MSME stands for Micro, Small and Medium Enterprise and any other enterprise as the authority deems fit under this categories. These small and medium enterprises are proved to be a...
We all know that India is transforming very rapidly as youth is moving towards startup. As a result, government is introducing beneficial schemes for MSMEs (Micro, Small & Medium Enterprises) to encourage them for their growth and long term survival. Earlier, Startups were very costly and anyone could rarely think of that but now, The Ministry of MSMEs has been aided the Start-ups in all possible ways for the growth of Indian Economy and makes the MSME Registration process easier. The government of India has enacted Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006 to promote, develop and enhance the competitiveness of micro, small and medium enterprises in the country. Before we proceed further towards MSMEs registration process, we must know what are MSMEs?
What are MSMEs?
According to the provision of MSMED Act, 2006, MSMEs are categorised according to their investments in manufacturing and service sectors respectively.
|Enterprise||Investment in Manufacturing Sector||Investment in Service Sector|
|Micro||Less than Rs25 Lakh||Less than Rs10 Lakh|
|Small||More than Rs25 Lakh but less than Rs5 crore||More than Rs10 Lakh but less than Rs2 crore|
|Medium||More than Rs5 crore but less than Rs10 crore||More than Rs2 crore but less than Rs5 crore.|
What are the documents required for MSMEs Registration?
- Business Address proof- Allotment letter of the land in case of self-owned Land/ Receipts of Property Tax/Municipal license issued by government/ (Rent agreement and NOC by landlord in case of Rented land).
- Copies of Purchase & Sales Bill- Copy of the sale bill of end product sold to customers and copy of the purchase bill of raw materials.
- Partnership Deed/ Memorandum of Association (MOA)/ Article of Association (AOA).
- Bill of all machines and equipments purchased for business operations.
- Copy of Industrial License.
- Identity and Address proof of Directors ( Aadhaar card, PAN card, Driving License)
- Contact information of Directors.
- National Industrial Classification code.
- Cancelled cheque of current account.
How to register MSME under Udyog Aadhaar?
MSME registration is compulsory for all those entrepreneurs who want to enjoy all the beneficial schemes of MSMEs. Companies who are incorporated as Private Limited, LLP, or proprietorship can also register themselves as MSME. Earlier MSMEs were registered under MSME- Enterprise Registration and Entrepreneur memorandum but now, MSME registration can be done under Udyog Aadhaar. According to the data of udyogaadhaar.gov.in, 69, 97,664 companies were registered under Udyog Aadhaar. However, The MSME registration process under Udyog Aadhaar is quite simple as follows:
- Firstly, the entrepreneur should fill their 12 digits Aadhaar number.
- Secondly, the name of the entrepreneur and then he/she must validate the Aadhaar by clicking on “Validate & Generate OTP”. The OTP will be send to the Aadhaar linked mobile number.
- After that, the entrepreneur may choose the social category whether they belong to General, SC or ST category.
- Then, entrepreneur may select his/her gender.
- After the gender selection, entrepreneur may choose the status of physically handicapped.
- Then, the entrepreneurs must enter the name of the organization by which their organization is known by customers or public. An applicant can have more than one enterprise but they need to register for different Udyog Aadhaar for each enterprise.
- Entrepreneurs must select the type of organization from the given list of appropriate type of organization of their organization.
- Then, the entrepreneurs may submit their PAN card details in case of Private Limited, Limited Liability Partnership or Cooperative. This is optional in case of other organizations.
- After that, entrepreneurs can add their plant locations. They can add more if in case they have more than 1 plant location.
- The applicants must fill the appropriate address of their organization including the district, state and pin code of the area.
- The entrepreneurs should enter the date on which they commenced the operations of the organization.
- Entrepreneurs must enter the details of previously applied Udyog Aadhaar for their organization, if any.
- An Entrepreneur should enter the bank details of the organization.
- Then, the entrepreneurs must select the major category of their organization, either manufacturing or service sector.
- Then the entrepreneurs must choose their multiple NIC code for their organization. The NIC code is prepared by Central statistical organization under Ministry of Statistics and Programmed Implementation, Government of India.
- After that, the entrepreneur must select the number of employees working in the organization.
- The applicant should enter the total worth of the plant and machineries they are using for their business.
- The entrepreneurs then based on the location of enterprise must fill in location of DIC (District Industries Center).
- After filling up all the details the applicant then submit his application online
- And at last, he/she can enter the OTP received 2nd time on mobile and Re-Captcha, and enter final submission of the application.
What are the benefits of MSME registration?
Easy financial aid from banks
Companies registered under MSME can easily take loans from banks. They can take collateral free loans from banks without pledging any property with banks. The Government of India launched Credit Guarantee Fund Scheme under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to provide Collateral free Loans to micro and small enterprises.
Preference in government tenders
Companies registered under MSME can get the preference in procuring government tenders as they have innovative techniques which make the processes effective as well as efficient.
Companies can enjoy initial year tax benefits depending on the nature of business as prescribed under Government Schemes after registering themselves under MSME, and they can also get benefits on stamp duty and Octroi refunds.
Concession in electricity bill
MSME registered companies can also get concession on electricity bill of their company’s land by making an application to electricity department with their MSME certificate.
Excise Exemption Scheme
MSME registered companies can take an advantage on Excise exemption in their initial year depending on the nature of their business.
Protection against delayed payments
The ministry of MSME has given protection to all MSME registered companies against delayed payments from their buyers and right to charge an interest from them in case of delayed payment. In case, there is no payment date on the agreement then the buyer would have to make the payment within 15 days or the day of acceptance of good but the payment due cannot exceed 45 days in case otherwise, they can resolve issue with Arbitration or Conciliation.
Subsidy on Patents registration
Companies who have MSME certificate can enjoy 50% subsidy on their Patents registration by making an application to the concerned department.
Opportunities for growth
MSME registered companies can expand their business on national and international level as government is supporting them in all way. In addition, they are also eligible for Industrial Promotion subsidy as per government schemes.
Exemption on the interest rate on overdraft
Companies who are MSME registered can take an advantage of 1% interest rate exemption on their bank overdrafts.
As per the record of msme.gov.in, Micro, Small and Medium Enterprises contribute 45% of country’s total industrial employment, 50% to India’s exports and 95% to India’s all industrial units. An entity should register them as MSME under Udyog Aadhaar if they want to enjoy all benefits of MSMEs. This scheme is a life savior to those startups who have latest innovative techniques but lack of funds for its implementation. . The Ministry of MSME is aiding all the MSMEs in all possible ways to encourage the growth of the economy. The MSME registration process is also very simple and one can obtain their MSME certificate in 2-3 days after filling up their form and submitting all the documents. Even then, you are not able to register your entity as MSME under Udyog Aadhar then contact for your assistance.