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If your company is micro, small or medium, you need MSME registration in order get access to many incentives provided by the government under the MSME act.
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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:
- Micro Enterprises: Investment in plant and machinery up to INR 1 crore and turnover up to INR 5 Crore.
- Small Enterprises: Investment in plant and machinery up to INR 10 crore and turnover up to INR 50 Crore.
- 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 LoansThe 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 SubsidiaryThe 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 PaymentsThe 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 ChargesTo 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 BillsThe 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:
- 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.
- PAN Card.
- GST Identification Number (GSTIN).
Packing License Registration Process in India
The process of obtaining Legal Metrology Packer and Manufacturing license registration in India is as follows:
How GLOBAL TAXMAN Can Help You?
At GLOBAL TAXMAN, we help entrepreneurs obtain an MSME registration online certificate in simple four steps:- Document collection
- Filing the MSME Registration Form application
- Obtaining the Registration
- 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.
Frequently Asked Questions
For an entity, there is no validity of MSME certificate/ Udyam certificate. The certificate can be used as long as the entity is using ethical practices and is financially stable.
Yes, the Udyam Registration is free of cost and you don’t need to pay any registration fees. Also, there are no fees charged for updating, MSME renewal or any other service of Udyam.
A. SSI MSME Registration is the Small Scale Industry MSME Registration gaining which the business becomes eligible for schemes and subsidies by the Government.
A. Any registered MSME can apply for trademark registration. They can apply for the logo with the regional office of the Trademark Authority of India.
