BENEFITS TO STARTUPS / MSMES AMIDST COVID-19 · & Services Investment < INR 1 crore and Turnover < INR 5 crore Investment < INR 10 crore and Turnover < INR 50 crore Investment< INR

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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.….. 13

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Why Us? Technology we use

Services we offer Industries Served

Partners Our Clients

Our Corporate Offices

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© 2020. This document is for your company’s internal use only and may not be distributed to any other third party. // 2

“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


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


Investment< INR 50 crore

and


• 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


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

a "Startup“.© 2020. This document is for your company’s internal use only and may not be distributed to any other third party. // 5

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


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



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.



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.



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.

© 2020. This document is for your company’s internal use only and may not be distributed to any other third party. // 1 0

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.


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.


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


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


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.


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.


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


Why Outsourcing?

Our Services

Business Setup

Accounting

Legal and Secretarial Taxation

Transaction Support

One Stop Solution

360° approach for all needs


Why Us?

Technology We Use

// 1 9

MGB is Authorized Partner

© 2020. This document is for your company’s internal use only and may not be distributed to any other third party.

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


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


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.).


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.


/ / Market Leaders


Key Clients

/ / Market Leaders


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

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BENEFITS TO STARTUPS / MSMES AMIDST COVID-19 · & Services Investment < INR 1 crore and Turnover < INR 5 crore Investment < INR 10 crore and Turnover < INR 50 crore Investment< INR