Overview of MSME Registraion
MSME which refers to the Ministry of Micro Small and Medium Enterprises is a government body that deals with the formation of the rules and regulations regarding the small scale industries. India is the hub of small-scale industries, which affects the economy of India as well. Indian economy’s largest part depends on the small scale industries. The main aim of MSME is to boost the competition among the small-scale industries so that the Indian economy will improve or grow. It came into effect on 2nd October 2006.
MSME is considered the backbone of the Indian economy as this sector covers a wide range of parts of the Indian economy. When these industries grow our economy will automatically grow. Whether it is the manufacturing sector or service sector, if it comes in the category of the MSME it should take MSME Registration Certificate. Although this certificate is not mandatory, it is suggested here because this has a lot of benefits in terms of credit facilities, loans, etc.
The government is providing a lot of support to this section because it is a sector of small industries which needs less investment and can give high profit. It can not only help the government in boosting the economy but also helps them to fight many other problems of the country like unemployment, poverty, etc. There are thousands of MSME owners in the Indian market, but the benefits are given to only those MSME owners who have MSME Registration certificates. Without this one cannot get the benefits the government provided to the small-scale industries. Hence MSME Registration is highly recommended to small business owners.
The Government of India has enacted the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 under which MSME definition is given as
- “Enterprises that have been engaged in the manufacture and service sector whose investment is maximum Rs 25 lakhs or Rs. 10 lakhs respectively is called micro business industries as per the definition given in MSMED, Act 2006.”
- “Enterprises that have been engaged in the manufacturing sector and Service sector whose investment is maximum Rs 5 Crores or Rs. 2 Crores respectively are called small business industries as per MSMED, Act 2006.”
- “Enterprises that has been engaged in the manufacture and service sector whose investment maximum Rs. 10 Crores or Rs. 5 Crores respectively is called medium business enterprises as per the MSMED, Act 2006.”
But now the maximum and minimum limit has been changed by the government for the MSME. As per the change definition also got changed and the changed definitions are given below-
- “Enterprises whose investment or annual turnover is from Rs. 1 Crore to Rs. 5 Crore are called micro-businesses.”
- Enterprises whose investment or annual turnover is from Rs. 10 Crores to Rs. 50 Crores are called small business enterprises.”
- Enterprises whose investment or annual turnover is from Rs. 50 Crores to Rs. 250 Crores are called medium business industries.”
Why one should take MSME Registration?
As mentioned above that this sector is widely spreading in India. It is not only spreading but also start controlling the economy of India. It also contributes to the GDP of India. Because of all these reasons the government is now focusing on this sector and providing a lot of benefits and support to this particular sector. But the only thing is all this support and benefits are given only to those small industries which have MSME Registration. Hence one must possess this MSME Registration.
Classification of the MSME
As per the 2006 MSME Act, the classification is done in three categories. First is micro, then small and the last one is medium enterprises. These industries are classified on the basis of investment. Enterprises engaged in the manufacturing and service sector whose investment maximum of Rs 25 lakhs or Rs. 10 lakhs respectively are called micro business industries. Secondly, the enterprises engaged in the manufacturing sector and Service sector whose investment is a maximum of Rs 5 Crores or Rs. 2 Crores respectively are called small business industries. And lastly, the enterprises engaged in the manufacture and service sector whose investment maximum Rs. 10 Crores or Rs. 5 Crores respectively is called medium business enterprises.”
Because of the above-mentioned limit, the MSME sector is lacking behind and not able to grow. Hence government increases the turnover and investment limit of the MSME sector. Now the definitions also got changed. Enterprises whose investment or annual turnover is from Rs. 1 Crore to Rs. 5 Crore are called micro businesses. Secondly, the enterprises whose investment or annual turnover is from Rs. 10 Crores to Rs. 50 Crores are called small business enterprises. Lastly, the enterprises whose investment or annual turnover is from Rs. 50 Crores to Rs. 250 Crores are called medium business industries.”
Documents required for the MSME Registration
For the purpose of MSME, Registration one does not need various documents, but for the safety purpose, some general documents are always there with you which are given below-
- Aadhar card number of the person who wants to take MSME Registration.
- PAN card of the same person who is interested in taking the MSME Registration.
- Address proof of the company for which one is taking registration.
- Bank Account Details of the owner of the company.
- Sale Bill of the products or services which an enterprise sold.
- The Purchase Bill of the raw material which the enterprise purchases.
- Partnership deed if the enterprise is in partnership.
- MOA and AOA in the case of the company.
- Licenses related to the machinery of the company.
- Bills of the various machines the owner uses in the production.
- Rent agreement or lease agreement of the enterprise if it is on rent or lease respectively.
What is Udyam Registration?
Udyam Registration which is also known as MSME Registration is a government-based registration. Through this registration, the government provides a Unique Identification Number to the enterprise and also a certificate that gives the enterprise reorganization as MSME. Except for this portal or the government's single window system, there are no other means which provide the MSME Registration. Hence we can say that Udyam Portal is a government-based authority that gives registration to the MSMEs and give them a unique identity and after this registration, only such MSMEs are able to take all the benefits which are provided by the government to the MSMEs. Hence it is very important and necessary to take this registration without any delay.
What is the procedure of getting MSME Registration in India?
The process of getting MSME Registration is easy and online. There are not many documents that are needed for the registration. Only the Aadhar number is sufficient for the registration as MSME. The above-mentioned documents are basically for the safety purpose one must-have. At any time before the registration, if anybody at any stage needs such documents you should have them show them. PAN and GST details on the investment and also regarding the turnover of the enterprise will be taken automatically from the government database and it will be safe as well from the perspective of the government. Follow the steps given below to get the MSME Registration Certificate-
- Go on the Udyam Registration Portal
- Fill in all the details which are asked by them carefully
- Submit the details after checking them properly
- After that one confirmation message will appear on your screen, you have to enclose the reference number of the application through which you have applied
- After all the above formalities verification will be done
- After the valid verification you will get the MSME Certificate or Udyam Registration Certificate
- Now the applicant can download it from the account created by him or her for the registration on the government Udyam Portal.
Types of Udyam Registration
Following are the types of Udyam Registration for the different categories-
- Registration process for the Entrepreneurs Who is new in the market
- Migration to Udyam, we can call it re-registration
Procedure for the registration process for the new entrepreneurs
Following are the steps are given below which can help you to get the registration if you are a new entrepreneur in the market-
1. To get to the MSME Udyam Registration go to the government Udyam portal.
2. On the screen, a new page containing the Aadhaar Number dialogue box will display, you have to insert your 12-digit Aadhaar number in the same
3. Fill in all the detail which will be asked by them.
4. Next you have to press the 'Validate and Generate OTP' button, then an OTP will come on your registered mobile number.
5. Tap the 'Validate' button after entering the OTP (One Time Password) which has been sent to you by the Udyam Portal.
6. After successful verification, take the following steps:
- Enter the business structure and type of the business you are dealing with.
- PAN Number needs to be uploaded.
- Accept the declaration form and click the 'Validate' button to carry forward the process.
- As needed, provide ITR and GSTIN information that you have.
7. If the entrepreneur does not have a valid PAN card, then instead of that they can use the 'Name of the Entrepreneur' option and provide their name.
8. Fill up the fields with your valid phone number and email address which must be the correct one.
9. Provide detailed information about the enterprise's social category, gender, and name, and also provide the official address of the firm or company, or enterprise.
10. Next, submit the former EM-II/UAM registration number with the other information like the state of the firm, banking information, key business operations, NIC Codes relevant to activities, staff information, etc. Also, input the cost of establishing the plant and machinery.
11. Accept the declaration form and select the 'Submit and Get final OTP' option for carrying forward the registration process as a new entrepreneur and finishing the registration process by entering the One-Time Password sent to you by them.
Procedure to register as migration to Udyam
Following are the steps are given below which can help you in registering as migration to Udyam-
- Go to the government Udyam Portal and then click on the 'You can migrate to Udyam (Re-Register) here' option which appears on the screen.
- Fill in the Aadhar details properly and carefully without any mistake.
- Next, select the 'Validate and Generate OTP' option to carry forward the process of registration.
- Accept the declaration form and select the 'Submit and Get final OTP' option for carrying forward the registration process as a new entrepreneur and finishing the registration process by entering the One-Time Password sent to you by them.
Procedure for downloading the MSME Certificate from the Udyam portal
Following are the steps to download the Udyam Registration Certificate-
- Visit the government Udyam Portal and then pick the 'Print' option on the home page of the portal.
- Then you will be sent to a new window, where you will obtain the Udyog Aadhaar Memorandum.
- For downloading one has to provide a valid UAM number for the authority.
- Then after the above process you have to enter your Udyog Aadhaar-registered phone number
- Finally, press the 'Submit' button to carry forward the process.
- The gateway will deliver the One-Time-Password to the phone number you provided, you have to enter that OTP to continue or carry forward the process of the downloading.
- Finally, download the Udyog Aadhaar certification in PDF format and use it for the benefits provided by the government or whatever purpose you want to use it.
What are the registration fees for the Udyam Registration?
As mentioned above that MSME plays a very significant role in the growth of the economy of the country. It not only creates a difference in the growth of the economy but also impacts the GDP of the country. Hence government has decided to give extra facilities to the MSME sector through various schemes. Without the registration one cannot take the advantage of the schemes of the government hence this registration is necessary. But again there is a lot of MSME in the market, not all have the capacity and facility to pay the heavy registration fees, hence government for the purpose of the growth of the economy of the country and GDP decided that Udyam Registration Certificate will be granted free. Through this, they are encouraging the MSME business owners to take MSME Registration and help in the country’s growth.
Is it necessary to renew Udyam Registration Certificate?
It is a one-time certificate which means once you take it after fulfilling all the formalities, you do not need to renew it again. This is because the renewal of the certificate will take resources of the government again, as this certificate is provided free of cost, investment in the renewal is of no use and wasting of government resources again and again. One of the purposes for the renewal of any type of registration is to keep eye on the activities of the enterprise or the individual business so that they will not cause any harm. Udyam Certificate is providing for the MSME with good purpose and they don’t involve harm or any type of danger to the country hence government needs not to keep eyes on them by the renewal of the certificate and renewal is not required.
What is the difference between MSME Registration and Udyam Registration Certificate?
Most of the time people have doubts about both of them. People think that they are different and got confused between the above two. MSME Registration is the same as Udyam Registration Certificate. Both are designated with different names only. It is known as Udyam Registration Certificate because Udyam is the government portal where one needs to register for the certificate and after the proper process one will get the certificate. it is known by the name the MSME Certificate because Udyam provides certificates for the MSME. Hence there is no difference between them. They can be used in one another’s place.
Benefits of the Udyam Registration Certificate
Following is the list of the benefits one will get after MSME Registration or Udyam Registration Certificate-
- One will get the loan with the low-interest rates.
- Minimum Alternate Tax that is also known as MAT needs to carry forward for five years instead of ten years.
- It will provide you with many concessions and discounts on various things in the market government.
- You will get the benefit of the various schemes offered by the government after this registration.
- This certificate holder will get a concession while taking any patent registration.
- Can get access to E-marketplace and E-tenders of the government through Udyam Government Portal.
- You will get the benefit of the one-time settlement fees from the vendors.
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The MSME Udyam Registration Portal propagated the idea of paperless registration and
offers a variety of useful services to company owners. On July 1, 2020, the Union MSME
Ministry established the MSME Udyam Registration Portal through which MSME Registration
is happening nowadays. The site has shown its worth in terms of flexibility and features
so that it will be convenient for the MSME owners to take registration as MSME.
Currently, the platform has over 11 lakh registered MSMEs who have completed the
self-declaration registration procedure through the same Udyam Portal of the government.
This registration process was created by the Finance Minister as part of the Prime
Minister's assistance package in the wake of the Covid 19 epidemic where almost
everything went virtual and people got friendly with the online works. The process of
MSME Registration is not that tough but in case you need any help, you can visit
Frequently Asked Questions
Udyam Registration Portal is a government-based MSME Registration portal where you can visit and register your Micro Small and Medium Enterprises.
All the MSME business owners are eligible to get the MSME Registration and get the benefits of the government schemes specially made for the MSMEs.