MSME Registration in India

Every enterprise which falls under the definition of Micro, Small and Medium Enterprise must get itself registered under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 because there are a lot of benefits and government programs that accrue due to an enterprise being in this definition.

Few of which are-

• Loans at Lower rates
• Subsidies
• Various beneficial schemes for this sector

You may also like reading The Importance Of Micro, Small and Medium Enterprises (MSMEs). 

What are Micro, Small and Medium Enterprise?

The Micro, Small and Medium enterprise in India are defined under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, the criteria of classification is the investment in plant machinery/equipment and annual turnover.

Enterprises engaged in the manufacture or production, processing or preservation of goods are classified as micro small and medium as follows-

• • A micro enterprise is an enterprise with investment less than INR 1 crore and annual turnover less than INR 5 crores.
  • A small enterprise is an enterprise with investment ranging between INR 1-10 crores annual turnover ranging between INR 5 to 50 crores.
  • A medium enterprise is an enterprise with investment more than INR 10 crores but is less than INR 50 crores and annual turnover in the range of INR 50-250 crores.

In the case of MSMEs, the investment in plant and machinery is the original cost excluding land and building and the items specified by the Ministry of Small Scale Industries.

The Enterprises could be manufacturing or rendering services.

The criteria for being defined as Micro small and medium enterprises are as tabulated below-

Also, read Recent Budgets And The Growing Importance Of MSMEs. 

Previous and Latest MSME Classification

The Previous and latest MSME Classification is essentially different in the sense that previously there were different investment brackets for Manufacturing and Services sector and the investment limits were less, the previous classification only talked about investment (Plant and Machinery) but the new classification talks about investment (Plant and Machinery) and annual turnover both, having separate monetary brackets. With the advent of time the older monetary limits and the sectoral classification of MSME were felt obsolete by the government and were modified by the government in 2020.

Procedure

The registration process for MSME can also be done completely online as specified under the MSME Act, through the UDYAM registration portal.

The Process is completely online and registration certificate is received within days, the biggest positive of UDYAM registration is that the validity of registration is unlimited provided that it is not cancelled.

1. Filling of application process- The application form can be filled either online or offline which has all the necessary business details like the registration number, company name etc.
2. Registration can be filed for more than one industry of MSME.
3. Fill the Details like PAN card Number, Aadhar Card number, GSTIN(Goods and Services Tax Identification Number)[1] , etc.
4. No registration fee is required.
5. Individuals can also submit self-attested certificates.
6. Once all the details are filled properly and the documents are submitted business owners will receive a registration number for their businesses.'

Also, read The Income Tax Calculator - The Tool That Helps You Calculate Your Tax. 

Documents Required

1. Proof of Address.
2. Proof of Income.
3. In case of Rented Ownership, a No Objection Certificate(NOC) is required from the landlord, rent receipt, utility bill or an equivalent is also required as a proof of landlord’s ownership.
4. In case of a self-owned office an allotment letter, possession letter, property tax receipt, lease deed is required or a municipal license against the business’ name will suffice.
5. Receipt or copy of receipt of every sale and purchase.
6. Bills of Machinery purchased and Important license copies.
7. Articles of association(AOA) and Memorandum of Association(MOA) and partnership deed in case of a partnership and board resolution copy and certificate of incorporation are required.

[1] GSTIN is not necessary for the enterprises not mandated under the GST law to obtain it, those enterprises can get themselves registered without having the GSTIN. However, the enterprises mandated under the GST law must fill GSTIN while filling the form.