MSME Registration in India - Benefits, Eligibility, Documents and Process

MSME stands for Micro, Small, and Medium Enterprises. These enterprises are the backbone of the country's economy, especially for developing countries like India. This will help to grow the business mindset and push forward the nation's economic growth.

As the MSME industry includes small and medium-sized businesses, the number of labour is higher than in any other industry. So, this also helps in the employment generation. The MSME Act came into effect on October 2nd, 2006 to provide incentives and facilities to MSMEs across the country. After its launch, it became popular among businesses as it provides a complete Udyog Aadhar Registration online application process, includes no government fees, minimal documentation and self-declared information.

Classification of MSME 

Only service providers and product manufacturers can obtain MSME Registration. Following is the classification of Micro, Small, and Medium Enterprises:

1. Micro Enterprises: Investment in plant and machinery up to INR 1 crore and turnover up to INR 5 Crore.

2. Small Enterprises: Investment in plant and machinery up to INR 10 crore and turnover up to INR 50 Crore.

3. Medium Enterprises: Investment in plant and machinery up to INR 50 crore and turnover upto INR 250 Crore.

Benefits of MSME Registration

Some of the benefits of MSME registration under the provision of law are as follows: 

1. Collateral-Free Bank Loans

The Indian Government has made collateral-free loans available to MSME businesses. This program offers financial security to small businesses. Any new or old business can claim the benefits and for extra benefit, the Government of India launched SIDBI and MSME registration online to ensure that the Credit Guarantee Scheme is implemented properly.

2. Patent Registration Subsidiary

The MSMEs which are registered with the MSME ministry have the benefit of getting 50% subsidiary patent registration. This step encourages small businesses and firms to work on new projects and innovate new products and technology. Avail the benefit by submitting an application to the respective ministry.

3. Protection on Delayed Payments

The MSMEs are facing an issue of delayed payment and it disturbs the entire business because of a lack of payment. So, the Supreme Court has mandated that any buyer who purchases goods and services from the MSME should pay the complete payment within 15 days of purchasing the goods and services. If the buyer delays the payment by more than 45 days then they have to pay the interest as discussed with the MSME on the amount. 

4. Reimbursement of ISO Certification Charges

To obtain the ISO certification, all the expenses that are incurred by Micro, Small and Medium Enterprises will be reimbursed to the entrepreneur. So, this motivates the respective business to get ISO certification for their business and to export high-quality products abroad.

5. Fewer Electricity Bills

The registered MSMEs have the benefit of getting a concession on the electricity bills. This will help the businesses to increase production without worrying about the capital expenditure such as electricity bills, and other maintenance charges.

Eligibility Criteria for MSME Registration

The following are the criteria for MSME registration as a Micro, Small and Medium Enterprise:

• The manufacturing, service industries, wholesale, and retail trade which fulfils the revised MSME classification criteria of annual turnover and investment can apply for MSME registration online.

• These entities are eligible for MSME license and these are Individuals, startups, business owners, entrepreneurs, Private and public limited companies, Sole proprietorships, Partnership firms, Limited Liability Partnerships (LLPs), Self Help Groups (SHGs), Cooperative societies, Trusts.

Documents Required for MSME Registration

The following documents are required for MSME registration in India:

1. Aadhar Card.

• For a Proprietorship Firm, mention the Aadhar number of the proprietor in the Registration form.
• For a Partnership Firm, enter the Aadhar number of managing partners in the registration form.
• For Hindu Undivided Family (HUB), add the Aadhar number of Karta to the registration form.
• For a Company, LLP, enter Cooperative Society, Trust or a Society, the Aadhar number of the organization or authorized signatory such as the Director into the registration form.

2. PAN Card.

3. GST Identification Number (GSTIN).

MSME Registration Online Process

The MSME registration process is completely online and it must be completed through the government Udyam Portal. On the portal, the MSME registration can be done in the following two ways:

1. New Registration

• For new entrepreneurs who are not registered yet as MSMEs or those with EM-II.

2. Migrate to Udyam (Re-Register)

• For those already having registration as UAM.

• For those already having registration as UAM through Assisted filing.

New Entrepreneurs or EM-II Not Registered as MSME Yet

1. The new entrepreneurs or those who have EM-II registration will register under this option. This option will be available on the home page.

2. After clicking on the link, a new page will appear. Here fill in the Aadhaar Number and name of the Entrepreneur. 

3. Click on Validate & Generate OTP. You will receive the OTP by mail or mobile number linked with the Aadhaar Card.

4. Fill in the OTP and a PAN verification page opens. On this page, fill in the ‘Type of Organisation’ and enter the PAN number. Click on the ‘Validate PAN’ button.

5. Once the PAN verification is complete, a Udyam Registration Form will appear. The entrepreneurs have to fill in their personal and enterprise details.

6. Lastly, fill in the investment and turnover details, select the declaration and click on the “Submit & Get Final OTP” button. The Udyam Registration Certificate will be shared on the email of the entrepreneur. Also, the entrepreneur can check the status of the MSME license registration through the Udyam Registration Portal.

Registration for Those Already Have Udyog Aadhaar Memorandum (UAM)

1. The entrepreneurs who are already having UAM registration, have two options to choose from as stated above. Choose the option according to you, from the government portal. 

2. A new page will appear, fill in the Udyog Aadhaar Number and an OTP option. There are two options for OTP, one is to fill the OTP received on mobile and the second received by email. After filling information, click on “Validate & Generate OTP”. 

3. After entering the OTP and other details in the Udyam Registration Form, the registration will be complete.

How Registrationwala Can Help You?

At Registrationwala, we help entrepreneurs obtain an MSME registration online certificate in simple four steps:

1. Document collection

2. Filing the MSME Registration Form application

3. Obtaining the Registration

4. Delivering your MSMED registration certificate

Reach out to us to get your MSME business register online with the government. Our team will help you in the best possible way.