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MSME Registration

MSME Registration

MSME Registration In India

MSME Registration is a registration for enterprises are reaping various benefits out of it. MSME stands for Micro, Small and Medium Enterprises. In a developing country like India, MSME industries are the backbone of the economy.

MSME REGISTRATION

The Micro Small Medium Enterprises Development Act-MSMED is a landmark and innovative attempt to help start-up and growing entrepreneurs. MSME has been operational since 2nd October 2006 and remarkably contributing to the economy.

As per the msme.gov.in statistics, 95% of the entire industrial units and 6000 types of products are manufactured by MSME. Similarly, 50% of the total exports of the country come from MSME and 45% of industrial employment is generated by this sector.

The launching of MSME and its revision under Atmanirbhar Bharat Abhiyan (ABA) on 1st June 2020 offer abundant benefits. You can get enormous advantages through a MSME registration process to grow your enterprise.

Society Registration

Contributions

  • Approx. 30% of the country’s GDP.
  • Approx. 45% of the country’s manufacturing output.
  • Approx. 48% in the country’s exports.

Know everything essential about MSME and how to register and transform your enterprise into MSME below.

The classification was done on the basis of the investment put in the business of MSMEs. It was calculated as a sum total of the money invested in the plant, machinery and equipment.

Benefits of Society Registration

The micro, small, and medium enterprises have been classified as follows:

For a company manufacturing goods

  • Micro Enterprise- Up to Rs. 25 lakhs
  • Small Enterprise- Rs. 25 lakhs – 5 crores
  • Medium Enterprise- Rs. 5 crores – 10 crores

For a service organisation

  • Micro Enterprise- Up to Rs. 10 lakhs
  • Small Enterprise- Up to Rs. 10 lakhs – 2 crores
  • Medium Enterprise- Rs. 2 crores – 5 crores

However, under the Aatma Nirbhar Bharat Abhiyan (ABA) revision, the classification of investment and services have been removed. If you have a Udyog Aadhar Registration, your investment and annual turnover is redefined as follows:

Micro, Small and Medium Enterprises Classification

Size of the Enterprise Investment and Annual Turnover
Micro Investment less than Rs. 1 crore
Turnover less than Rs. 5 crores
Small Investment less than Rs. 10 crores
Turnover up to Rs. 50 crores
Medium Investment less than Rs. 10 crores
Turnover up to Rs. 50 crores

 

Difference between small and medium enterprise?

  • The investment in plant and machinery or equipment does not exceed ₹10 crore and turnover does not exceed ₹50 crore is small enterprise.
  • The investment in plant and machinery or equipment does not exceed ₹50 crore and turnover does not exceed ₹250 crore is medium enterprise.

Composite criteria: Investment and Turnover for Classification

A composite criterion of investment and turnover apply for classification of an enterprise as micro, small or medium.

It is pertinent to refer that if an enterprise crosses the ceiling limits specified for its current category in two criteria of investment or turnover, it will cease to exist in that category and be covered in the next higher category but no enterprise shall be covered in the lower category unless it goes below the ceiling limits define for its current category in both the criteria of investment as well as turnover.

Advantages of MSME

  • You can get a flexible bank loan with 1 to 1.5% of cheaper interest rates once you transform your business to MSME through an MSME registration online.
  • Your MAT (Minimum Alternate Tax) credit will be permitted and extended from 10 years to 15 years.
  • You will avail numerous concessions and rebates resulting in a drastic reduction of industry setting costs.
  • Your tenders will get priority and you will access interstate e-tenders and marketplace through government portals.
  • You will avail one-time settlement fee facility for your non-paid MSME amounts.
  • Low Interest rate on loan.
  • 100% tax exemption for Innovative start-ups.
  • Protection against Delayed Payments.
  • Subsidy on Patent Registration.
  • Collateral-Free Loan Facilities & Priority Lending.

How to Register MSME Online?

The process of the Udyog Aadhar application is usually quick and easy. However, you will require documents such as the Aadhar card, property papers, agreement of rent, company registration or purchase or sales bill, and your PAN along with a cancelled cheque. Follow the below steps to register your MSME:

  • Step-1: Go to the Ministry of MSME registration site through udyamregistration.gov.in and fill up the required details
  • Step-2: You will get a registration number after submitting your application with documents
  • Step-3: Pay the registration fee online
  • Step-4: Track your registration process and within one or two days your MSME will get registered through Udyog Aadhar online
  • Step-5: You will get your MSME registration certificate through email.

Frequently Asked Questions

Q1 Who is eligible for MSME?

Ans. 1 Anybody who owns manufacturing or business within the MSME limit of investment and services is eligible for MSME.

Ans. 2 MSME registration and update are done free of cost.

Ans. 3 Online Udyog Aadhar applications can be rejected for several reasons such as unpaid debt, low CIBIL score, lower cash flow, incomplete documents, etc.

Ans. 4 Yes, you can get provided you have a good CBIL score and opt for an unsecured business loan.

Ans. 5 Udyam registration is MSME registration and MSME Udyog Aadhar is the UIN or the 12-digit Unique Identification Number.

Ans. 6 The MSME enterprise should be in business for over a year and its annual turnover crosses the limit of INR 24 Lakhs. The documentation needed for loan eligibility includes KYC documents, Current Account statement for the last 6 months and business registration certificate.

Ans. 7 If there is no payment date on the agreement, then the buyer liable to make payment within fifteen days of acceptance of good or services. Otherwise, a payment due to a micro or small enterprise cannot exceed forty-five days from the day of deemed acceptance or the day of acceptance.

Ans. 8 MSME registration can only be done in two categories: Manufacturing enterprises and service enterprises. Trading companies are not covered under MSME registration.

Ans. 9 MSME registration can only be done in two categories: Manufacturing enterprises and service enterprises. Trading companies are not covered under MSME registration.

Ans. 10 It takes 2-3 days after final Submission of MSME registration form.