- The Ministry of Micro, Small and Medium Businesses, or MSME Registration for brief, is the principal government agency responsible for developing and monitoring the laws, regulations, and norms that apply to India’s small-scale industries.
- On October 2, 2006, the MSME went into force. It seeks to promote, encourage, and increase the competitiveness of MSMEs operating throughout India.
- Micro, Small, and Medium-Sized Businesses, or MSME, are regarded as the foundation of the Indian economy.
- An enormous number of small-scale industries are included in the MSME sector, which makes it one of India’s major contributors to GDP.
- An effort supported by the government called MSME aims to promote the expansion of small-scale businesses that operate in both the organised and unorganised sectors.
MSME Registration Benefits
- Bank Loans– Loans are simple to obtain for MSMEs. If an MSME is registered with the appropriate authorities, this will become seamless.
- Tax Exemptions– MSMEs are eligible for a variety of government-provided tax exemptions and credits.
- Minimum Alternative Tax (MAT)– Registered MSMEs might benefit from a 15-year minimum alternative tax carryover period. This benefit usually lasts for just ten years.
- Secure Tenders- MSMEs that have registered could participate in government contracts and bids. For a registered MSME, winning a bid is simpler because of their validity. In addition, the appropriate government would inform registered MSMEs about a tender.
- Ease of Credit- A other type of credit facility from a financial institution is simpler to acquire. So, registered MSME have access to this benefit. Thus, MSME registration is necessary to obtain loans more quickly.
- Higher benefits from Government- When it comes to using government facilities, registered MSMEs are more advantageous. When opposed to an unregistered MSME, the government as well as the general public would have more faith and confidence in the registered MSME.
- Opportunities for Growth– The possibility of diversification is increased through MSME registration. An individual would gain greater recognition if they thought about MSME registration. In addition, registered MSMEs will be acknowledged in trade shows and conventions that are geared towards exports.
- Collateral Loans- The advantages of collateral-free loans would also be available to registered MSMEs. Loans to MSMEs often have a minimum amount of less than Rs 10 lakhs. For any loan valued below the aforementioned sum, banks would not demand any kind of security.
Which Entity can apply for MSME Registration Process
- Sole Proprietor– Any business that has a single person running and managing operations is eligible to apply for MSME registration.
- Partnership– In order for two or more people to form a legal business entity, they must agree to split the company’s profits. An application for MSME registration may be made by a partnership’s business.
- Limited Liability Partnership– The requirements of the Limited Liability Partnership Act of 2008 govern limited liability partnerships (LLP Act 2008). The level of contribution made by the partnership determines the status of the partners. LLPs are eligible to apply for MSME registration.
- Producer Company- A producer company is a business that engages in operations for the purpose of producing agricultural products. These businesses are recognised by section 465(1) of the 2013 Companies Act’s rules. This form can be used for the aforementioned registration because agricultural activities are one of MSMEs’ primary business activity.
- Private Limited Company- Every business that is registered under the 2013 Companies Act or the 1956 Company Law is eligible to participate in MSME activities.
- Hindu Undivided Family– A karta would oversee an Institution as its manager. There are additional HUF members than the Karta. A HUF may register an MSME.
- One Person Company– An organisation that is registered as a one-person business may pursue the MSME registration procedure.
- Co-operative Society– Every organisation that has a Co-operative Societies Act registration may apply for MSME registration.
Eligibility Criteria for Udyam Registration Online
- Turnover Criteria– The organisation that wants to register as an MSME must fulfil the above-mentioned turnover requirements.
- Compliance under MSMED Act– In addition to the aforementioned requirements, the investor or owner must invest more than Rs. 20 crore and the turnover must be less than Rs. 100 crore. According to the May 2020 amendment, this condition of a turnover of less than $100 billion is necessary. Either the manufacturing sector or the service sector must have this turnover in equipment.
How to Apply for MSME Registration/ Udyam Registration
- Fill the Application Form– Either an offline approach or an online process can be used to register an MSME. The application must be filled out completely by the applicant. The required paperwork must be prepared after the application form has been submitted.
- Prepare Documentation- The applicant must submit the necessary papers for the MSME application in the following phase. As required for MSME registration, all requested information must be provided. The processing of the documentation takes roughly three working days.
- Submit the Application- The applicant must submit the documents after supplying them. Normally, submitting the documentation would take two to three working days. The authority will verify the documents when they are presented together with the application.
- Issuance of Certificate- The authority will check the documentation as the last stage. The same will be allowed if every document complies with the verification criterion. The applicant will receive the registration certificate.
Documents Required for MSME Registration Process
- PAN Card Details/ Information of the members of the organisation or the entity.
- Aadhar Card Details of all the members of the organisation.
- Proof of ownership – Either through some form of agreement, utility bills, leased document or property documents of the premises.
- If in case the place being used is a rented premises then the proof of the payment of utility bills must be provided. Apart from this, a No Objection Certificate is required to be submitted to the authority.
- Copy of Purchase Bill of every capital goods and raw materials purchased.
- Copies of Sale Bills of all the products that are sold.
- Copy of the Partnership Deed in case the firm is a partnership entity or a limited liability partnership.
- Memorandum of Association of the company.
- Articles of Association of the company.
- Copy of the resolutions undertaken in shareholders and board meeting.
- Copies of any permits or industrial licenses required under the respective acts.
- An affidavit on Rs. 10/-Non-Judicial Stamp Paper. This must be attested and notarised by a judicial officer.
- Purchase Bill of the Machinery Installed.
- Bills relating to Purchasing and Installation of plant and machinery.
- Information of Accounting and Bank Account Statement.
Turnover Criteria for MSME Registration
- Micro Enterprise: A micro enterprise is defined as an enterprise where the annual turnover does not exceed Rs. 5 crore.
- Small Enterprise: A small enterprise is defined as an enterprise where the annual turnover is more than Rs. 5 crore but does not exceed Rs. 75 crore.
- Medium Enterprise: A medium enterprise is defined as an enterprise where the annual turnover is more than Rs. 75 crore but does not exceed Rs. 250 crore.
It is important to note that the turnover criteria may vary depending on the industry or sector in which the enterprise operates. Additionally, the turnover criteria are subject to periodic review and revision by the Government of India.