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How to Get MSME Registration in India - BizAdvisors

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How to Get MSME Registration in India

How to get MSME Registration in India

Micro, Small, and Medium-Sized Enterprises, or MSME, are the foundation of the Indian economy. MSME Registration in India gives our economy the resilience it needs to withstand adversity on a global scale. MSMEs currently provide 6.11 percent of India’s manufacturing GDP and 33.4 percent of its manufacturing output, respectively. Additionally, they support 120 million jobs in India and account for about 45 percent of all exports from that country. MSME registration is necessary in order to participate in the MSME sector in India. Regardless of whether a business is in the manufacturing or service sectors, it must register as an MSME according to the MSME legislation. In terms of taxation and financial opportunities to expand the firm, MSME Registration offers various advantages to the companies. To learn more about MSME Registration in India, let’s look further.

Micro, Small, and Medium Business Definition

Determining the size of a business in terms of the investments made in it is an essential component of MSME Registration. The previous MSME classification was based on the amount spent on machinery, equipment, or a facility.

In the following table, the definition of a Micro, Small, and Medium Enterprise is summarised:

SectorBased on Investment Criterion
MicroSmallMedium
ManufacturingUp to Rs. 25 LakhsUp to Rs. 5 croresUp to Rs. 10 crores
ServicesUp to Rs. 10 LakhsUp to Rs. 2 croresUp to Rs. 5 crores

Growth is frequently hampered by these low investment requirements, which causes the desire for revision of the MSME classification to rise with time.

The classification standards for the Aatmanirbhar Bharat Abhiyan were updated by the government with these issues in mind.

There is no longer a division between the manufacturing and service sectors, and the classification now includes both annual turnover and investment.

The following definitions apply to the new classification that is taken into account for MSME Registration:

Classification CriteriaAnnual TurnoverInvestment
MicroLess than Rs. 5 croresLess than Rs. 1 crore
SmallLess than Rs. 50 croresLess than Rs. 10 crores
MediumLess than Rs. 250 croresLess than Rs. 50 crores

What Advantages Come with MSME Registration?

  • Individuals can more easily access bank loans at interest rates that are significantly lower than those of standard loans thanks to MSME Registration.
  • The MSME Act makes businesses that have received an MSME certificate eligible for tax exemption.
  • For numerous permits and certificates granted by the government, registered MSMEs are highly desired.
  • An organisation can easily acquire loans and credit facilities by completing the MSME Registration process.
  • A registered MSME is also reimbursed for the costs associated with ISO certification.
  • Additionally, it permits the MAT (Minimum Alternate Tax) credit allowed to be carried forward for fifteen years (10 years otherwise).
  • Because of various discounts and rebates after MSME Registration, the overall cost of a product patent or starting an industry decreases.
  • It makes it simpler to obtain government contracts. This is due to the Udyam Registration portal linkage with the government e-marketplace, which makes it simple to access e-tenders.

What Documents are Needed for MSME Registration?

The business entity must submit a number of documents in order to register as an MSME. These consist of:

  • proof of a business address
  • copy of the sales and purchase invoices
  • Articles of Association, Memorandum of Association, and Partnership Deed
  • copies of the bills and permits for the equipment purchased for use

What Procedure is Involved in Registering an MSME?

Companies must register as MSMEs online through the Udyam Registration.gov.in site. They are registered under two broad categories, namely:

  • MSME Registration for unregistered business owners
  • EM-II or UAM Registration for individuals who have already completed MSME Registration (Udyog Aadhar Memorandum)

Let’s go into more information about each of these MSME Registration categories.

New MSME Registration for Entrepreneurs

To register an MSME, one should go to MSME website[1] With or without a PAN card, you can do this by utilizing the number on your Aadhar card.

The following are the steps for MSME Registration using a PAN card:

  • Select the portal’s “For New Entrepreneurs who are Not Yet Registered as MSME” button.
  • On the MSME registration page, provide your name and Aadhar number as prompted.
  • Create and verify OTP.
  • When you enter ITR information, the portal pulls information from the Government database if you already have a PAN card.
  • Fill in the information about your factory or industry after validating your PAN.
  • Once all the information has been submitted, you must submit it to receive the final OTP.
  • After completing this step, your MSME Registration is complete, and a reference number is provided. You will obtain the Udyam Registration Certificate once the MSME Registration has been verified, which could take a few days.

The majority of the procedures for MSME Registration without a PAN card are the same as those outlined above, with the exception that you must choose “No” when asked, “Do you have a PAN?”

Following that, you must continue by filling out the personal and professional details.

Remember that in order to prevent the suspension of your Udyam Registration, you must update your PAN and GSTIN on the portal.

MSME Registration for persons with an EM-II or UAM already

Visit https://udyamregistration.gov.in and select the ‘For those possessing registration as EM-II or UAM’ button if you are already registered as an EM-II or UAM.

The next step will produce and verify an OTP when you provide your Udyog Aadhar number. The MSME Registration procedure will then be finished.

Conclusion

It is entirely up to the Entrepreneur whether or not to obtain MSME Registration or Udyog Aadhaar. To enjoy benefits including protection from late payments under the MSMED Act, it is advised that the majority of enterprises seek MSME Registration as soon as they register. There are many helpful resources for business owners on the MSME Registration portal website. Consult an expert before MSME Registration. Contact a professional at bizadvisors.io.

Read our article:A Complete Guide on Online MSME Registration Procedure

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