MSMEs are the growth accelerators of the Indian economy and considered as an engine of economic growth and for promoting equitable development”. Here are the detailed guidelines for registration as MSME
According to the Micro, Small & Medium Enterprises Development Act, 2006, MSMEs can be recognized under the manufacturing sectors if:
- The investment doesn’t exceed INR 25,00,000 in the case of Micro Enterprises.
- The investment exceeds INR 25,00,000 but doesn’t exceed INR 5,00,00,000 in the case of Small Enterprises.
- The investment exceeds INR 5,00,00,000 but doesn’t exceed INR 10,00,00,000 in the case of Medium Enterprises.
MSME can be recognized for the service sectors if:
- The investment doesn’t exceed INR 10,00,000 in the case of Micro Enterprises.
- The investment exceeds INR 10,00,000 but doesn’t exceed INR 2,00,00,000 in the case of Small Enterprises.
- The investment exceeds INR 2,00,00,000 but doesn’t exceed INR 5,00,00,000 in the case of Medium Enterprises.
The Government of India has recently changed the MSME definition and annual turnover has been added as an additional parameter alongside the investment parameter. As per the new definition, MSME can be recognized if:
- The investment doesn’t exceed INR 1,00,00,000, and the annual turnover doesn’t exceed INR 5,00,00,000 in the case of Micro Enterprises.
- The investment doesn’t exceed INR 10,00,00,000, and the annual turnover doesn’t exceed INR 50,00,00,000 in the case of Micro Enterprises.
- The investment doesn’t exceed INR 20,00,00,000, and the annual turnover doesn’t exceed INR 1,00,00,00,000 in the case of Micro Enterprises.
MSME online registration process For new businessmen who aren’t already registered as MSME/ those with EM-II
There are several benefits available to MSMEs. But to avail of these benefits, you will have to register your business on the UAM (Udyog Aadhaar Memorandum) portal.
Now the question that comes to your mind is “how to apply for MSME registration online”. The steps to be followed for MSME registration are:
- Visit the govt portal (UAM portal) to fill the form
- If you are a new businessman and not registered as MSME yet, click on the 1st link, i.e. “For New businessmen who aren’t already registered as MSME/ those with EM-II”, on the page. You can simply click here to open the form.
- Submit Aadhaar number & name & click on ‘Validate & Generate OTP’.
- After the verification is complete, submit the PAN details & type of organization. If PAN is not available, select the ‘No’ option.
- Now, enter the details in the field numbers 5 to 24 of the form.
- Now, enter the OTP received on your phone number and enter the verification code to file the form successfully.
- A “Thank You” message will emerge with the registration number after a successful registration.
- After successfully submitting of the application form, the approval & registration will be accomplished within 2-3 days.
- When the application is approved, your MSME registration will be accomplished & you will get the certificate via email.
Registration for Businessman Already Having Udyog Aadhaar Memorandum
- Visit the govt portal (UAM portal) to fill out the form.
- Click on the tab “For those who are already registered as UAM by Assisted filing” / “For those who are registered as UAM.”
- On the next page, enter the Udyog Aadhaar number, select the OTP option & then click on ‘Validate & Generate OTP’
- Enter the OTP received on the mobile number or email ID registered with UAM.
- Enter the registration details in the MSME registration form & submit the form.
- After successfully submitting the registration form, the registration & approval will be accomplished within a few days.
- When the application is approved, you will get the MSME certificate via email.
Requirement of Documents for MSME Registration
The requirement of documents for MSME registration is:
- PAN Number
- Aadhar Number
- Address of Business
- The basic business activity
- Bank Account Number
- NIC 2-digit code
- Turnover details (according to MSME new definition)
- Investment details (details of plants/equipment)
- Copies of Purchase bills & Sales bills
- Partnership Deed
- License Copies & Purchase bills of Machinery
Registration Fees of MSME
Applicants can obtain MSME registration by using Udyam Portal only. The MSME registration requires no fees to be paid. The registration process is free of cost.
Registration Certificate of MSME
After successful MSME registration on the Udyam portal, you will receive a message having a reference number. The Ministry of MSME will issue the MSME registration certificate to your email id after the registration application on the Udyam portal is verified. This MSME registration certificate will be valid for the lifetime, without any requirement of renewal.
You will get the MSME registration Certificate from the Ministry of MSME within a few days of application for the registration. You can visit the Udyam portal for downloading the MSME certificate. The steps to be followed for downloading the MSME certificate are:
- On the Udyam Registration portal, select the ‘Verify/Print’ tab & select the ‘Print Udyam Certificate’ option.
- On the coming page, enter your mobile number & Udyam Registration Number. You have to select the option of OTP & then select the ‘Validate & Generate OTP’ tab
- Now enter the OTP received in the email ID or mobile number & select the ‘Validate OTP & Print’ button.
On the next page, the MSME Certificate will appear. You can print it.
MSME Registration Benefits
There are several benefits of MSME registration such as:
- You will get bank loans at the lowest rate of interest. The rate of interest is approx 1%-1.5% lower compared to the regular interest rate on loans.
- You can also avail of the tax benefits by taking credit for MAT (minimum alternate tax) that can be availed for up to 15 years.
- There are many concessions & rebates available on setting up the industry or getting patents done.
- You can reimburse the ISO Certification fees
- Credits are easily assessable for MSMEs
- A one-time settlement fee is required to be paid for the unpaid amount of small and medium business. This can be paid using PayU India.
- Acquire Govt tenders easily because Government gives preference to small and medium business
- You can avail the advantages of several Govt schemes like Credit Linked Capital Subsidy Scheme, Credit Guarantee Scheme, Protection against delayed payments, Public Procurement Policy, etc
- Priority sector lending from banks are available to MSMEs
- Bar-code registration subsidy
- Concession on MSME electricity bill
- Special consideration for International Trade fairs
- State Government also supports MSMEs
MSMEs are viewed as the backbone of the economy in developing countries like India. This sector is complementary to the large industries as an ancillary unit, and MSMEs contribute enormously to the country’s socio-economic development. This sector plays an important role in providing employment facilities at a large scale and lower cost in comparison to the large industries helps in the industrialization of rural & backward areas & reduces regional imbalances, ensuring a more equitable distribution of wealth & national income. The MSME registration is not yet mandatory, but the registration provides several benefits to the MSMEs in terms of credit facilities, loans, taxation, setting up the business, etc., as discussed earlier in this article.