All About MSME Registration

If you plan to start a business soon, you're in for many surprises. Most of them are good. This is a good time in your life. To unlock your potential, you must follow a few simple steps. The MSME registration is one such requirement that the government requires for any new business.

Many entrepreneurs are eager to start their own businesses. It is crucial that they are fully informed about mandatory registrations such as the MSME registration. We will help business owners to understand the MSME registration process. We will cover all aspects of MSME registrations, from the basic to the more advanced.

What's a MSME?

MSME stands for Micro, Small and Medium Enterprises. The MSME classification is determined by the enterprise's investment cap and any machinery or equipment it uses. The investment criteria for a Manufacturing company are as follows:

• Micro-
• Small-
• Medium-

These are the limitations that each category must adhere to. A business that begins as a micro, small, or medium company will have to bear the cost of growth. This is in addition to the fact that they must not exceed these limits. That would negate the benefits that they offer. Many industry leaders protested and demanded that a more dynamic classification be used to aid growth and scalability.

This demand led to important changes being made by the government under the Atma Nirbhar Bharat Abhiyan.

These changes have resulted in a composite system where both investment and annual turnover (or SME), are considered to be a part of the classification of businesses as MSME.

What's an MSME Certificate?

After successful MSME registration, applicants receive an MSME certificate. This certificate serves as proof of registration. This document is accepted for any scheme, concessions, or authorization.

Each applicant must register each MSMEs separately if they are trying to register more than one. Each applicant must obtain a separate MSME certificate.

Which businesses fall under the MSME Scheme?

The government has created classifications for every industry to help categorize businesses into micro, small, and medium. The classifications are currently based on:

• Manufacturing Enterprises
• Enterprises Rendering Services
  The Gazette of India June 1, 2020 has published the updated notification. It takes effect on July 1, 2020.

Micro-Enterprise

• Industries: Machinery and Plant
  
  If a business falls under the category of micro-enterprise, it will not be able to invest more than 1 crore rupees and its annual turnover is less than Rs 5 crore rupees.

Small Enterprise

• Industries: Machinery and Plant
  
  If the business is not more than 10 crore rupees and has a turnover of less than 50 crore rupees annually, it will be considered a small-sized enterprise.

Medium Enterprise

• Industries: Machinery and Plant
  
  If the business is not more than 50 crore rupees invested and has a turnover of less than 250 crore rupees annually, it will be considered a medium-sized enterprise.

The classification is as follows:

• Micro: Invest
• Small: Invest
• Medium: Invest &="" 250="50="" anual="" cr="? cr <="" Li="" turnover

What are the benefits of MSME registration?

The Ministry of Micro, Small, and Medium Enterprises recognizes the vitality and dynamism of India's MSME sector as a strong contributor to India's economic growth. The contributions and support that MSMEs have made to the industrialization of rural and backward regions over the past five decades has been remarkable.

MSMEs also play a significant role in the promotion of our nation's legacy. MSMEs are crucial for all of these reasons. The Ministry of MSMEs provides many benefits and schemes to MSME owners in order to make their business as profitable as possible while remaining stable.

These are some of the benefits that the Govt. offers registered MSMEs. India:

• Registering MSMEs has a significant advantage in that they have lower interest rates than other borrowers. MSMEs can get loans as low as 1% and with lower EMIs.
  
  
• Tax exemption can be granted to registered MSMEs who have an MSME Certificate.
  
  
• The minimum alternative tax (MAT) for registered MSMEs can also be extended up to 15 years. The regular MAT is only 10 years.
  
  
• MSMEs that are registered under the Ministry of Small and Medium Enterprises get priority for applications to the Government of India for licenses or certificates.
  
  
• An MSME that is registered receives various discounts and concessions on patents, as well as the costs of setting up the industry.
  
  
• Registered MSMEs owners can access credit easily for their businesses.
  
  
• MSMEs have a preference when it comes to government tenders via the Udyam Registration Portal. It is integrated with Government e-Marketplace, and other portals that allow MSMEs easy access to marketplaces and e-tenders.
  
  
• MSMEs may be eligible for a One-Time Settlement Fee to cover delayed or unpaid amounts of MSME.

The government of India also offers many schemes, such as the Prime Minister Employment Generation Programme, a Revamped scheme for the fund for the Regeneration Of Traditional Industries, Credit Guarantee Trust Fund for Micro & Small Enterprises, Credit Guarantee Trust Fund for Micro & Small Enterprises, Skill Upgrade & Mahila Yojana (MCY), and many others.

What purpose is an MSME registration?

The Ministry of MSMEs, Government of India, recognizes the importance of small and medium-sized enterprises to the country's economic growth. It provides a variety of benefits and subsidies to help achieve this goal.

These are required in order to be able to access them and to establish a smooth channel for MSME registration.

MSME Registration

It is very easy to register for MSME. These are the 9 main steps. This blog will provide more details about the registration process.

1. You can register through an online government portal or offline financial institutions.
   
   
2. Registering for an Aadhar number for MSME registration is a requirement.
   
   
3. Online applications can be made using the Udyog Aadhaar Registry.
   
   
4. Provisional registration is granted to an enterprise for 5 years or 60 months.
   
   
5. The Ministry of MSMEs issues a provisional MSME registration.
   
   
6. The e-Aadhaar OTP can verify your identity.
   
   
7. This provisional registration loan and NOC can be obtained easily.
   
   
8. Owners can apply for a permanent MSME license after they have started a business.
   
   
9. You can now get a permanent license with lifetime validity. This is subject to cancelation.
   
   

This is it. The simple process of MSME registration. It is important to have all of your documentation in order.

Documents needed for MSME registration

• Attestation of business
• Copie of the sales and purchase invoice book
• Receipts or bills for equipment and machinery purchases
• Copy of the Industrial Licence
• Aadhaar Number
• PAN card
• Number of Bank Accounts
• IFSC Code
• NIC Code
• If applicable, employee data
• Number of employees
• Date for the commencement of business
• Particulars of partnership for a partnership firm
• GSTIN certificate
• Unregistered Partnership firm: Partnership deed
• Register partnership firm
• Memorandum of Association
• Articles of Association
• Certificate of incorporation
• Copy of resolution passed at the general meeting
• A copy of the board resolution must be submitted with authorization from a director.
  
  

What's the validity of an MSME Certificate?

The MSME certificate is valid for as long as the business remains operational. It is valid for life, provided that the criteria are met.

Businesses can be canceled if their annual turnover exceeds the limit of the composite method of categorization.

Common questions around MSME registration

Are Udyog Aadhar & MSME Registration the Same?

No. Udyog Aadhar is a 12-digit number that MSMEs can access by registering on the Udyog Aadhaar portal. MSME is the registration to be classified under micro, small, and medium enterprises in order to obtain an MSME certificate. Registration for Udyog Aadhar is required in order to register MSME.

Are individuals eligible to register for MSME?

Individuals cannot register for MSME as they are only available to businesses and enterprises. If a small-scale or individual business wishes to register for MSME they are allowed. The process and benefits of MSME registration will be the same for this company.

Existing businesses can apply for MSME registration.

Existing businesses are eligible to apply for an MSME registration. The classification criteria will consider their current operations, including investments and annual turnover.

New businesses can apply for MSME registration.

Yes, you can apply for MSME registration from new businesses. The Ministry of MSMEs has many incentive programs to encourage new businesses to apply for MSME registration. It is mandatory that the criteria for the classification of small, medium, and micro industries be followed.

Trading companies can register under MSME.

Trading companies and enterprises cannot register as MSME. The Ministry of MSME currently allows only manufacturing and service industries to register in India as MSMEs. Trading companies are not eligible for registration because MSMEs were created to help and empower startups.

Do different registrations need to be obtained for plants that are set up in different areas?

There is no way to combine multiple branches, plants or industrial units under one MSME registration. The classification criteria covers the turnover and investment of each one. This registration is valid across the country, and it does not have to be defined by the state government.

Don't be afraid to ask a financial expert if you have any questions about the MSME registration process, or if you need assistance understanding the regulations and benefits.