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All you want to know about MSME registration in India

MSME, stands for Micro, Small, and Medium Enterprises. MSME are governed under Micro, Small and Medium Enterprises Development Act, 2006.

The MSME registration was earlier applicable to only the manufacturing and services industry however Four years after excluding it from the micro, small and medium enterprise segment, the government on 3rd July, 2021 have added Retail and wholesale trading also in the ambit of MSME. The Honorable Minister of MSME Shri. Nitin Gadkari said that this move will benefit 2.5 crores enterprises into the field of trading.

MSME registration provides several benefits to the companies in terms of taxation, credit facilities to scale the business up. Let us dig deeper to find out more about MSME registration in India.

 Definition of Micro, Small, and Medium Enterprises

 An enterprise shall be classified as a micro, small or medium enterprise on the basis of the following criteria, namely: --

  • a micro enterprise, where the investment in plant and machinery or equipment does not exceed one crore rupees and turnover does not exceed five crore rupees;
  • a small enterprise, where the investment in plant and machinery or equipment does not exceed ten crore rupees and turnover does not exceed fifty crore rupees; and
  • a medium enterprise, where the investment in plant and machinery or equipment does not exceed fifty crore rupees and turnover does not exceed two hundred and Fifty crore rupees.
 What are the benefits of MSME registration?
  • comparatively lower than regular loans for MSME registered individuals
  • Eligible for tax exemption under the MSME Act for those Businesses which have obtained an MSME certificate
  • Registered MSMEs are more preferred for various licenses and certificates issued by the government.
  • By getting the MSME registration done, an enterprise gets easy access to loans and credit facilities.
  • compensation on the expenditure incurred for ISO certification.
  • It also enables the allowed credit for MAT (Minimum Alternate Tax) to be carried forward for fifteen years (10 years otherwise).
  • Several concessions and rebates in the total cost of Patent registration or Trademark registrations
  • As the Udyam Registration Portal is linked with the e-marketplaces of the Government, it becomes easy for them to acquire government tenders.
What is the MSME registration process?
  • Government has organized a full system of Facilitation for Registration Process
  • An enterprise for the purpose of this process will be known as Udyam and its Registration Process will be known as 'Udyam Registration'
  • A permanent registration number will be given after registration.
  • After completion of the process of registration, a certificate will be issued online. This certificate will have a dynamic QR Code from which the web page on our Portal and details about the enterprise can be accessed
  • There will be no need for renewal of Registration.

MSME Registration is free, paperless and based on self- declaration
MSME registration process is fully online, paperless and based on self-declaration.

  • The form for registration shall be as provided in the Udyam Registration portal.
  • There will be no fee for filing Udyam Registration.
  • Aadhaar number shall be required for Udyam Registration.
  • The Aadhaar number shall be of the
    • proprietor in the case of a proprietorship firm,
    • of the managing partner in the case of a partnership firm
    •  and of a karta in the case of a Hindu Undivided Family (HUF).
    • In 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 along with its Aadhaar number.
  • In case an enterprise is duly registered as an Udyam with PAN,
  • any deficiency of information for previous years when it did not have PAN shall be filled up on self-declaration basis.
  • No enterprise shall file more than one Udyam Registration: Provided that any number of activities including manufacturing or service or trading or all may be specified or added in one Udyam Registration.
  • Whoever intentionally misrepresents or attempts to suppress the self-declared facts and figures appearing in the Udyam Registration or updation process shall be liable to such penalty as specified under section 27 of the Act.
Registration of Existing Enterprises
  • All existing enterprises registered under EM–Part-II or UAM shall register again on the Udyam Registration portal on or after the 1st day of July, 2020.
  • All enterprises registered till 30th June, 2020, shall be re-classified in accordance with this notification.
  • The existing enterprises registered prior to 30th June, 2020, shall continue to be valid only for a period up to the 31stday of March, 2021.
  • An enterprise registered with any other organization under the Ministry of Micro, Small and Medium Enterprises shall register itself under Udyam Registration.
What are the documents required for MSME registration?
The documentation for the registration of MSME/ Udyam Registration is very simple
  • Aadhar Number
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08-03-2022 Read More

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All you want to know about MSME registration in India