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MSME/Startups

The Beginner’s guide to fundraising: How can founders choose?

We present to you the combined video of our 3 part series- The Beginner’s Guide to Fundraising (How can founders choose?)

This interesting Q&A with Rohini Nair, Partner & Founding Member, ANB Legal- India, alongside our host Lavanya Behl Founder & CGO, LawWiser will help you understand and learn about-

– Different options available when it comes to fundraising and critical compliances to be ensured

– Equity & Debt with their pros and cons, parameters to evaluate and the founder’s concern

– Personal liability of founders, provisions founders should be careful of while evaluating the contracts.

Watch Now to learn more!

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MEITY issues Draft Amendment to IT Rules, 2021

The Ministry of Electronics and Information Technology (MEITY) has issued a draft amendment to the Information Technology (IT) rules, 2021. 

The MEITY has said that the amendment is aimed at curbing the spread of fake news and misinformation. 

Tune into #LawWiser premium on “MEITY issues Draft Amendment to IT Rules, 2021”  by Prabhjot Singh sharing the amendments in a precise way.

He says that the main focus of these amendments has been on the intermediaries stating that they may additionally create their community standards as per their business policies and to respect the principles of the Constitution of India.

Some of the principles have been implied as allowing the Indian constitution, laws, and rules in letter and spirit and removing illegal and damaging information that violates their terms and conditions.

When people report something, it should be deleted swiftly, and the users should be given a way to complain.

To see more such interesting videos, subscribe to #LawWiser Premium.

#startup #startupbusiness #msmeindia #msmesector #msmeregistration #msme #informationtechnology #intermediaries #policies #amendments #businesslaw 

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MSME Sustainable (ZED) Certification Scheme – Part 2

Welcome to the second part of the video on- MSME Sustainable (ZED) Certification scheme
If you haven’t watched the first part you can access it in the description box below.
In the second part watch – Subsidy on the cost of certification, certification process, surveillance and renewal process after expiration.
Any number of units that are registered under UDYAM registration can apply for subsidy under this scheme. All these individual units under one UDYAM registration have to apply separately for the
certification to avail benefits and incentives associated with it.
All the MSMEs will get financial assistance and subsidy mile for obtaining a ZED certification Level.
The subsidy on the cost of certification will be given in the form of the following structure –
If you are a micro-enterprises – 80%, small enterprises- 60% and medium enterprises- 50%.

You can also get some additional subsidies-

  • 10% subsidy if your MSME is owned by women/sc/st entrepreneurs or the MSME is situated in NER/ Himalayan/LWE/Island territories/ aspirational districts.
  • You will get an additional 5% subsidy if your MSME is part of ministries SFURTi or Micro; Small and Medium Enterprises- Cluster Development Programme of the ministry.

You will also learn about the certification process, gap analysis, handholding and surveillance.
If you have any queries please let us know in the comment box below and do visit our website Lawwiser.

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Limited Liability Partnership (Second Amendment) Rules 2022

The Ministry of Corporate Affairs (MCA) notified the Limited Liability Partnership (Second Amendment) Rules, 2022 (LLP Rules).
As per the current reports, the amendments are divided into few segments which are listed below:-

  1. Allotment of the new name to existing LLP
  2. Increase in Allotment of Number of DPINs at the time of incorporation
  3. Allotment of PAN and TAN with the Certificate of Incorporation
  4. Relaxation in requirement of mentioning the name of the authority
    Let’s discuss the following amendments:-
  5. Allotment of the new name to existing LLP
    This amendment has been inserted in Rule 19 (1) of LLP rules, 2009 which says that if a proprietor of a company has a registered trademark similar to another company’s trademark that is registered subsequently, he may now apply to the regional director for the purpose of giving him the direction to change its name or establish a new name.
  6. Increase in Allotment of Number of DPINs at the time of incorporation
    This change was made in relation to the allocation of a Designated Partner Identification Number (DPIN) during the incorporation process. The latest amendment now states that for incorporation, five DPINs can be used. As per the earlier provision, an LLP could apply for a maximum of two DPINs at the time of formation.
  7. Allotment of PAN and TAN along with the certificate of incorporation
    This particular amendment says that PAN and TAN will be allotted with the Certificate of Incorporation; the main objective of this amendment is to line up the process of incorporation of LLP as that of a company.
    Previously, there was no such provision that the PAN and TAN were to be linked with the Certificate of Incorporation; there was an entirely separate procedure for PAN and TAN.
  8. Relaxation w.r.t. mentioning the name of the authority
    With this new rule, a specific relaxation has been given to the founders of LLP for changing the name of their LLP. Now they don’t need to attach the authority to which the application is to be given. This amendment will lower the compliance burdens on the LLPs and making the procedure seamless.
  9. Signing of Statement of Accounts & Insolvency of LLPs under Insolvency
    The amended provisions prescribe that Statement of Account and Solvency may be signed on behalf of the LLP by an Interim Resolution Professional or Resolution Professional, or Liquidator or LLP Administrator in case where the Corporate Insolvency Resolution Process (CIRP) has been initiated against the LLP under the IBC, 2016 or the LLP Act, 2008.
    Prior to the amendment, Rule 24 (6) of the LLP Rules, 2009 prescribed that the Statement of Account and Solvency of the LLP to be signed by its designated partners. There were no provisions with regard to the signing of the Statement of Account and Solvency of the LLPs under insolvency.

Key Takeaways
These specific amendments will not only simplify the procedure but will also save a lot of time for the LLP founders aiming for the expansion of their respective businesses.

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A glimpse of draft battery waste management rules 2020

On February 20, 2020, the Ministry of Environment, Forest and Climate Change (MoEFCC) published the draft Battery Waste Management Rules, 2020, which will supersede the Batteries (Management and Handling) Rules, 2001.

Tune into #LawWiser premium video on “Glimpse of Draft Battery Waste Management Rules 2020” where Prabhjot precisely explains the battery waste management rules.

In the video, Prabhjot explains that 

1.No battery or battery pack may be placed on the market unless it is labeled with the “crossed-out wheeled bin symbol” (see below) covering at least 5% of the area of the battery or battery pack’s biggest side.

2. No one may sell a button cell that contains more than 0.0005 per cent mercury by weight unless it is labeled with the chemical symbol “Hg,” a battery that contains more than 0.002 percent mercury by weight unless it is labeled with the chemical symbol “Cd,” or a battery that contains more than 0.004 percent lead by weight unless it is labeled with the chemical symbol Pb.

He also tells us that Extended Producers Obligation is the responsibility of the producer, and each producer must get EPR authorization from the Central Pollution Control Board or the State Pollution Control Board.

#msme #msmeindia #compliance #startup #ministry #environement #epr #batterymanagementsystems #batterystorage #climatechange #climateaction #extendedproducerresponsibility 

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Guidelines for procurement and utilization of battery energy storage system

Recently the Ministry of Power has issued some guidelines for the procurement of utilization of battery energy storage systems (BESS). The Ministry has established procurement and usage rules for battery energy storage systems as part of a slew of renewable-energy generating projects. It also seeks to stabilize power supply, boost total energy, and prolong supply time from a single renewable energy project or a portfolio of renewable energy projects, as well as provide grid support and flexibility services.

The applicability of these guidelines is as follows:-

The guidelines are issued under Section 63 of the Electricity Act, 2003. Through the process of competitive bidding, energy will be procured from BESS, from the grid associated projects. Below are the following minimum projects and the bid capacity requirements.

(i) Minimum individual project size of 1MW and above with adequate energy rating based on the application at one site with minimum bid capacity of 1MW for intra-state projects; and

(ii) For Inter-State Projects: Minimum individual project capacity of 50 MW and above with appropriate energy ratings based on the application at one site with a minimum bid capacity of 50 MW at the minimum voltage level as stated by the current CERC rules and regs Process.

(iii) The BESSD/Procurer/Intermediary Procurer/End Procurer/Implementing Agency and the Authorized Representative of the Procurer are bound by the terms of these Guidelines. Clause A, Section V of these Guidelines outlines the procedure to be followed in the event of any planned variation from these Standards.

(iv) As per one of the guidelines, the earnest must not be more than the 2% of the estimated capital cost of the batter storage project. As an addition, the PBG amount was reduced to 3% for all the renewable projects.

(v) To meet the performance criteria, the BESS developer will be authorized to replenish the  battery capacity from time to time.

(vi)The implementation, evacuation arrangements and the capital costs will be paid by the BESSD or either by the renewable energy park developer or any other agency.

(vii) In any situation, where the procurer does not specify the project site, it will wholly be the responsibility of developer to provide connectivity and the grid access to transmission.

It is to be noted that these guidelines shall be binding on the procurer/intermediary/end procurer and the person who is acting as an official representative of the procurer.

Major Objectives of the Guidelines

• To provide fairness and transparency in the procurement processes by providing the governing framework.

• To establish standardization and regularity in the processes and a risk-sharing framework.

• To increase the energy storage and storage capacity procurement which in turn can level up the competition and bankability.

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Privacy in Healthcare

Watch Sanjana Aravamudhan, Associate consultant at Dua Consulting in this video takes us through the regulatory ecosystem surrounding the protection of patient privacy in tele medicine.

She starts by explaining privacy under the intermediary rules where she also talks about the Intermediary guidelines. 

While talking about exemption she stated- 

As per section 79 of the IT Act, an Intermediary is not liable for any third-party information, data, or communication link made available or hosted by it. This exemption applies only if:

i. the function of the intermediary is limited to providing access to a communication system over which information made available by third parties is transmitted or temporarily stored or hosted;

ii. the intermediary does not – initiate the transmission; select the receiver of the transmission AND select or modify the information contained in the transmission; and

iii. the intermediary observes due diligence while discharging its duties under the IT Act.

She then further explains the role of data privacy & confidentiality – A Registered Medical Practitioner would be required to fully abide by Indian Medical Council (Professional conduct, Etiquette and Ethics) Regulations, 2002 and with the relevant provisions of the IT Act, Data protection and privacy laws or any applicable rules notified from time to time for protecting patient privacy and confidentiality and regarding the handling and transfer of such personal information regarding the patient.

Lastly, she helps you understand about misconduct and privacy in telemedicine consultation.

She also provides some examples of actions that are not permissible which you as an MSME and Intermediary need to be aware of are:

– RMPs insisting on Telemedicine, when the patient is willing to travel to a facility and/or requests an in-person consultation

– RMPs misusing patient images and data, especially private and sensitive in nature (e.g.

– RMP uploads an explicit picture of patient on social media etc)

– RMPs who use telemedicine to prescribe medicines from the specific restricted list

–  RMPs are not permitted to solicit patients for telemedicine through any advertisements or inducements

Watch now to understand more!

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MSME Innovative Scheme

Watch Sanjana Aravamudhan, Associate consultant at Dua Consulting where she talks about the schemes introduced by the government to facilitate innovation for MSMEs.

The objective of this is to bring Indian manufacturing sector and Design expertise/ Design fraternity on to a common platform. It aims to provide expert advice and cost-effective solutions to real-time design problems for new product development, its continuous improvement and value addition in existing/new products. 

The Design scheme will help MSMEs to avail advice on all aspects of design and help you realize and achieve your design-related objectives. This specialist advice will be provided by experienced designers for new product development as well as for enhancing existing product portfolio. This scheme will be an amalgamation of the Incubation, Design and IPR Schemes of the Ministry of MSME.

The Design scheme is divided in two major parts, viz., Design Projects and Design Awareness Programme.

  1. Design Project – To facilitate MSMEs to develop new design strategies and or design related products through interventions and consultancy.
  2. Design Awareness Programme – The objective is to create general awareness and sensitization about the value and power of design for businesses through seminars, talks, workshops etc. The purpose of these activities is to sensitize MSMEs about the usage of design/innovation in various facets of their industry.

She further talked about the eligibility criteria which are –

  • The beneficiary unit(s) must typically be an MSME with a valid UAM or Udyam Registration.
  • The manufacturing MSMEs may be a profitable entity preferably in the last 1 year of its operations though PMAC can relax the criteria.
  • The designer that a unit employs in this scheme should be qualified Industrial designers having relevant experience in that field. 
  • Implementing agencies should verify all the relevant documents.

 She also talks about financial outlays which includes – Design Project which is essentially to facilitate MSMEs to develop new design strategies and or design related products through interventions consultancy. MSMEs may submit their design projects to the nominated IAs. The IAs will carry out due diligence by setting up a suitable Project Assessment Panel (PAP) for evaluating these projects and forward the recommended projects to MSME for approval of PMAC. Funds will be released after the approval of the Design Project by PMAC. 

It also includes Student Design Project – This subcomponent can be availed by all the students of any institution accredited by

AICTE/UGC. The proposed student design project must facilitate student participation into helping MSMEs achieve

Design capabilities. MSME can approach students or Student can offer their services to MSMEs.

Lastly, she will help you understand how to apply for the scheme.

Watch the video to learn more!

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Simplifying PPO for Healthcare MSMEs

PUBLIC PROCUREMENT POLICY FOR MSEs
Let us begin by understanding the public procurement policy that applies to MSEs in general. The Public Procurement Policy for MSEs Order, 2018 has been effective from 1st April 2019.
Under this policy:
– Every Central Ministry /Department / PSUs shall set an annual target for 25% procurement from MSE Sector, of which 4% is from SC/ST entrepreneurs, 3% is from women.
– Tender sets free of cost and exemption from payment of earnest money to registered MSEs.
– When MSEs submit a tender which is upto 15% above an L1 submission by a non-MSE, you still get to supply at least 25% of the tendered value at the L1 price
– 358 items are reserved for exclusive procurement from MSEs.
– Ministry /Department/CPSUs upload their annual procurement plan on their official website.
– Vendor Development Programmes or Buyer Seller Meets for MSEs are conducted to enhance your participation in Govt procurement

PUBLIC PROCUREMENT IN HEALTHCARE
Let us now take a look at healthcare specific public procurement in India. While there is no national level regulation of public procurement in healthcare, certain public procurement orders have been passed by the center to align procurement with the ‘Atma Nirbhar Bharat’ and ‘Make In India’ schemes.

The foremost of these are Public Procurement Orders passed by the DPIIT.

The DPIIT has issued Public Procurement (Preference to Make in India) [PPP-MII] Order 2017 with several further revisions .

The salient features of the aforesaid order are as under:
– The Order is applicable for procurement by Ministries, their departments and includes Government companies as defined in the Companies Act.
– Only ‘Class-I local supplier’, shall be eligible to bid irrespective of purchase value, where there is sufficient local capacity and local competition.
– The margin of purchase preference shall be 20%. ‘Margin of purchase preference’ means the maximum extent to which the price quoted by a local supplier may be above the L1 for the purpose of purchase preference.

Classes of Local Suppliers based on local content are as under:

  • Class-I Local supplier – A supplier or service provider, whose goods, services or works offered for procurement, has local content equal to or more than 50% is a Class I supplier, has local content more than 20% but less than 50% is a Class II supplier, has local content less than or equal to 20% is a non local supplier.
  • Only ‘Class-I local supplier’ and ‘Class-II local supplier’ shall be eligible to bid in procurement of all goods, services or works, and with estimated value of purchases less than Rs. 200 crores.

MEDICAL DEVICES


In 2021, the government notified two PPO orders which will be applicable for procurement by Ministries, their departments and includes Government companies as defined in the Companies Act.

Additionally, these will be applicable to States and local bodies making procurement under all central schemes or where the scheme is fully or partially funded by Government of India.

The current position on procurement is that the if there are no class 1 suppliers, exceptions will be made for permitting class 2 suppliers to bid. Therefore you MSMEs who do not have the production capacities to meet the Class I supplier requirements still have a chance.

As recently as 2nd February 2022, the government has also exempted a further 391 medical devices for which there are no Class I suppliers, thereby widening the net of products that MSMEs with the capacity to manufacture can sell to the government.

PORTALS FOR PUBLIC PROCUREMENT


Here are some of the portals wherein public procurement is done by the government, wherein you can register:
– Government e Marketplace (GeM) . MSMEs, DPIIT recognised startups and other private companies can register on GeM as sellers and sell their products and services directly to government entities.
– Additionally, the GeM Startup Runway is a new initiative to allow startups to reach out to government buyers
– Additionally, each ministry and department within it may release their own tenders for public procurement which are applicable to MSMEs. You also have the option of electronically submitting your bids by enrolling on the central public procurement portal (CPPP) .

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Public Linked Incentives (PLI) for MSMEs

Towards realizing the government’s mission to make domestic manufacturing globally competitive, attract investments, enhance exports, and make India an integral part of the global supply chain, Production Linked Incentive (PLI) Schemes were announced by the Government (GOI). These PLI Schemes accompany the efforts undertaken by the Indian government to fulfil the goals envisaged under the Atmanirbhar Bharat Abhiyaan of May 2020.

SALIENT FEATURES UNDER THE SCHEME
Lets take a look at the basic criteria that you will have to fulfil in order to qualify for
production linked incentives:
– You need to be a company registered in India, proposing to manufacture goods covered under the target segments, such as pharma manufacturing.
– The applicant can operate new or existing manufacturing facility to manufacture goods and manufacturing can be carried out at one or more locations in India.
– The respective ministries/departments screen the applicants based on objective criteria released by each nodal ministry and select beneficiaries from the list of applicants.
– Beneficiaries are eligible for incentive subject to meeting:
o Incremental investment every year which will be calculated as the cumulative investment done in till such year (inclusive the year under consideration) over the cumulative investment till the base year
o Incremental sales for every year which will be calculated as total sale of manufactured goods covered under target segments for the year under consideration over the sales in the base year
– Each Ministry/Department/Nodal Authority may prescribe additional norms or requirements in order to be eligible under their respective PLI Schemes.

SCHEMES UNDERWAY IN HEALTHCARE
There are 2 critical areas of interest –

  1. Critical Key Starting materials/Drug Intermediaries and Active Pharmaceutical
    Ingredients
    a. Nodal Agency – DoP
    b. Incentive Structure:
    i. Fermentation products: FY 2022-26: 20%, FY 2026-27: 15%, FY 2027-
    28: 5%
    ii. Chemically synthesized products: FY 2021-27: 10%

c. Tenure: FY 2020-21 to FY 2029-30. Base year of the scheme is FY 2019-20.
d. Financial Outlay – 6,940 Crore

  1. Manufacturing of Medical Devices
    a. Nodal Agency – DoP
    b. Incentive Structure: Incentive of 5% on incremental sales (over Base Year: FY
    2019-20) of goods manufactured in India
    c. Tenure: Tenure of the scheme is from FY 2020-21 to FY 2027-28
    d. Financial Outlay: 3,420 Crore

APPLICATION PROCESS
The process of application for PLIs involves an application fee, which is examined by the Project Management Agency.

You will receive a Letter of Acknowledgement within 15 working days post completion of examination.

Your application will then be appraised and final recommendations of the PMA and the Technical Committee shall be placed before Empowered Committee (EC) for its approval. This is usually within 60 days from the acknowledgement of receipt of the application. 

An Approval Letter is then issued to you within 5 working days of receiving approval from the Department of Pharmaceuticals (DoP).

The selected applicant shall submit, within two weeks of date of issuance of approval letter by the PMA a bank guarantee in order to be eligible for disbursal of incentives.


CURRENT SCENARIO
Thus far 47 applications have been approved, with a total committed Investment of Rs. 5,366.35 for the bulk manufacture of pharmaceuticals and 14 applications for medical devices manufacturing, valued at Rs.873.93 crores.

Given the financial outlays there are still plenty of incentives to be availed of by MSMEs.

Currently there are no open application rounds available in healthcare, but keep watching this space for updates

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