MSME
MSME
“MSMEs are amongst the strongest drivers of economic development, innovation, and employment.”
– Shri Narayan Rane Hon’ble Union Minister for MSME
What is MSME?
Catalyst for Economic Development: The acronym MSME denotes Micro, Small, and Medium Enterprises, collectively representing a diverse spectrum of entrepreneurial ventures. In India, these enterprises play a pivotal role in steering the nation’s economic development. To foster their growth, the Government of India has instituted the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006.
Under the Ministry of Micro, Small and Medium Enterprises, entrepreneurs operating at micro, small, or medium scales are eligible for registration. This step serves as a formal acknowledgment of their presence and contribution to the economic landscape. MSMEs stand as the backbone of India’s economic growth, embodying resilience, innovation, and employment generation. Recognizing their significance, the government, in collaboration with State Governments, has instituted various schemes and funds to support their endeavours. To unlock the benefits and schemes offered by the Government of India and respective State Governments, mandatory registration of the firm or company under the MSME category is imperative.
The introduction of the MSMED Act highlights the government’s commitment to nurturing and facilitating the growth of these enterprises. By providing a supportive framework and incentivizing registration, the government aims to fortify the foundation of India’s economic growth through the robust and inclusive participation of MSMEs.
Udyog Aadhar Registration: Streamlining MSME Registration Process
The Udyog Aadhar initiative, introduced by the central government, aimed to simplify, and promote the online registration of Micro, Small, and Medium Enterprises (MSMEs). Before October 2016, obtaining an MSME registration involved a complex procedure, including the submission of Memorandum I and II.
In response to the recommendations from the Kamath Committee, the Ministry of MSME, in collaboration with the National Board of MSMEs and the Advisory Committee, implemented a significant reform. They introduced a concise one-page registration form, adopting a self-declaration format for MSME registration. This innovation streamlined the process and allowed enterprises to register seamlessly with the Ministry of MSME.
Upon successful registration, enterprises receive a Udyog Aadhaar Acknowledgement, accompanied by a unique identifier known as the Udyog Aadhaar Number. The Ministry of MSME has established the Udyog Aadhaar (UA) Portal (http://udyogaadhaar.gov.in) as the dedicated platform for online filing of Udyog Aadhaar Memorandum (UAM) by enterprises across the country. This portal is accessible not only through desktops but also on mobile devices, enhancing accessibility and convenience.
The UAM, a replacement for the Entrepreneurs Memorandum (EM parts -I & II), serves as a comprehensive document available on the official website www.udyogaahdaar.gov.in.
UAM Number: Empowering Certified MSMEs
The Udyog Aadhaar Memorandum (UAM) number is a unique identifier issued to certified micro, small, and medium enterprises. This streamlined approach alleviates the traditional challenges associated with MSME registration, making it easier for businesses to tap into beneficial government schemes.
The UAM registration process is entirely paperless and can be efficiently completed online, removing the barriers that previously discouraged many enterprises from official registration. Upon completion, the applicant is assigned a distinctive Udyog Aadhaar Number (UAN), a prerequisite for accessing various MSME scheme benefits.
However, it is important to note that UAM is not mandatory for all MSMEs. Entrepreneurs who have undergone UAM registration are required to migrate to the Udyam Registration platform to continue availing themselves of various MSME schemes. The deadline for this migration was June 30, 2022. Those who have not migrated must re-register under the Udyam Portal to continue benefiting from MSME schemes.
In essence, the Udyog Aadhar Registration, with its user-friendly approach and simplified procedures, stands as a transformative step towards empowering MSMEs and ensuring they can seamlessly access government initiatives for their growth and development.
Benefits of MSME Registration:
1. Permanent Identification:
Udyam Registration provides a unique and permanent identification number for your business, eliminating the need for periodic renewals. This ensures a hassle-free and enduring recognition.
2. Financial Support:
MSMEs are eligible for various financial schemes, subsidies, and incentives from the government and financial institutions.
3. Seamless Process with Mobile Accessibility:
One of the notable advantages is the accessibility of the registration process through your smartphone. This user-friendly approach simplifies the registration procedure, making it convenient for entrepreneurs.
4. Cost-Free Facility:
Udyam Registration is a cost-free facility, enabling businesses to obtain essential identification without incurring any financial burden. This aligns with the government’s commitment to supporting the growth of MSMEs without imposing registration fees.
5. Access to Collateral-Free Loans and Subsidies:
Registered businesses can leverage their Udyam status to secure loans without the need for collateral. Additionally, they become eligible for government subsidies, providing financial assistance and fostering sustainable growth.
6. Interest Rate Exemption on Bank Overdraft:
Enjoy a 1% exemption on the interest rate for Bank Overdraft, further easing the financial burden on MSMEs and promoting a conducive lending environment.
7. Priority in Government Tender Procurement:
Udyam-registered businesses gain a competitive edge by receiving preference in procuring government tenders. This advantage opens up new opportunities for collaboration and expansion.
8. Tax Rebates and Electricity Bill Concessions:
Avail various tax rebates and concessions on electricity bills, reducing operational costs and enhancing the overall financial viability of the business.
9. Discount on Trademark and Patent Filing:
Benefit from a special 50% discount on fees associated with filing trademarks and patents. This encourages businesses to protect their intellectual property, fostering innovation and creativity.
10. Expedited Dispute Resolution:
Udyam Registration facilitates a faster resolution of payment disputes, allowing businesses to avoid delays in receiving payments from buyers. This contributes to maintaining a healthy cash flow and overall business stability.
11. Technology Upgradation:
The government aids with the technological and infrastructural development of MSMEs.
In conclusion, Udyam Registration not only provides a formal identity to businesses but also unlocks a spectrum of benefits that are strategically designed to promote growth, financial stability, and competitiveness in the market.
LINK: https://msme.gov.in/sites/default/files/FlipbookEnglishSchemeBooklet.pdf
MSME category based on investment :
According to the MSMED Act, MSMEs are classified into two categories based on investment in plant and machinery or equipment:
- Manufacturing Enterprises &
- Service Enterprises.
CATEGORY | MANUFACTURING (NET) | SERVICE PROVIDER (NET) |
MICRO | Investment: < Rs.1 crore Turnover: < Rs.5 crore | Investment: < Rs.1 crore Turnover: < Rs.5 crore |
SMALL | Investment: < Rs.10 crore Turnover: < Rs.50 crore | Investment: < Rs.10 crore Turnover: < Rs.50 crore |
MEDIUM | Investment: < Rs.50 crore Turnover: < Rs.250 crore | Investment: < Rs.50 crore Turnover: < Rs.250 crore |
Who cannot get MSME registration?
Entities exceeding the MSME limit (Net turnover exceeds Rs.250 crores) cannot be registered as Micro Small and Medium Enterprises and even if an already registered entity exceeds the limit, it should change its company type to a private limited company or other types of companies.
Documents Required for MSME Registration :
The MSME registration documents are as follows:
- Aadhaar card
- PAN card
Procedure for MSME Registration:
Registration Process: To avail benefits and schemes provided by the government, it is advisable for MSMEs to register under the MSMED Act. The registration process can be done online through the Udyam Registration portal, which replaced the earlier Udyog Aadhaar registration system.
Step 1: Visit the Udyam Registration Portal :
Go to the official Udyam Registration portal at https://udyamregistration.gov.in/.
Step 2: Login or Register
If you already have an account, log in using your credentials. If you are a new user, click on the registration link to create a new account.
Step 3: Choose Registration Category
Once logged in, select the option ‘For new entrepreneurs who are not yet registered as MSME or those with EM-II.’ This option is for those who have not registered under the MSMED Act previously.
Step 4: Aadhar Verification :
Enter your Aadhar number in the designated column and your name in the second column. Click on ‘validate and generate OTP.’ An OTP will be sent to your registered mobile number/email for Aadhar verification.
Step 5: PAN Card Validation :
Similar to Aadhar verification, validate your PAN card details. Fill in the necessary information and ensure accuracy.
Step 6: Fill the Registration Form
Complete the registration form with accurate details. This may include business details, address, type of organization, and other relevant information.
Step 7: Verification
Review the entered details to ensure accuracy. Click on ‘submit and get the final OTP’ to proceed.
Step 8: Final OTP Submission
Enter the final OTP received on your registered mobile number/email. This step finalises the enrollment process.
Step 9: Reference Number Issuance
Upon successful submission of the final OTP, a reference number will be issued. This number serves as a tracking identifier for your registration.
Step 10: Verification and Certificate Issuance
After completing the enrollment, the authorities will verify the provided information. The certificate will be issued within a few days once the verification process is successful.
Note: Ensure that all details provided during the registration process are accurate and consistent with your official documents. This step-by-step guide aims to simplify the MSME registration process, making it easier for entrepreneurs to avail themselves of the benefits and schemes provided by the government under the MSMED Act.
MSME Registration Features:
Digitised Registration for Modern Convenience:
Embracing the digital era, MSME registration offers a digitised process, ensuring a seamless and efficient experience for entrepreneurs. The transition to digital platforms enhances accessibility and accelerates the registration procedure.
Streamlined and Paperless Process:
The MSME registration process is designed to be entirely paperless, eliminating the need for extensive paperwork. This eco-friendly approach not only reduces the environmental impact but also simplifies the registration journey for businesses.
Document-Free Submission for Simplified Compliance:
With the implementation of MSME registration, there is no cumbersome process of uploading extensive documents. This not only simplifies the registration process but also expedites the verification steps, making it a hassle-free experience for businesses.
Cost-Free Registration Process:
One of the standout features is that the MSME registration process comes at no cost. This inclusivity ensures that businesses of varying sizes can avail themselves of the benefits without any financial burden, fostering a conducive environment for growth.
Electronic Certificate with Dynamic QR Code:
Upon successful registration, businesses receive an electronic certificate equipped with a dynamic QR code. This not only serves as a digital validation but also enhances the security and authenticity of the registration, providing a modern and efficient solution.
One Company, One Registration:
To ensure clarity and adherence to regulatory standards, the MSME registration system mandates that a company can have only one registration. This simplifies the tracking and management of registered businesses, contributing to the overall integrity of the MSME database.
FAQ
FAQs
1. How many days does it take for MSME Registration Certificate?
Upon the successful completion of MSME registration, the customary time frame for receiving the MSME Registration Certificate is typically within 3 to 5 days. Subsequently, the certificate is dispatched to the entrepreneur's email address.
2. Who is eligible for MSME registration?
Entities falling within the Micro, Small, and Medium Enterprises (MSME) classification are qualified to seek MSME registration. However, individuals are not eligible to apply for MSME registration. Whether it is a proprietorship, partnership firm, company, trust, or society, entities with investments less than Rs. 50 crore and annual turnovers below Rs. 250 crores meet the criteria for MSME registration.
3. Whether MSMEs should adopt any particular legal form of organisation to avail benefits under MSME Act?
No specific legal form of organization needs to be adopted for businesses seeking benefits under the MSMED Act. Eligibility for the benefits outlined in the Act is contingent upon the enterprise meeting the stipulated investment and turnover criteria, and most importantly, having completed Udyam Registration. The type of legal organization, be it a proprietorship, partnership firm, limited liability partnership (LLP), company, or Hindu undivided family (HUF), does not matter. The key determinant is compliance with the defined financial parameters and the successful filing of Udyam Registration.
4. Is MSME registration mandatory?
No. It is not mandatory for small, medium, and micro enterprises to apply for MSME registration.
5. How to Apply for MSME Registration on Udyam Registration Portal?
The online MSME registration process encompasses two main categories on the portal:
- a) For Entrepreneurs and Non-Registered Entities:
New entrepreneurs and entities not yet registered as MSMEs, along with those holding EM-II, can initiate the online registration process on the Udyam Registration portal. This category is designed to cater to those who are venturing into MSME for the first time or are in the process of transitioning to the new registration system.
- b) For Entities with UAM Registration or Assisted Filing:
The portal accommodates businesses with existing Udyog Aadhaar Memorandum (UAM) registration and those who have completed registration through assisted filing. For entities falling into this category, the online MSME registration process allows for a seamless transition to the Udyam Registration platform.
6. What is the Process for MSME Online Registration?
- Visit the official government portal at udyamregistration.gov.in.
- Choose the appropriate category based on your registration status.
- Fill in the required details accurately in the online registration form.
- Submit the form for validation and receive an OTP for verification.
- Complete the verification process using the OTP received on your registered mobile number or email.
- After successful validation, the portal issues a reference number, marking the completion of the enrolment process.
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