our Assurance and Business Consulting practice strives to offer highly effective and result-oriented solutions.
Assurance
Our Internal Audit & Risk Consulting Services deploys teamsexperienced in financial and operational internal auditing, IT, fraud analytics, risk management and enhance organizations.
Operations & Risk Consulting
Our highly experienced team of professionals has been advising and assisting companies across a spectrum of matters relating to tax advisory & planning, compliance, withholding tax.
Tax Regulatory & Advisory
M&A team provides advisory support and execution process of merger, demerger, takeover and slump sale.
Asset Management
Corporate finance services help clients to build and maintaintheir business objectives and balance risks. We help ourclients on value creation through understanding their businessmodel.
Corporate Finance
Assistance in foreign trade policy / customs and export benefit claims.
Goods & Services Tax (GST)
Compliance and implementation of the provisions of companies act, 2013. Filings under companies act.
Corporate Law & Secretarial
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Services We Offer
/ / Market Leaders
Education Non Profit Org
HealthcarePharmaceuticalsINDUSTRIES
Media And Entertainment
Financial Services / NBF
Insurance Companies
Real Estate &Construction
Banks & Mutual Funds
Sports & Management
Private EquityGroupManufacture
Government /Public Sector
Family Offices
Hospitality &Leisure
Gems & Jewellery
Franchise Retail Industry
INDUSTRIES
Services &Consulting
Paid Communication
IT / ITES
TradingCompanies
INDUSTRIES
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Industries Served
PARTNERS
Jeenendra BhandariF.C.A,CPA (Delaware USA)
Jeenendra , is a partner with over 20 years of
experience. He is a fellow member of the
institute of chartered accountants of India and a
certified public accountant from Delaware United
States.His focus is advisory and structuring and he
provides inputs from Indian as well as
international business perspective .
His experience spans across Strategic,
operational and financial due intelligence,
valuations, and assurance .
// 2 2
Harshvardhan, is a principal with over 12years of
experience. He is a chartered accountant and a
CFA Level III candidate by qualification. He
takes care of transaction services practice at the
firm.
His work specialities includes business plans &
financial modelling, valuations, Due diligence,
fund raising & business reviews. He has worked
across industry segments, including - Real
Estate, Media & Entertainment, Education,
Infrastructure, Travel. He is also a
registered valuer with IBBI for Asset Class
Securities & Financial Assets.
Harshvardhan Bhandari CA, CFA
Hitendra Bhandari (D.I.S.A.) & (IFRS) from the ACCA (U.K.)
Hitendra is a partner with MGB and leads
the tax practice of the firm and also looks
at the internal quality and client
relationship within the firm.
He is a member of ICAI and a Certified
Public Accountant from Colorado, United
States. He is also a Diploma in
Information Systems Audit (D.I.S.A.) and
also qualified as a Diploma in
International Financial Reporting
Standards (IFRS) from the ACCA (U.K.).
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PARTNERS
// 2 3
Muffaddal is a qualified Company
Secretary and LL.B with around 10 years
experience in the field of Legal and
Compliance area.
He currently leads Legal, Compliance and
Business Support vertical at MGB
Business Advisors Private Limited. He
focuses on domestic and cross border
business set up, advising startups and
Corporates on regulatory framework and
other varied corporate law matters.
Muffaddal JawadwalaCS & LL.B
Mahesh Bhat tar(D.I.S.A.), M.Econ., C.A.
Mahesh is a chartered accountant and a
law graduate. He holds a Masters degree
in Economics and a Diploma in
Information System Audit.
He has experience of more than 7 years
and is an expert in dealing with indirect tax
issues faced by diverse clientele across
Central & State Indirect Taxes across
forums. He also delivers regular lectures
on Indirect Taxation at academic as well
as professional level.
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/ / Market Leaders
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Key Clients
/ / Market Leaders
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Key Clients
Location Address
Mumbai Peninsula Business Park, 19th Floor, Tower B, Lower Parel, Mumbai400013 T : +91 22 6124 6124
Delhi / NCR 614-619, 5th floor, SB Tower, Near Jubilant Life, 1A/1, Sector 16A, Filmcity, Noida (NCR) 201301 T : +91 120 480 4922
Jaipur J-16, Lalkothi J-Scheme, Sahakar Marg, Behind IOC petrol pump, Jaipur– 302015 T : +91 141 274 1674
Bengaluru 118, DBS House, 26, Cunningham Road Bengaluru- 560052 T : +91 80 4040 7148
Presence in India - OFFICES
F i n d us at/ / w w w. m g b a d v i s o r s . c o m
Delhi
Mumbai
Jaipur
Bengaluru
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