Micro, Small and Medium Enterprises (MSMEs) are the backbone of the Indian economy, contributing significantly to its growth and development. In order to support and promote the growth of MSMEs, the government of India has introduced various schemes and incentives, one of which is the MSME registration.
What is MSME classification?
Initially, when the government introduced the MSME registration in 2006, the MSME classification was based on the investment criteria in plant and machinery or equipment. The government revised the MSME classification by inserting annual investment and annual criteria. Also, the distinction between the manufacturing and the services sectors under the MSME definition was removed.
The following is the current revised MSME classification, where the investment and annual turnover are to be considered for deciding if an entity is considered as an MSME:
|Revised MSME Classification|
|Investment & Annual Turnover||< Rs.1 crore & < Rs.5 crore||< Rs.10 crore & < Rs.50 crore||< Rs.50 crore & < Rs.250 crore|
Documents Required for MSME Registration
The MSME registration documents are as follows:
- Aadhaar card
- PAN card
There are no MSME registration fees and it does not require proof of documents. PAN and GST-linked details on investment and turnover of enterprises will be taken automatically by the Udyam Registration Portal from the Government databases since the portal is integrated with Income Tax and GSTIN systems.
GST registration is not compulsory for enterprises that do not require a GST registration. However, enterprises that mandatorily need to obtain GST registration under the GST law, must enter their GSTIN for obtaining the MSME Registration.
MSME registration is a process through which small and medium-sized businesses can register themselves with the government of India and become eligible for various benefits such as subsidies, loans, tax benefits, and more. In this article, we will discuss the procedure and documents required for MSME registration in India.
Procedure for MSME Registration in India:
The process of MSME registration is simple and can be completed online by following these steps:
Step 1: Visit the official website of the Ministry of MSMEs, i.e., https://udyogaadhaar.gov.in/UA/UAM_Registration.aspx.
Step 2: Fill in the required details such as name, Aadhaar number, PAN number, email address, and mobile number.
Step 3: Enter the details of the enterprise, such as the name of the enterprise, its address, date of commencement, and other relevant information.
Step 4: Enter the details of the bank account of the enterprise, including the bank account number, IFSC code, and bank name.
Step 5: Choose the type of enterprise, i.e., micro, small, or medium, based on the investment made in the enterprise.
Step 6: Enter the number of employees working in the enterprise.
Step 7: Upload the relevant documents such as PAN card, Aadhaar card, bank statement, and other documents as required.
Step 8: Submit the application and wait for the registration certificate to be issued.
Documents Required for MSME Registration in India:
The following documents are required for MSME registration in India:
- Aadhaar card: This document serves as proof of identity and is mandatory for MSME registration.
- PAN card: This document serves as proof of income tax registration and is also mandatory for MSME registration.
- Business address proof: Any of the following documents can be submitted as proof of business address – rent agreement, property tax receipt, electricity bill, or water bill.
- Bank statement: The bank statement of the enterprise’s account is required for MSME registration.
- Partnership deed or Memorandum of Association (MOA) and Articles of Association (AOA): These documents are required for partnership firms and companies respectively.
- Other documents: Any other relevant documents as required by the government or the registering authority may also be required.
Benefits of MSME Registration
Below listed are the MSME registration benefits:
- Due to MSME Registration India, bank loans become cheaper as the interest rate is very low, around 1-1.5%, much lower than interest on regular loans
- It also allowed credit for minimum alternate tax (MAT) to be carried forward for up to 15 years instead of 10 years
- Once registered the cost of getting a patent done, or the cost of setting up the industry reduces as many rebates and concessions are available
- MSME registration helps to acquire government tenders easily as Udyam Registration Portal is integrated with Government e-Marketplace and various other State Government portals which give easy access to their marketplace and e-tenders
- There is a One Time Settlement Fee for non-paid amounts of MSME
- The MSME registration will help the MSMEs in availing the benefits of government schemes such as the Credit Guarantee Scheme, Credit Linked Capital Subsidy Scheme, Public Procurement Policy, Protection against delayed payments, etc.
- MSMEs are eligible for priority sector lending from banks
- MSMEs get the benefit of a government security deposit waiver that is helpful while participating in e-tenders
- Any number of activities, including service or manufacturing or both, may be added or specified in one MSME registration
- Barcode registration subsidy
- Exemption scheme from direct taxes
- ISO certification fees reimbursement
- Electricity bills concession
- Special consideration in International trade fairs
Who can Apply for Udyam Registration?
All manufacturing, service industries, wholesale, and retail trade that fulfil the revised MSME classification criteria of annual turnover and investment can apply for MSME registration. Thus, the MSME registration eligibility depends on an entity’s annual turnover and investment. The following entities are eligible for MSME registration:
- Individuals, startups, business owners, and entrepreneurs
- Private and public limited companies
- Sole proprietorship
- Partnership firm
- Limited Liability Partnerships (LLPs)
- Self Help Groups (SHGs)
- Co-operative societies
Step 1: Filing GST Registration Form
Our experts will submit the GST registration form on the GST portal. They will forward you the ARN Number generated for future reference. You will receive the GSTIN in 3-5 working days, subject to government approval.
Step 2: Filing MSME Registration
Our experts will file for MSME registration as soon as GSTIN is received. You will receive the MSME Registration Certificate for your entity in 2-5 working days.
Frequently Asked Questions
What is an MSME Registration Certificate?
The Ministry of MSME issues an e-certificate known as the Udyam registration certificate to MSMEs in India. The Udyam registration certificate is known as the MSME registration certificate. The entrepreneurs receive the MSME registration certificate upon completion of the MSME registration process.
Can I get MSME registration for a partnership firm?
Yes. A partnership firm that fulfils the MSME classification’s investment and turnover criteria can apply for MSME registration.
How to check MSME registration by name?
You cannot check the MSME registration number by name. However, you can retrieve your MSME registration number by following the below process:
- Visit the Udyam Registration Portal.
- Click on the ‘Forgot UAM/Udyam Registration Number’ button on the homepage.
- Choose the registration option.
- Choose the OTP option
- Enter the mobile/email address
- Click on the “Validate & Generate OTP” button.
- Enter the OTP. The MSME registration number will be displayed.
Is it mandatory to have an Aadhar card for obtaining Udyam registration?
Yes. For obtaining Udyam registration, an Aadhaar card is compulsory. In case an applicant is other than the proprietor, the Aadhaar card of the partner and the director will be required.
What is the validity of the MSME Registration Certificate/Udyam Registration certificate?
There is no expiry of the Udyam/MSME Registration Certificate. As long as the entity is ethical and financially healthy, there will be no expiry of the certificate.
Who is eligible for MSME registration?
All entities classified as Micro, Small and Medium enterprises as per the MSME classification are eligible to apply for MSME registration. An individual cannot apply for MSME registration. A proprietorship, partnership firm, company, trust or society with an investment below Rs.50 crore and annual turnover below Rs.250 crore are eligible for MSME registration.
How much time it takes for MSME registration completion?
The MSME registration is completed as soon as the Udyam/MSME registration form is filled and submitted on the Udyam Registration Portal. After submission of the form, a message will be displayed on the screen about the completion of the MSME registration. MSME registration check can be done on the Udyam Registration Portal.
Is MSME registration for traders valid?
Yes. Earlier, the MSME registration covered only manufacturing and service industries. However, in July 2021, the government announced that the wholesale and retail trade would come under the MSME classification. Thus, traders can apply for MSME registration for their wholesale/retail trade business except for motor vehicles and motorcycles.
Is MSME registration and Udyog Aadhaar same?
No. Udyog Aadhaar registration is an initiative of the government to provide a 12-digit registration number for SMEs. The MSME registration replaced the Udyog Aadhaar registration; thus, all MSMEs need to obtain the MSME registration to obtain government benefits for MSMEs.
How many days it takes for MSME Registration Certificate?
After completing the MSME registration, it usually takes 3-5 days to get the MSME Registration Certificate. The MSME Registration Certificate is sent to the mail of the entrepreneur.
Is the MSME registration online free?
Yes. There is no cost for MSME registration on the Udyam Registration Portal, and it is free of cost.
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MSME registration in India is a simple process that can be completed online by submitting the required documents and filling in the necessary details. The registration is beneficial for small and medium-sized enterprises as it makes them eligible for various incentives and schemes offered by the government of India. We hope this article has provided you with useful information about the MSME registration process in India.