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.
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.
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:
|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
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.
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:
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.