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MSME Registration

  • MSME stands for Micro, Small, and Medium Enterprise.
  • MSME industries are also known as SSI's or small scale industries.
  • The Medium Small and Medium Enterprise Development Act(MSMED) was enacted by the Government in 2006 to promote, facilitate, and develop small businesses' competitiveness.
  • According to msme.gov.in, the MSME sector contributes 45 percent of India's total industrial jobs, 50 percent of India's total exports, and 95 percent of all the country's industrial units, with 6,000 product forms being produced in these sectors.

MSME Registration

  • Enterprises falling under the MSME (Micro, Small, and Medium Enterprises) segment shall register under the MSMED (Micro, Small, and Medium Enterprises Growth Act, 2006).
  • The manufacturing or service line industry can obtain MSME registration.
  • MSME registration is not required by law, but such companies need to reap from benefits such as excise duty exemptions, energy tariff subsidies, lower interest rates, income subsidies, capital expenditure subsidies, to name a few.

Criteria for MSME Registration

MSME Registration is based on the  composite criteria of Investment in Equipment/ Plant & machinery  and Annual turnover

MSME REGISTRATION

Composite Criteria: Investment and Annual Turnover

Classification

Micro

Small

Medium

Manufacturing & Services

Investment < Rs 1 cr

And

Turnover < Rs 5 cr

Investment < Rs 10 cr

And

Turnover < Rs 50 cr

Investment < Rs 20 cr

And

Turnover < Rs 100 cr

Documents Required for MSME Registration

 The following documents are required for MSME registration:

 

1. BUSINESS ADDRESS PROOF:

 

If the premise is self –owned.

 

If the premise is rented

 

Submit Allotment letter, possession letter, lease deed, or receipt of property tax for MSME registration

Rent receipt and no-objection certificate from the landlord is required for MSME registration

If there is a municipal license on behalf of a company or on behalf of a business owner, partner, or agent, no other certificate of ownership is required.

Any utility bill or record that shows ownership of the landlord shall be submitted.

 

 2.COPIES OF SALES BILL AND PURCHASE BILL:  

For MSME registration, Business is required to submit a copy of the sales bill related to each end product that it will supply. Also, for each raw material that it will purchase, a purchase bill has to be submitted.

 

3. PARTNERSHIP DEED/ MOA & AOA:

 

If the business is a Partnership firm

 

If the business is a Company

 

Submit the Partnership deed

Copy of Memorandum of Association(MOA), Article of Association( AOA) and Certificate of Incorporation( COI) is to be submitted

When the partnership firm is approved, it must also give registration certificates.

Copy of resolution passed in general meeting. A copy of the board resolution shall be sent authorizing a director to sign the MSME submission.

 

4. COPY OF Acquired LICENSES AND BILLS OF MACHINERY

The applicant must, in a few cases, submit a copy of an industrial license to be obtained by submitting a request to Govt. of India. Furthermore, all bills and receipts relating to the procurement and installation of the plant and equipment must be kept secure and must be submitted on request.

 

 

 

MSME Registration Process

Businesses who want to register as MSME will need to register their business on the “Udyog Aadhar Memorandum (UAM) portal.” The registration process is free for every user.

MSME Registration can be done offline as well as online.

Following are the steps for online MSME registration:

Step 1. Visit UAM portal  and keep your Aadhar card handy (Mandatory). click here

Step 2. Enter your 12 digit Aadhar number and name of the entrepreneur

In the case of a proprietorship company, the Aadhaar number shall be of the proprietor’s, in the case of a partnership firm, the managing partner, and a Hindu Undivided Family (HUF), a Karta.

In the case of a Company or a Limited Liability Partnership or a Cooperative Society or a Society or a Trust, the organization or its authorized signatory shall provide its GSTIN and PAN and its Aadhaar number.

Step 3. Then, click on ‘’Validate & Generate OTP’ and enter the OTP for verification. You’ll need to fill out the online registration form until verification is completed.

 

Step 4. Fill the following details:

  • Name of the business owner
  • Category of the applicant – General, SC, ST, OBC, Others 
  • PAN details
  • Complete postal address of the business– district, pin-code, state, email address and  mobile number 
  • Previous registration details of your business
  • The commencement date of business
  • Bank Account Details, along with the IFSC code 
  • Type of Organisation – “Services” or “Manufacturing” 
  • Total number of workers employed 
  • The total amount of money (in lakhs) invested in business/enterprise
  • Annual turnover of the business
  • National Industrial Classification (NIC) Code 
  • Details of District Industries Centre (DIC)

Step 5. Then, click on submit to generate OTP, which will be sent to the email id mentioned in the form for registration.

 

Step 6. Enter Aadhaar OTP received on mobile for the second time and click on ‘Final Submit.’

Step 7. You will receive an acknowledgment number via email once the registration is complete

 

Step 8. Once your details are verified, the UAM number is generated for your business. You can use this MSME Registration number for the various benefit of MSME’s.

Benefits of MSME Registration

MSME Registration is not mandatory.  If you want to register, your company will enjoy a scheme of excise exemption from direct taxes, take advantage of special programs created for MSMEs by banks, and many more.

 

Registered companies with an MSME certificate would also benefit from various government departments, including electricity.

 

The list below are some of the benefits of MSME Registration to companies:

  • Lowest interest rates on bank loans 
  • Avail tax rebates customized for MSMEs credit for Alternate Minimum Tax (MAT): MAT credit allowed to be carried forward for 15 years instead of 10 years
  • Very easily accessible credit for MSMEs 
  • Reimbursement of ISO Certification 
  • Avail special rebates and concessions on patents and industry set-ups 
  • One time settlement fee for the amount unpaid 
  • Government preference to MSME’s 
  • Concession in electricity bills 
  • Get credit guarantee schemes from the Government.
  • Special consideration on International Trade fairs
  • Bar code registration subsidy 
  • Support from your state government

Schemes Launched by the Government for MSME

Some of the schemes are as follows: 

 

  • Udyog Aadhaar memorandum scheme – Through this program, MSMEs can get loans for MSMEs, credit, and government subsidies quickly available.

 

  • Women entrepreneurship – The scheme was launched to support and inspire women who wanted to start their own company or build something. The Government provides financial aid, counseling, and training to women over here to help them run their company better.

 

  • Zero defect zero effect – The Government here ensures that products produced by MSMEs adhere to a certain quality and are not returned to India. The program is also known as the ZED, helps small and medium-sized businesses receive rebates and discounts for their exported goods.

 

  • Quality control practices and quality development tools – This scheme aims to draw awareness of quality in the products made by MSMEs. It encourages healthy competition among various establishments to ensure better commodity production.

 

  • Grievance management program – This scheme was launched to track and provide for complaints and feedback from the company and MSME owners.

 

  • Credit linked capital subsidy scheme – Registered microfinance companies may use funds to replace their old equipment and update their business with new technologies. MSMEs should contact banks directly to benefit from this scheme.

 

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Frequently Asked Questions (FAQ's)

  • What is the validity period of the MSME Registration certificate?
  • The Provisional Registration Certificate (PRC) will be valid for a fixed period of 5 years from the date of issue of PRC. In other words, the PRC will automatically lapse at the end of 5 years from the date of issue of the certificate or the age of commencement of production by the unit, whichever is earlier.
  • Is Aadhar card compulsory for MSME registration?
  • Yes, Aadhar card is mandatory for registration under the Udyog Aadhar scheme. When an applicant is other than the proprietor, it would include the partner's Aadhar card and the owner
  • Who can apply for MSME registration?
  • Any type of business entity can obtain micro, Small & Medium Enterprises (MSME) Registration or Udyog Aadhaar registration:
    1. Proprietorships
    2. Partnership Firm
    3. Private Limited Company
    4. Public Limited Company,
    5. Limited Liability Partnership,
    6. Hindu Undivided Family,
    7. Self Help Groups
    8. Society / Co-Operative Society
    9. Trust
  • Is MSME Registration replaced with Udyog Aadhar Registration?
  • Yes, MSME Registrations are substituted for the Udyog Aadhar Registration. All micro, small and medium businesses are expected to register with MSME or Udyog Aadhar if they want to start some company. The authentication can be conducted offline and online in two forms through MSME or Udyog Aadhar. The registration program offers many discounts and incentives to the company in two forms.
  • Can both existing and new companies apply for MSME registration in India?
  • Yes, an established and new company in India both will apply for MSME registration or Udyog Aadhar Registration. The new unit has to be in working order. It meets MSME or Udyog Aadhar Registration requirements.
  • Whether the trading companies are eligible for MSME Registration?
  • No in India, the MSMEs just covers manufacturing and service industries. The MSME scheme does not cover the trading companies. MSME was launched with incentives and discounts to support entrepreneurs. Trading firms are more like intermediaries and is a link between a supplier and a client. The scheme does not bound the trade firms themselves.
  • How to check MSME Registration?
  • After you have enrolled your business under UDYAM by following the above procedure, you will obtain a UAM No. that is specific for your organization. Check the status of MSME registration by searching from the https:/udyamregistration.gov.in/ Udyam page
  • Does existing MSME need to re-apply for Udyam Registration?
  • All existing companies registered under EM – Part-II or UAM must again register on or after the 1st day of July 2020 on the Government's Udyam Registration page. All those enrolled before June 30, 2020, will be re-classified as per the Government's new notification. The current licensed MSMEs shall remain effective until June 30, 2020, for up to March 31, 2021.