Documents :-
1. pan Card
2. Aadhar Card
3. Trade License
4. Mobile Number
5. Email Id
6. Bank A/c No & Ifsc Code
1. pan Card
2. Aadhar Card
3. Trade License
4. Mobile Number
5. Email Id
6. Bank A/c No & Ifsc Code
7. Gst Registration Certificate (Optational)
8. Income Tax Last Year Return (Optational)
MSME Registration
MSME stands for micro, small and medium enterprises and any enterprise that falls under any of these three categories. MSME enterprises are the backbone of any economy and are an engine of economic growth, promoting equitable development for all. Therefore, to support and promote MSMEs, the Government of India through various subsidies, schemes and incentives promote MSMEs through the MSMED Act. To avail the benefits under the MSMED Act from Central or State Government and the Banking Sector, MSME Registration is required.Micro, Small and Medium sized enterprises in both the manufacturing and service sector can obtain MSME Registration under the MSMED Act. Though the MSME registration is not statutory, it is beneficial for business at it provides a range of benefits such as eligibility for lower rates of interest, excise exemption scheme, tax subsidies, power tariff subsidies, capital investment subsidies and other support. IndiaFilings can help your business obtain MSME Registration to avail a host of benefits.
Reasons to Register a MSME
MSME Registration is an optional Registration under the MSMED Act that provides Micro, Small and Medium sized enterprises with a host of benefits and access to subsidies and schemes.
Small Enterprise
A Small Enterprise in the manufacturing sector is an enterprise with more than Rs. 25 lakhs but not exceeding Rs. 5 crores of investment in plant & machinery. A Small Enterprise in the service sector is an enterprise with more than Rs. 10 lakhs but not exceeding Rs. 2 crores of investment in plant & machinery.
Registration Criteria
To be classified as a MSME, Enterprises in the Manufacturing sector need to have less than Rs.10 crores of investment in plant & machinery; service Enterprises must have an investment of less than Rs.5 crores of investment in plant & machinery.
Medium Enterprise
A Medium Enterprise in the manufacturing sector is an enterprise with more than Rs. 5 crores but not exceeding Rs. 10 crores of investment in plant & machinery. A Medium Enterprise in the service sector is an enterprise with more than Rs. 2 crores but not exceeding Rs. 5 crores of investment in plant & machinery.
Micro Enterprises
A Micro Enterprise in the manufacturing sector is an enterprise with less than Rs. 25 lakhs of investment in plant & machinery. A Micro Enterprise in the service sector is an enterprise with less than Rs. 10 lakhs of investment in plant & machinery.
What are Micro, Small & Medium Enterprises ?
Definitions of Micro, Small & Medium Enterprises In accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified in two Classes:
1. Manufacturing Enterprises-he enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the first schedule to the industries (Development and regulation) Act, 1951) or employing plant and machinery in the process of value addition to the final product having a distinct name or character or use. The Manufacturing Enterprise are defined in terms of investment in Plant & Machinery.
2. Service Enterprises:-The enterprises engaged in providing or rendering of services and are defined in terms of investment in equipment..
The limit for investment in plant and machinery / equipment for manufacturing / service enterprises, as notified,vide S.O. 1642(E) dtd.29-09-2006 are as under
| Manufacturing Sector | ||
| Enterprises | Investment in plant & machinery | |
| Micro Enterprises | Does not exceed twenty five lakh rupees | |
| Small Enterprises | More than twenty five lakh rupees but does not exceed five crore rupees | |
| Medium Enterprises | More than five crore rupees but does not exceed ten crore rupees | |
| Service Sector | ||
| Enterprises | Investment in equipments | |
| Micro Enterprises | Does not exceed ten lakh rupees: | |
| Small Enterprises | More than ten lakh rupees but does not exceed two crore rupees | |
| Medium Enterprises | More than two crore rupees but does not exceed five crore rupees | |
MSME stands for Micro, Small and Medium Enterprises. In a developing country like India, MSME industries are the backbone of the economy.
The MSME sector contributes to 45% of India’s Total Industrial Employment, 50% of India’s Total Exports and 95% of all industrial units of the country and more than 6000 types of products are manufactured in these industries (As per msme.gov.in). When these industries grow, the economy of the country grows as a whole and flourishes. These industries are also known as small-scale industries or SSI’s.
- What are Micro, Small and Medium Enterprise?
- Registration Process
- Benefits of MSME Registration
- Documents Required for MSME Registration
- MSME schemes launched by the Government are
Even if the Company is in the manufacturing line or the service line, registrations for both these areas can be obtained through the MSME act. This registration is not yet made mandatory by the Government but it is beneficial to get one’s business registered under this because it provides a lot of benefits in terms of taxation, setting up the business, credit facilities, loans etc.
The MSME became operational on October 02, 2006. It was established to promote, facilitate and develop the competitiveness of the micro, small and medium enterprises.
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What are Micro, Small and Medium Enterprise?
MSME are classified into two categories:
i. Manufacturing enterprise; and
ii. Service enterprise.
They are defined in term of investment in Plant and Machinery/ Equipment as below
| MICRO | SMALL | MEDIUM | |
| Manufacturing Enterprises | Rs 2,500,000 | Less than Rs 50,000,000 | Less than Rs 100,000,000 |
| Service Enterprises | Less than Rs 10,00,000 | Less than Rs 20,000,000 | Less than Rs 50,000,000 |
Registration Process
- To do the registration the small and medium scale industry owner has to fill a single form which he can do online as well as offline.
- If a person wants to do registration for more than one industry then also he/she can do individual registration.
- To do the registration he/she has to fill a single form which is available at the website which is listed below.
- The document required for the registration is Personal Aadhar number, Industry name, Address, bank account details and some common information.
- In this, the person can provide self-certified certificates.
- There are no registration fees required for this process.
- Once the detail-filled and upload you would be getting the registration number.
Benefits of MSME Registration
- Due to the MSME registration, the bank loans become cheaper as the interest rate is very low around ~ 1 to 1.5%. Much lower than interest on regular loans.
- There are various tax rebates offered to MSME.
- It also allowed credit for minimum alternate tax (MAT) to be carried forward for up to 15 years instead of 10 years
- There are many government tenders which are only open to the MSME Industries.
- They get easy access to credit.
- Once registered the cost getting a patent done, or the cost of setting up the industry reduces as many rebates and concessions are available.
- Business registered under MSME are given higher preference for government license and certification.
- There is a One Time Settlement Fee for non-paid amounts of MSME.
All Schemes OR (https://msme.gov.in/)
Documents Required for MSME Registration
The entity has to submit documents like business address proof, copies of purchase and sale bill, and licenses from regulatory bodies.
- Business Address Proof
- Copies of Sale Bill and Purchase Bill
- Partnership Deed/ MoA and AoA
- Copy of Licenses and Bills of Machinery Purchased
Business Address Proof:
If the premise is self-owned– Allotment letter, possession letter, lease deed or property tax receipt. If there is a municipal license in the business name or in the name of the proprietor, partner or director of the business, no other possession document is required to be submitted.
If the premise is rented– Rent receipt and a no objection certificate from the landlord is required. Also, any utility bill or document evidencing the landlord’s ownership is to be submitted.
Copies of Sale Bill and Purchase Bill:
Business is required to submit a copy of sale bill related to each end product that it will supply. Also, for each raw material that it will purchase, a purchase bill has to be submitted.
Partnership Deed/ MoA and AoA
If the business is a partnership firm, it has to submit its partnership deed. If the partnership firm is registered, it has to submit registration certificate also.
In case of a company, a copy of Memorandum of Association and Articles of Association, and certificate of incorporation has to be submitted. With it, a copy of the resolution passed in general meeting, and the copy of board resolution authorizing a director to sign the MSME application is also to be submitted.
Copy of Licenses and Bills of Machinery Purchased
In few cases, the applicant has to submit a copy of industrial license which is to be obtained by giving an application to Govt. of India. Further, all bills and receipts related to purchase and installation of plant and machinery have to be kept safe and required to be submitted on demand.
MSME schemes launched by the Government are:
Udyog Aadhaar memorandum:
Aadhaar card is a 12 digit number given to all individuals by the government. In this, the Aadhaar card is a mandatory requirement. The benefit of registering in this scheme is ease in availing credit, loans, and subsidies from the government. Registration can be done both ways in the online mode or the offline mode.
Zero Defect Zero Effect:
In this model, goods that are manufactured for export have to adhere to a certain standard so that they are not rejected or sent back to India. To achieve this the government has launched this scheme. In this, if the goods are exported these are eligible for some rebates and concessions.
Quality Management Standards & Quality technology Tools:
Registering in this scheme will help the micro, small and medium enterprises to understand and implement the quality standards that are required to be maintained along with the new technology. In this scheme, activities are conducted to sensitize the businesses about the new technology available through various seminars, campaigns, activities etc.
Grievance Monitoring System:
Registering under this scheme is beneficial in terms of getting the complaints of the business owners addressed. In this, the business owners can check the status of their complaints, open them if they are not satisfied with the outcome.
Incubation:
This scheme helps innovators with the implementation of their new design, ideas or products. Under this from 75% to 80% of the project cost can be financed by the government. This scheme promotes new ideas, designs, products etc.
Credit Linked Capital Subsidy Scheme:
Under this scheme, new technology is provided to the business owners to replace their old and obsolete technology. A capital subsidy is given to the business to upgrade and have better means to do their business. These small, micro and medium enterprises can directly approach the banks for these subsidies.
Women Entrepreneurship:
This scheme is especially started for women who want to start their own business. The government provides capital, counseling, training and delivery techniques to these women so that they manage their business and expand it.
The government has launched a number of more schemes and support system for these enterprises. To know more about the MSME schemes.
Frequently Asked Questions
Q. Is MSME updated to Udyog Aadhar?
A. Yes, MSME registration has been replaced with the Udyog Aadhar registration. If any micro, small and medium industries want to start any business; they need to do the registration with MSME/Udyog Aadhar. This registration with MSME/Udyog Aadhar can be done in two ways online and offline. This facility provides the business with a lot of benefits and subsidies.
Q. Is aadhar card compulsory?
A. Yes. For registration under the Udyog Aadhar scheme, aadhar card is compulsory. In case an applicant is other than the proprietor, the Aadhar card of the partner and the director will be required.
Q. Can existing and new businesses both apply?
A. Yes, an existing and new business can apply for MSME/Udyog Aadhar registration. Provided the existing unit is functioning and meets the threshold limits for registration.
Q. What is the validity of the certificate?
A. There is no expiry of the Udyog Aadhar Certificate. As long as the entity is ethical and financially healthy there will be no expiry of the certificate.
Q. Can trading companies register under MSME?
A. No. MSME covers only manufacturing and service industries. Trading companies are not covered by the scheme. MSME is to support startups with subsidies and benefits, trading companies are just like middlemen, a link between manufacturer and customer. Hence not covered under the scheme.
Q. Do I need multiple registrations for manufacturing plants in different cities?
A. No. The MSME/Udyog Aadhar certificate is for a single entity irrespective of multiple branches or plants. However, information about multiple branches or plants must be furnished.
Q. What are the activities specifically excluded from coverage under MSME?
A. Ministry of Micro, Small and Medium Enterprises (MSME) has clarified as per notification S.O 2576 (E) dated 18.09.2015 and subsequent notification no S.O 85(E) dated 10.1.2017, activities that would be specifically not included in the manufacturing or production of commodities or rendering of services as per Section 7 of the said Act.
- Forest and Logging
- Fishing and aquaculture
- Wholesale, retail trade and repair of motor vehicle and motorcycles
- Wholesale trade except for motor vehicles and motorcycles.
- Retail Trade Except of Motor Vehicles and motor cycles
- Activities of households as employees for domestic personnel
- Undifferentiated goods and services producing activities of private households for own
- Activities of extraterritorial organisations and bodies
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