The MSME stands for Micro, Small and Medium Enterprises and is the main Government body that deals with the management & preparation of guidelines, rules, and laws regarding small scale industries in India. On October 02, 2006, the MSME (Micro, Small and Medium Enterprises) became operational and it was introduced to facilitate, develop & promote the competitiveness of the MSME. The MSMEs are considered vital for the Indian Economy as this sector plays a vital role in the industrialisation of the Rural & Backward areas. MSME Registration is attained as per the MSMED Act, 2006 and obtaining MSME Registration in India is not mandatory, but it shall be taken into consideration that the entities or businesses with MSME Registration are eligible to avail of various schemes and benefits made by the Government.
Definition of MSME
The gap between the manufacturing and service sectors was erased, the investment limits were changed, and a turnover condition was added in May 2020, when the Indian Finance Minister, Mrs. Nirmala Sitharaman, submitted a new revision to the definition of MSME.
As per the revised definition of MSME, MSME includes any class or classes of enterprises, whether proprietorship, Hindu Undivided Family (HUF), the association of persons, partnership firm, co-operative society, company/undertaking, by whatever name is called.
What are the Benefits of MSME Registration in India?
Following are some benefits of MSME Registration in India:
- Any company that holds an MSME Registration can obtain loans from banks at a comparatively cheaper rate, approximately 1- 1.5 %. This is much lower than the normal bank rates;
- Various Tax Rebates and Exemptions are provided to MSMEs;
- MSMEs are permitted to carry forward the credit for MAT (Minimum Alternate Tax) up to a period of 15 years, which in the general case is ten years;
- There are various tenders available only for the industries having registration under MSME Act;
- MSME receives easy credit facility from various Financial Entities;
- Industries having registration in MSME Act are given higher preference in comparison to normal industries;
- Companies or the industries holding an MSME Certificate have better growth opportunities as they get direct entry into major national and international trade fairs and also have better occasions to present themselves to the world;
- MSMEs are qualified to obtain Collateral free loans as banks do not accept any collateral security for the loan amount up to Rs 10 Lakhs;
- Industries having registration under MSME are qualified to get reimbursement of ISO Certification
Who can apply for MSME Registration in India?
Following is the list of eligible applicants who can apply for MSME Registration in India:
- Hindu Undivided Family (HUF);
- Limited Company;
- Proprietorships;
- LLP or Limited Liability Partnership;
- One Person Company (OPC);
- Any association of persons’
- Partnership Firm;
- Co-operative Societies or any other undertaking can get MSME Registration in India.
Documents Required for MSME Registration in India
For MSME Registration, the only required documents are a PAN card and an Aadhaar card. There is no need for paper proof because registration is done totally online. The online Udhayam Registration Portal, which is fully integrated with the Income Tax & GST IN System, would automatically obtain PAN & GST associated details on investment & turnover of firms from the Government databases.
Following are some important details to be mentioned in the Application form:
- Aadhar Number;
- Name of the entrepreneur as per Aadhar Card;
- Organization type such as Private or Public Limited Company, LLP, Proprietorship, HUF, Co-operative Society, Partnership Firm, Society or Trust;
- PAN Card;
- Gender;
- Office address of the enterprise;
- Account number and IFSC Code of the bank;
- Number of employees;
- Investment amount in plant & machinery (in case there is no investment in plant & machinery, entrepreneurs can write it as zero);
- Turnover;
- Location of unit or plant;
- Social categories such as OBC, General, SC or ST;
- Enterprise name;
- Commencement date of business or incorporation of enterprise registration;
- NIC Code of the primary activity;
- Business activity of an enterprise
Procedure for MSME Registration
Through Udyam Registration, a government-based site integrated with the GSTIN and Income Tax systems, the applicant can register for MSME Registration. Businesses outside the scope of the GST Law are not required to register for GST. However, in order to receive Udyam Registration, businesses that are subject to the GST Regime must first obtain GST Registration.
- The MSME Registration can be attained by applying on the Udyam website and the portal shall charge no fees for rendering such a registration;
- After that, a confirmation message will appear on your screen enclosing the reference number of the application;
- AFTER COMPLETING THE VERIFICATION FORMALITIES, the MSME, the Ministry shall grant the MSME Certificate or Udyam Registration Certificate to the applicant’s email id. The MSME shall grant the MSME Registration after 2-3 days from the date of application submission;
- The certificate remains valid for a lifetime and seeks no renewal;
- The applicant can download the certificate from the account created on the website of the Udhyam Registration
Validity of MSME Registration Certificate
MSME Certificate is valid as long as the business is in operation and is issued for a lifetime as long as the classification criteria are met.
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