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MSME Registration

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WHAT IS MSME?

MSME stands for Micro, Small and Medium Enterprises. They are small-sized entities that are defined as per their investments. These organizations are doing tremendous contributions to the economy fostering by creating opportunities, employment, etc. The government of India has enacted the Micro, Small and Medium Enterprises Act, 2006 which governs the provisions for MSME.

CLASSIFICATION OF MSME

MSMEs are classified as per their investments made in plant & machinery or equipment if they are operating in the manufacture sector or service sector respectively.

  • Enterprises engaged in the process of manufacturing, producing, processing or preserving of goods and products. These enterprises invested as specified below:
    • MICRO ENTERPRISE: Investment in Plant & machinery doesn’t exceed INR Twenty-Five Lac • SMALL ENTERPRISE: Investment in Plant & machinery exceeds INR Twenty-Five Lac but doesn't exceed INR Five Crore • MEDIUM ENTERPRISE: Investment in Plant & machinery exceed INR Five Crore but doesn’t exceed INR Ten Crore
  • Enterprises engaged in providing or rendering the services with the following investments as specified below:
    • MICRO ENTERPRISE: Investment in equipment doesn't exceed INR Ten Lac. • SMALL ENTERPRISE: Investment in equipment is more than INR Ten Five Lac but doesn't exceed INR Two Crore. • MEDIUM ENTERPRISE: Investment in Plant & machinery exceed INR Two Crore but doesn’t exceed INR Five Crore.

ELIGIBILITY FOR APPLYING FOR MSME REGISTRATION

Those entities which are defined in the category of micro, small and medium enterprise as per the MSMED Act, 2006 are only eligible for obtaining the registration of MSME:

 

INVESTMENT

SECTOR

MICRO

SMALL

MEDIUM

MANUFACTURING

UPTO INR 25,00,000

LESS THAN INR 50,000,000

LESS THAN INR 100,000,000

SERVICE

UPTO INR 10,00,000

LESS THAN 20,000,000

LESS THAN 50,000,000

BENEFITS OF MSME REGISTRATION

Following are the benefits of getting an MSME certificate:

  • Collateral free loans from any Banks.
  • Reduced rates of interest in loans.
  • 1% exemption on an interest rate of Over Draft.
  • Benefits of International Trade Fairs.
  • 50% subsidy for patent registrations.
  • State Government provides subsidy on power and taxes.
  • All banks recognize MSME and they provide a higher amount of loans with lower interest rates.

DOCUMENTATION FOR REGISTRATION

An entity seeking a certificate of registration for MSME needs to submit the following documents:

  • ADDRESS PROOF: Proof for Business premise has to be submitted.
  • • OWNED PREMISE: In case if there is any municipal license in the name of the business, proprietor, partner or director, no other possession document is required to be submitted. In any other case allotment letter, registry, possession letter or property tax receipt will be submitted. • RENTED PREMISE: In case the premise is rented, rent receipt and utility bill in the name of the landlord is required. Also, No Objection Certificate (NOC) from an owner/landlord is also submitted.
  • COPY OF BILLS: Copies of bills is also required to be submitted.
    • SALE BILLS: MSME is required to submit a copy of purchase bills for every supply it has made. • PURCHASE BILLS: Also, for every purchase, it has made, it has to submit the copies of purchase bills.
  • MOA & AOA: In the case of Company, a copy of the Memorandum of Association & Article of association along with Certificate of incorporation (COI) is required to be submitted. Plus, board resolution has to be passed for authorizing directors to sign the application for MSME registration on its behalf.
  • LICENSES FROM REGULATORY AUTHORITY: Certain organization has Industrial License; an applicant in few cases has to submit the copy of such license to an authority.
  • OTHER BILLS: Bills & receipt of the purchasing and installation of plant & machinery have to be submitted.
  • AADHAR NUMBER: This Aadhar number has to be of authorized person in case of proprietorship firm, partnership firm or any other form of organization.
  • NAME OF OWNER: Name of an applicant as per Aadhar card.
  • BUSINESS NAME: Registered name of an organization through which it is conducting its activities. Of its business.
  • TYPE OF BUSINESS: Type of organization has to be mentioned such as a proprietorship firm, partnership firm, Private Limited Company, Co-Operative Society, etc.
  • DATE OF COMMENCEMENT OF BUSINESS: Date from which an organization started its operations or its date of incorporation in case of companies.
  • BANK DETAILS: Complete bank details of company such as Bank Name, Branch, Account number, IFSC code.
  • MISCELLANEOUS: Such other information such as several people employed, key areas of activities of the organization, etc.

MSME REGISTRATION

Following are the key points for registration of MSMEs:

  • Registration for MSME is now a smooth and less complicated process with few and simplified forms as compared to earlier 11 different types of forms which were required to be filed 
  • The government of India has introduced the "Udyog Aadhaar Registration" process for a simplified process for registration. Under this only two types of forms are filed:
    • Entrepreneur Memorandum–I • Entrepreneur Memorandum-II
  • The registration under Udyog Aadhaar registration is a completely online process free of cost. Also, MSMEs registered with Udyog Aadhaar is also entitled to certain benefits like a subsidy, lesser rate of interests, easy loans, etc.
  • “Udyog Aadhaar Memorandum” is a platform that provides certification of MSMEs existence along with other mandatory basic information such as name address father's name, date of birth, bank account details, etc.
  • Once the form is submitted online, an acknowledgment is generated online on the email id of an applicant which contains Udyog Aadhaar Number (UAN).
  • MSME owner needs to file a one-page application form. He can submit it either online or offline.
  • This form is a self-certification form through which an applicant confirms its existence, location, the business activity carried by him, bank account details, employment details, etc.
  • No registration fee is required for this stage of registration.
  • After the registration is complete, an applicant will be allotted Unique Registration Number which is mailed to E-mail id mentioned in Udyog Aadhaar Memorandum.

Frequently Asked Questions

  • 1. What is Udyog Aadhar Certificate?

    In the year 2015, the name of the MSME certificate was changed to Udyog Aadhar Certificate.

  • 2. Is Aadhar card sufficient for MSME registration?

    A simple form with Aadhar card is sufficient for MSME registration. Aadhar number is also mandatory for MSME registration.

  • 3. Can existing businesses apply for MSME registration?

    Yes, any form of an entity whether new or existing can apply for MSME registration.

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