The growth of the booming MSME sector spreading far and wide is evident in the present time. Increasing at a CAGR of 18.5, this sector contributes significantly to the Gross Domestic Product (GDP) and socio-economic development.
Numerous schemes are run by the Ministry of MSME for required assistance for entrepreneurs, reinstating the growth and evident career opportunities in the sector. However, whether you are starting a new business or have an existing venture, MSME registration is essential to make the best out of it.
What is MSME?
Before delving into the registration process, let us first go through the basics of MSME. The MSME full form comprises Micro, Small, and Medium Enterprises. An enterprise can be put into different categories, in simpler words, as per its equipment, machinery, and investment cap.
Later, under the ABA or Atma Nirbhar Bharat Abhiyan, the annual turnover of enterprises was added to the list of determinants. If you have multiple MSMEs, you should get them registered separately and get the respective MSME certificates.
However, the understanding of these categories has its implications. The profit of any MSME business, which exceeds its investment limit set for its category (Micro/Small/Medium as per the MSME full form), gets nullified.
Benefits of MSME Registration
For any business, especially in its initial stage, loans and aid are needed for the owner to arm with necessary resources and grow. However, bearing a hefty load of EMIs and high-interest rates of loans at the initial stage of the business itself is no child’s play.
Thus, to assist in the upliftment of MSMEs, the Ministry of MSMEs provides several schemes for the owners, which they can only avail after registration. Once you get your MSME registration done, the following are the benefits you can avail from the Government of India (GOI):
- Avail tax exemption, i.e., exclude income from taxation by the federal or state government.
- Extension of Minimum Alternate Tax of up to 15 years instead of the usual 10 years
- Enjoy priority on license applications and others over those who have not registered under the Ministry of MSMEs.
- Avail concession and partial refunds or rebates for the incurred cost of setting up the industry or patent
- Access credit for your business with ease
- Avail schemes by GOI like Prime Minister Employment Generation Programme (PMEGP), SFURTI, CGTMSE, and others
- Avail preference on the Udyam Registration Portal for government tenders, e-marketplace, and other similar portals
- Avail as the low-interest rate on your MSME loan and considerably more affordable EMIs from lenders like ZipLoan that curates interest rates individually and provide the loan within three days
- Get a One-Time Settlement Fee in case of any delay or non-paid cost of MSME.
To get your hands on these lucrative benefits for MSMEs, you must get your MSME registration done successfully.
Documents required for registration
Before jumping to the registration process, you need to have the following documents at your disposal:
- Address proof of your enterprise
- A copy of the purchase bill book and sales
- Bills and receipts of expenditure for required machinery and equipment
- Industrial License Copy
- Aadhaar Number
- Bank Account Number
- IFSC Code
- NIC COde
- Employ data (only if it is applicable)
- Number of Employees
- Starting date of business
- In case of a partnership business, required details of a partnership.
- GSTIN certificate
- Registration certificate (in case of Registered Partnership firm) or Partnership deed in case of unregistered partnership firm)
- Memorandum of Association (MoA)
- Articles of Association (ADA)
- Certificate of Incorporation
- Copy of resolution passed in the company meeting
- Board Resolution’s copy authorized and signed by the director.
- A PAN card is advised. However, there is also a way to do MSME registration without PAN.
Once you have gathered all of these documents, you are ready to apply for your MSME application.
Process of Registration
You can do the registration through offline financial institutions or an online government portal. The latter sounds more appropriate given the convenience and the safety guidelines courtesy, the COVID-19 pandemic.
The portal allows registration for both new enterprises as well as those which are pre-registered. To ensure smooth and efficient MSME registration, follow the steps as per the category into which your enterprise falls:
For New Entrepreneurs With No Registration
- Visit udyamregistration.gov.in
- On the homepage, select the appropriate category of not being registered as an MSME
- Upon the opening of the Registration Page, enter your Aadhaar number and name
- Generate OTP by validating your entry
- Enter the received OTP, and then the PAN Verification page opens
In case you do not own a PAN card:
- Select “no” as you don’t have PAN and click “Next”
- Enter personal and industry details as asked in Udyam Registration Page
- Click on “Final Submit”
- A Registration number would appear with a “Thank You” message
- Upon getting GSTIN and PAN, get it updated on the portal to avoid suspension of your MSME registration
However, if you have a PAN card:
- Portal retrieves all the required details automatically from the government database and fill the details
- Fill in the required ITR details
- Click on the “Validate PAN” button
- Fill in personal details and industry details
- Submit it and get the OTP
For Entrepreneurs Who Already Have EM-II or UAM
- Visit udyamregistration.gov.in
- On the homepage, click on “For those having registration as EM-II or UAM” or “For those having registration as EM-II or UAM through Assisted Filing”.
- Enter your Udyog Aadhaar Number and select the OTP option
- Click on “Validate and Generate OTP”
- Fill registration details
Udyam aadhar registration is completed.
Once you have completed the MSME registration, an MSME certificate will be allotted to you. The MSME certificate acts as evidence of your registration and vital contribution to the nation’s economy.
Also, this becomes your golden ticket to avail of any schemes or aid by the government that requires valid documents as proof.
As long as your business remains operational and the classification criteria are met, your certificate remains valid. Now having understood the process, get your MSME registration done now!
Frequently Asked Questions:
Proprietorships, Hindu Undivided Family, Partnership Firm, One Person Company, Limited Liability Partnership, Private Limited Company, Limited Company, Producer Company, any association of persons, co-operative societies or any other undertaking can obtain MSME registration in India.
MSME registration is the process to register your business under MSMED (Micro, Small and Medium Enterprises Development) Act. It has several benefits that you can avail after registering your business.
How to register an MSME online?
1) Visit the UAM portal where you will be required to fill a form.
2) If you are registering your business as an MSME for the first time, click on the first link on the page or simply click here to open the form.
3) Enter the Aadhaar Number and Name and click on ‘Validate & Generate OTP’.
Benfits of MSME registration include easy sanction of bank loans (Priority sector lending), lower rates of interest, excise exemption scheme, the exemption under Direct Tax Laws and statutory support such as reservation and the Interest on Delayed Payments Act.
Usually, the issuance of the UDYAM Registration Certificate takes approximately four to five days after the submission of the application. You get an email alert with the UDYAM Registration Number registered in your certificate.
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.
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