MSME Registration

By: Diptika Jadhav - 11th January, 2021

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An enterprise shall be classified as a micro, small or medium enterprise on the basis of the following criteria, namely:

  1. a micro enterprise, where the investment in plant and machinery or equipment does not exceed one crore rupees and turnover does not exceed five crore rupees;
  2. a small enterprise, where the investment in plant and machinery or equipment does not exceed ten crore rupees and turnover does not exceed fifty crore rupees; and
  3. a medium enterprise, where the investment in plant and machinery or equipment does not exceed fifty crore rupees and turnover does not exceed two hundred and fifty crore rupees.
MSME Classification
Criteria Micro Small Medium*
Investment & Annual Turnover < Rs.1 crore & < Rs.5 crore < Rs.10 crore & < Rs.50 crore < Rs.50 crore & < Rs.250 crore

Becoming a Micro Small & Medium Enterprise:

  1. Any person who intends to establish a micro, small or medium enterprise may file Udyam Registration online in the Udyam Registration portal, based on self-declaration with no requirement to upload documents, papers, certificates or proof.
  2. On registration, an enterprise (referred to as "Udyam" in the Udyam Registration portal) will be assigned a permanent identity number to be known as "Udyam Registration Number".
  3. An e-certificate, namely, "Udyam Registration Certificate" shall be issued on completion of the registration process.
Registration Process:
  1. The form for registration shall be as provided in the Udyam Registration portal.
  2. The Governments Udyam registration portal opens with URL http://udyamregistration.gov.in
  3. There will be no fee for filing Udyam Registration.
  4. Aadhaar number shall be required for Udyam Registration.
  5. The Aadhaar number shall be of the proprietor in the case of a proprietorship firm, of the managing partner in the case of a partnership firm and of a karta in the case of a Hindu Undivided Family (HUF).
  6. In case of a Company or a Limited Liability Partnership or a Cooperative Society or a Society or a Trust, the organisation or its authorised signatory shall provide its GSTIN and PAN along with its Aadhaar number.
  7. In case an enterprise is duly registered as an Udyam with PAN, any deficiency of information for previous years when it did not have PAN shall be filled up on self-declaration basis.
  8. No enterprise shall file more than one Udyam Registration: Provided that any number of activities including manufacturing or service or both may be specified or added in one Udyam Registration.
  9. Whoever intentionally misrepresents or attempts to suppress the self-declared facts and figures appearing in the Udyam Registration or updation process shall be liable to such penalty as specified under section 27 of the Act.
  10. After filling the complete form you will get the certificate for MSME Registration. To know how it would be, you can download a copy of the Sample MSME Certificate. The Ministry will not issue you any hardcopy for it. You will get a virtual certificate for MSME Registration.
Registration of Existing Enterprise:
  1. All existing enterprises registered under EM–Part-II or UAM shall register again on the Udyam Registration portal on or after the 1st day of July, 2020.
  2. All enterprises registered till 30th June, 2020, shall be re-classified in accordance with this notification.
  3. The existing enterprises registered prior to 30th June, 2020, shall continue to be valid only for a period up to the 31stday of March, 2021.
  4. An enterprise registered with any other organisation under the Ministry of Micro, Small and Medium Enterprises shall register itself under Udyam Registration.
The following are the documents required for the registration process:
  1. Aadhar number of the applicant.
  2. Name, gender, PAN number, email id and mobile number of the applicant.
  3. PAN, location, and address of the organization.
  4. A number of employees and the date, you are planning to start your business.
  5. Bank account number and IFSC code.
  6. The basic business activity of the enterprise.
  7. NIC 2 digit code.
  8. Investment in plant and machinery/equipment.
  9. MoA and AoA.
  10. Copies of Sales Bill and Purchase Bill.
Benefits of MSME Registration:
  1. Due to the MSME Registration, the bank loans become cheaper as the interest rate is very low around ~ 1 to 1.5% less than the regular interest rate.
  2. It also allowed credit for minimum alternate tax (MAT) to be carried forward for up to 15 years.
  3. Once registered the cost getting a patent done, or the cost of setting up the industry reduces as many rebates and concessions are available.
  4. MSME registration helps to acquire government tenders easily as Udyam Registration Portal is integrated with Government e-Marketplace and various other State Government portals which give easy access to their marketplace and e-tenders.
  5. There is a One Time Settlement Fee for non-paid amounts of MSME.

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