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National Industrial Classification code abbreviated as NIC Code is an imperative statistical standard developed to analyze and compare each business entity contribution in the asset development of the Indian Government. An accumulative data of multiple firms is used to measure economically active populace and its conveyance, arrange different types of labor, work insights of the distinctive fields, and other financial information, such as national salary. NIC Code compares the statistical data available from numerous sources and helps to analyze it, which is essential for the standardization of a system of classification economically. This blog underlines the importance of the NIC Code for MSME Registration.
Purpose of the NIC Code
NIC Code is mainly used for the following two purposes:
Udhyog Aadhaar is a free registration provided to micro, small and medium scale enterprises in India under the MSMED Act, 2006. The applicants of Udhyog Aadhaar Registration need to submit NIC Code.
LLP Registration or Company Registration
During LLP incorporation, the applicant is required to register the proposed company or LLP on the official portal of MCA (Ministry of Corporate Affairs). Thence, the NIC Code of the business is a crucial requisite.
Role of NIC Code for MSME Registration under Udyog Aadhaar
NIC is required when filling a form for registering under the Udyog Aadhaar for a Micro, Small, and Medium Enterprise. One needs to fill the information like Aadhar card number, name of the entrepreneur and enterprise, nature of the business, activities of MSME Unit, phone number, email address, postal address, bank details, district industry center, and NIC Code.
An applicant can easily fill all the details mentioned above in the form, but the confusion lies in filling NIC code. As often, the applicants are unsure about the National Industrial Classification code for their Micro, Small or Medium scale business.
The NIC Code in MSME is a classification system that enables one to classify the business activities carried by various Micro, Small, and Medium Enterprises. It is a numeric code in the form of a 2 to 3 digit code, a four-digit code, and a five-digit code. 2-3 digit codes represent the group of business activities, four-digit code symbolizes a class of business activity while five digit code represents sub-class of the business activity.
Advantages of Udyog Aadhaar Registration
Udyog Aadhaar is an initiative of the Government to foster the growth of small-scale businesses. It acts as a perfect replacement for the MSME Registration or SSI Registration. With over two lakhs registered MSME businesses, the industry is advancing towards a more organized and systematized sector. Let’s look at the benefits of having NIC Code for MSME to register under Udyog Aadhaar:
- Udyog Aadhaar Registration facilitates an entrepreneur with several benefits provided under the Government schemes such as loans with LOWER rates of interest, secure loans, loans without guarantee, etc.
- Also, registered MSMEs get financial support for participating in foreign exhibitions to showcase their products.
- The applicant of Udyog Aadhaar is eligible for subsidies provided by the Government.
- MSME Registration eases the process of bank accounts opening in the name of the business.
- It allows business entities to apply for micro-business loans and other additional schemes.
Checklist of Documents Required
Following is the list of documents that an applicant of Udhyog Aadhaar Registration must submit:
- Aadhaar Number, which is a twelve-digit number issued to the applicant;
- Name of applicant as specified in the Aadhaar Card;
- Mention the category you belong to, such as General, Scheduled Tribe (ST), Scheduled Caste (SC), or Other Backward Castes (OBC);
- Name of the entity under which the business is being conducted. An applicant can have multiple enterprises, and each one of them can be registered individually with the same Aadhaar Number for a separate Udyog Aadhaar;
- Specify the type of your business entity or legal entity such as Partnership Firm, Hindu Undivided Family, Proprietorship, Co-Operative, Private Limited Company, Self Help Group, LLP, Public Limited Company, and others;
- Address or postal of the business for communication purposes entailing contact numbers and email addresses;
- Details of previous MSME Registration (if any);
- Bank details of the company, including the IFSC Code and Bank Account number;
- Key operational areas of the business like manufacturing or service;
- National Industrial Classification or NIC Code for MSME;
- Date of commencement of the respective businesses;
- Number of persons employed in the business;
- Investment in Plant & Machinery / Equipment by the business;
- District Industry Center (DIC) nearest to such a business, if needed.
Procedure to enter NIC Code for Online MSME Registration
When filling the Udyog Aadhaar form, one perceives that the form is segregated in numerical sections. For instance, in the 10 number section, the applicant has to fill Major Activity, and in number 9, the bank details are required to be filled. Similarly, in the 11 number section, one has to fill the NIC Code list. Here are the steps which you must undertake for filling the NIC Code for MSME:
- To fill the code you can conduct a simple NIC Code search, by putting a keyword, or;
- You can choose the other option, wherein first, you have to choose a business activity such as manufacturing or service and enter two digit, 4digit, and 5digit NIC codes. In case, by mistake, you enter a wrong NIC Code, then also you can edit or correct in Udyog Aadhaar and generate acknowledgment.
The NIC Code must be entered from the handbook of National Industrial Classification. Applicants can select more than one National Industrial Classification Code-2008 to include all of its business activities. NIC Code for Udyog Aadhaar portrays the nature of the business. Multiple NIC Codes can be added by clicking the “Add More” icon after selecting the “Manufacturing” or “Services” radio button.
NIC Codes List for MSME
The Government has launched NIC Codes for the company/LLP registration or to attain a Udyog Aadhaar. To access the full list, you can refer to this link List of NIC Codes
- NIC Code for Education- Section P, Division 85 of the National Industrial Classification 2008, denotes NIC Codes for the education sectors. Group 851 codes apply to the primary education sectors, and Group 852 contains the codes for secondary education sectors. Further, Group 853 has codes for higher education, Group 854 for other education sectors, and Group 855 for educational support services.
- NIC Code for Activities for Extraterritorial Bodies and Organizations – Section U, Division 99 of NIC-2008 represents NIC Codes for Extraterritorial organizations and Bodies. This class consist of the activities of international organizations like the World Bank, United Nations and agencies, IMF, OPEC, European Commission, etc. Code for these is 99000.
- NIC Code for Hairdressing and Beauty Treatment- Section S, Division 96 of NIC-2008 covers the activities of hairdressing and beauty treatment for men & women like shaving, beard trimming, hair straightening, cutting, dyeing, trimming, waving, tinting. Moreover, other related activities such as facial massage, manicure, pedicure, and makeup, are also covered in this Section. The code defined for these activities is 96020.
- NIC Code for Retail Shops- A set of NIC Codes is defined regarding micro, small and medium-sized shops. All these codes are prescribed below:
|47711||Retail of hosiery goods, readymade garments, clothing accessories like ties, gloves, etc|
|47712||Retail sale of artificial fur and articles of fur|
|47713||Retail sale of footwear|
|47714||Retail sale of travel accessories made up of leather, leather goods and leather substitutes|
As MSMEs forms the backbone of the Indian economy, they get numerous subsidies and benefits from the Government. One such perk is Udyog Aadhaar, for which the applicants require to have NIC Code for MSME. For legal aid, in MSME Registration, reach out to Swarit Advisors.