THE ROLE OF LAWYERS IN THE DEVELOPENT OF MSME & SME

Small businesses face both financial and time constraints when it comes to complying with a slew of regulations, such as obtaining and maintaining a plethora of licences, registrations, approvals, and reporting requirements. Due to a lack of proper knowledge, businesses are frequently fined and penalized, diverting managements time and resources to resolve these disputes. Intellectual property (IP) arising from indigenous innovations/inventions has long been a grey area for SMEs and MSMEs.

THE ROLE OF LAWYERS IN THE DEVELOPENT OF MSME & SME

INTRODUCTION


Micro, Small, and Medium Enterprises (MSMEs) are the engines of the Indian economy, owing
to the sheer size of the country's small businesses. According to the MSME ministry, the number
of MSMEs in India could be around 6.3 crores as of November 26, 2021.


WHAT TYPES OF PROBLEMS THE MSMES SECTORS ARE FACING?


Small businesses face both financial and time constraints when it comes to complying with a
slew of regulations, such as obtaining and maintaining a plethora of licences, registrations,
approvals, and reporting requirements. Due to a lack of proper knowledge, businesses are
frequently fined and penalized, diverting management's time and resources to resolve these
disputes. Intellectual property (IP) arising from indigenous innovations/inventions has long been
a grey area for SMEs and MSMEs.


The most concerning aspects for MSMEs are legal recourse and technology. Due to the nature
and scale of their business, these MSMEs typically lack optimal technology exposure and legal
assistance, resulting in their inability to compete effectively with the big market players.


HOW CAN LAWYERS HELP MSMES AND SMES?


Lawyers should go above and beyond to assist MSMEs not only in their area of expertise, but
also in areas such as technical and operational challenges. These businesses face the urgency and
complexity of reopening, and lawyers can assist them in transforming enormous challenges into
meaningful change. MSMEs can freely drive their businesses with the assistance of lawyers,
which can assist business owners in navigating the challenges they were facing in the operation.
Lawyers can advise them on how to follow the standard procedures required by law and ensure
compliance with the government. Lawyers should also assist MSMEs in overcoming obstacles to
business restoration.


A lawyers advice and support will assist MSMEs or SMEs entrepreneurs in making critical
decisions that will affect the lives of millions of people and shape society for the future. As the
support system for business and enterprise, lawyers have the power and potential to create a
mechanism that may help businesses and enterprises to make conceivable growth and move
forward.


The areas where lawyers can help MSMEs and SMEs:


1. Registrations 
Lawyers can assist entrepreneurs/business establishments in registering under the
MSMED Act of 2006, as well as advise them on MSME investment, benefits, and
compliance issues. The MSME registration on the Udyam portal is free. They should
notify the entrepreneurs/business establishments of the situation. When the online MSME registration form is successfully submitted to the portal, a registration reference number is generated. The Ministry of MSME will send the Udyam Registration Certificate or MSME Certificate to the entrepreneur's registered email address if the registration form submitted on the portal is verified.


2. Update/modification 


When a company receives an Udyam Registration Certificate, they can then update or
modify their data if they discover an error or if circumstances change, necessitating the
need to update or modify the data. In this case, lawyers may be able to assist them by
providing appropriate advice that aids in the updating and modification of data on the
portal.


3. Advisory 


Advisory is a lawyers core expertise that stems from experience, knowledge, mental
application, and a situation-handling mindset. A good advisor can help a company reach
new heights.


4. Drafting of contracts 


Drafting is the art of expressing ones ideas in written form. It is a tool for outlining the
legal obligations of the two parties by writing out the terms and details of the contract. To
avoid future conflict, a lawyer can draught a simple, effective, and understandable
contract/agreement that defines the respective duties of the parties.


5. To help in IPR (Intellectual Property Rights) 


Lawyers help them register their intellectual property, such as trademarks and patents.
After they have been registered as professionals, lawyers can inform them that they are
entitled to a 50% subsidy for patent registration. Furthermore, lawyers can assist them in
obtaining remedies for IPR infringements and in determining how to file a suit in a court
of law to obtain remedies.


6. Tax and finances


As a lawyer, we can also assist with taxation and finance issues. As professionals, we
play an important and critical role in smoothing business operations,
investment/fundraising, which is always required to run and expand the business.
Lawyers must ensure that critical expenses are met and that the organization maintains a
manageable level of financial profitability. We can assist them in locating promoters and
venture capitalists willing to invest in their venture.


COMPLIANCE UNDER THE LAWS 


MSMEs and SMEs are initially registered under various laws such as the Companies Act of
2013, the LLP Act of 2008, and the Partnership Act of 1932. Lawyers decipher the complexities
of laws and complete all compliances in a timely manner to avoid penal provisions/litigation for
businesses.

WRITTEN BY-ANKUSH