MSMEs make up a substantial portion of India’s economy. To support and promote the growth of MSMEs, the Indian government has introduced various schemes and incentives. One such initiative is the MSME registration process. MSME registration is a simple online process that provides various benefits to registered entities, such as easy access to loans, subsidies, and government schemes. This article will walk you through the importance of MSME registration in India, detailing each step along the way.
Importance of MSME registration
– Collateral-free loans are available from banks and the government:
To provide collateral-free loans to micro and small sector enterprises, the Government of India established the Credit Guarantee Fund Scheme (CGS).
– Reservation policies for the manufacturing sector:
Development and Regulation Act of 1951 is regarded as a crucial act in favour of SSI (Small Scale Industries) that provides reservation policies for the exclusive manufacture of items. The finance minister announced a collateral-free automatic loan of up to 3 lakh crore for small businesses to recover their debts and losses during COVID-19.
– Direct income tax exemptions:
According to the government programme, based on their operations, businesses registered under MSME are directly exempt from paying income tax for the first year of operation. It provides significant respite for businesses from meticulous bookkeeping practices and challenging auditing procedures.
– A Bar code registration subsidy:
MSME-registered businesses are eligible for bar code registration subsidies. Barcodes are presented as parallel lines and numbers that can be read by machines. Barcodes are crucial for tracking products throughout the full supply and chain management process.
– Support for avoiding payment delays:
The right to interest and a delay in payment for goods from customers is protected by the Ministry of Micro, Small, and Medium Enterprises. a law that places a strong focus on mediation, arbitration, and speedy conflict resolution.
Buyers are accountable for paying debts owed before the agreement’s start date if the business is a provider of goods and is registered under the MSME statute. If a date is not specified, a payment period of 15 days is permitted, but it cannot be longer than 45 days.
– Banks’ minimum interest rates:
For businesses covered by MSME, there is a cheaper interest rate. The banks’ goals include a 20% increase in credit to micro and small firms, a 10% yearly increase in the number of bank accounts held by micro and small businesses, and a 60% increase in credit lending to small-scale industries. MSME Registration in India for different businesses directly gain access to loans for their initial foray into the market quickly.
– A 15% CLCSS credit subsidy:
The Ministry of Micro, Small, and Medium Enterprises (MSME) has a programme called the Linked CGSTI Subsidy Scheme (CLCSS) that supports the technical advancement of companies. The scheme, which was introduced by the Indian government in October 2000, offers a 15% subsidy up to a maximum of Rs. 15 lakhs.
– 50% subsidy for patent registration:
After filing the application with an MSME certificate, businesses with MSME Certificate are entitled to 50% subsidy in patent registration.
How to register your MSME online
- Step 1
Visit the official website of the government http://udyamregistration.gov.in and on the Udyam Registration Portal’s main page, click the “For New Entrepreneurs who are not Registered as MSME or those with EM-II” button. This is necessary for both new and EM-II-registered business owners.
- Step 2
On the following screen, click the “Validate and Generate OTP Button” after entering the entrepreneur’s name and Aadhaar number. The PAN Verification page opens once this button is clicked, the OTP is obtained, and it is input.
- Step 3
You must select your firm’s kind among Micro, Small, or Medium Enterprises depending on the yearly turnover after inputting your Aadhar number. You must provide your PAN number before selecting “Validate.”
- Step 4
Personal information, including correspondence of the entire postal address and office address of the MSME, must be supplied after you have entered all the aforementioned information, which is one of the key components for MSME Registration in India.
- Step 5
Select the declaration after filling out the bank and enterprise details by clicking the “Submit and Get Final OTP” button. Once the OTP has been entered and the form has been submitted, the Udyam Registration Certificate (MSME Certificate) will be issued by email.
MSME online registration process for businesses with UAM
The following are the steps for MSME Registration in India for the business with UAM.
- Step 1: Businesses already having UAM (Udyog Aadhar Memorandum) registration needs to click the button “For those having registration as UAM” or “For those already having registration as UAM through Assisted filing” presented on the front page of the portal. The Udyog Aadhaar Number must be input on the subsequent page, and an OTP option must be chosen.
- Step 2: You have the choice of obtaining the OTP through email or mobile with the filled-out UAM. The “Validate and Generate OTP” button must be hit after selecting the OTP Options.
- Step 3: After inputting the OTP, the MSME registration form must be completed with the necessary information and documents related to business, communication, registration information, bank details, classification of the company, capital, and location and after submitting the same, Udyam registration is complete.
MSME registration fees and documents
There is no fee for MSME Registration in India. The following are the documents that are required for the application (non-exhaustive):
- Aadhaar card
- Bank details
- Election ID card
- PAN card
- Aadhar number for the business and Owner’s name
- Business Name
- Licenses and Machinery Bills
- Info. about the initial registration procedure for the business
- Documentation confirming the kind of the business
How to download the MSME registration certificate
MSME Registration in India provides a certificate. After successful registration on the Udyam Aadhar portal, the documents are verified on the backend by the authorities, and Udyam registration certificate (MSME Certificate) is provided. You can download the MSME certificate by logging into your account by visiting http://udyamregistration.gov.in.
- On top right corner of the web page, find the Print/Verify drop-down menu; select the option ‘Print Udyam Certificate’.
- The portal might further ask you to enter details such as 16-digit Udyam Registration Number and the mobile number you had filled in on the MSME registration application.
- Fill in the required details and proceed with the OTP verification.
- In the next step, enter the received OTP and click Validate OTP & Print.
- You can now view your Udyog Aadhaar Certificate data on the home screen.
- There are two options to view the MSME Registration certificate.
- If you want to view only the MSME certificate, select the ‘Print’ option.
- For viewing MSME certificate with the Udyam Aadhaar Memorandum (UAM) application, select the ‘Print with Annexure’ option.
Register your MSME to accelerate its growth
MSME Registration in India provides the business with various benefits and schemes that can help to grow your business. MSME Registration in India will make a significant contribution to the socioeconomic growth of the nation. The MSME industry contributes significantly to the creation of a significant number of affordable job possibilities.
What should be considered before registering in the MSME’s portal
- According to the MSME Act, a company can seek MSME Registration in India regardless of whether it is in the manufacturing or service lines of business. Although the Government of India has not yet made MSME Registration in India compulsory, it is advantageous to do so because it offers numerous advantages in terms of taxation, company setup, credit facilities, loans, etc.
- MSME Eligibility
The Micro, Small & Medium Enterprises Development Act of 2006 states that MSMEs can be classified as part of the manufacturing sectors if they meet certain criteria.
| Sector | Manufacturing Investment | Services Investment |
|---|---|---|
| Micro | < Rs.25 lakh | < Rs.10 lakh |
| Small | < Rs.5 crore | < Rs.2 crore |
| Medium | < Rs.10 crore | < Rs.5 crore |
- Revised Eligibility
Annual turnover has been introduced as a new component to the MSME definition by the Indian government, which also revised the investment requirement. According to the revised definition, MSME can be identified if:
Revised MSME Classification –
| Sector | Investment | Annual Turnover |
|---|---|---|
| Micro | < Rs.1 crore | < Rs.5 crore |
| Small | < Rs.10 crore | < Rs.50 crore |
| Medium | < Rs.50 crore | < Rs.250 crore |
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FAQs
MSME registration is a simple online process that provides various benefits to registered entities, such as easy access to loans, subsidies, and government schemes. It is essential for MSMEs to register because it enables them to avail of collateral-free loans from banks and the government, reservation policies for the manufacturing sector, direct income tax exemptions, bar code registration subsidy, support for avoiding payment delays, cheaper interest rates, and credit subsidies.
MSME registration provides various benefits to registered entities, such as easy access to loans, subsidies, and government schemes. It also offers collateral-free loans, reservation policies for the manufacturing sector, direct income tax exemptions, bar code registration subsidies, support for avoiding payment delays, and cheaper interest rates from banks.
To register your business for MSME online, you can visit the official website of the government http://udyamregistration.gov.in and follow the steps outlined in the text provided. This includes clicking the “For New Entrepreneurs who are not Registered as MSME or those with EM-II” button, entering your personal information, selecting your firm’s kind among Micro, Small, or Medium Enterprises, filling out the necessary details, and submitting the form.
The Linked CGSTI Subsidy Scheme (CLCSS) is a programme introduced by the Indian government in October 2000 that supports the technical advancement of companies. MSMEs are eligible for a 15% subsidy up to a maximum of Rs. 15 lakhs through this scheme.
Once you have completed the registration process and submitted the form, the Udyam Registration Certificate (MSME Certificate) will be issued by email. It typically takes around 1-2 working days to receive the certificate.
Yes, businesses with Udyog Aadhaar Memorandum (UAM) registration can also register for MSME. They can follow the steps outlined in the text provided, including clicking the “For those having registration as UAM” button on the front page of the portal, inputting their Udyog Aadhaar Number, and completing the necessary information and document requirements.