What is MSME and What are the benefits of MSME Registration?

MSME registration benefits
Dashmeet Kaur
| Updated: Feb 24, 2020 | Category: Government, MSME

A popular idiom, “Big things come in small packages” emphasize that one cannot estimate the value of something based on its size. Irrespective of being small, an object can be equally or more efficient than a big object. Likewise, in the corporate world, small scale Companies can give fierce competition to large businesses. Government of India has acknowledged the importance of Micro, Small and Medium Enterprises (MSME) in economic growth. Therefore, it takes rigorous actions to underpin them.   However, the Company can only avail subsidies, incentives and schemes, if registered under MSME. This document will introduce you to the MSME Registration benefits, eligibility criteria and other aspects related to it. 

MSME Registration in a nutshell

Micro, Small and Medium Enterprises or MSME is any entity that falls under any of these categories.  Such enterprises are predominantly more labour driven in contrast to large Companies and create extensive employment opportunities. MSME sector contributes a significant portion in the development of industrial production, manufacturing, exports unit in India. 

The Government initiated MSMED Act, 2006 to flourish Micro, Small and Medium Enterprises. It facilitates the promotion of MSME through several incentives, subsidies and schemes. All micro, small and medium scale Private Limited Companies, Proprietorship firms, LLPs, Public Limited Companies and Partnership Firms can register to avail MSME Registration benefits.

Considerable benefits of MSME Registration

Though MSME Registration is not mandatory, yet it is prudent to get Certificate to reap numerous perks under MSMED Act. There is an array of MSME Registration benefits from the perspective of lending to cluster financing and access to quality management techniques. Some other advantages to possess MSME Certificate are as follows:

  • 50% subsidy on the Patent fee- Creativity and innovation is as precious as gems and needs to be preserved by Patent Registration. Generally, it requires hefty fees to apply for Patent Registration but with MSME Registration, the Companies get 50% subsidy. Such a move aims to encourage more small and medium entrepreneurs to invent new masterpieces. 
  • Collateral free loans– Under Credit Guarantee Trust Fund Scheme, MSMEs can avail a collateral-free loan of up to, INR 50Lakh from banks and NBFCs. It ensures to fulfill the financial needs of Micro, Small and Medium Enterprises. This is the biggest boon for startups as they often face financial crunch in the initial stage of their business.  
  • Reservation Policy– It is one of the most crucial benefits of MSME Registration that safeguard Micro, Small and Medium Enterprises from stiff competition. The Central Government grants exclusive rights to MSME for manufacturing certain products such as bangles, mustard oil, bread, wooden furniture, jute, brakes for automobiles and others. The Government Stores Purchase Program reserves the purchase of more than 300 products exclusively from MSME sector.
  • Capital aid for technological upgradation– Since Small and Micro Enterprises are usually located in remote areas, so they do not get access to the latest technology tools. The Government strives to modernize MSME industry with Technological Upgradation Scheme. It helps them to upgrade their equipment with the latest technology by enabling lower-interest loans from the banks.
  • Payment exemptions on ISO Certification– A registered MSME can claim the expenses spent during the process of ISO Certification.

Browse through our articles on services provided at Swarit Advisors, and just let us know if we can help you with your Food Business or MSME Registration or Startup Services.

Checklist of documents required for MSME Registration

An applicant of MSME Registration applicant needs to submit the valid documents given below along with his Application:

  • A copy of Aadhaar Card;
  • Name of the business entity or Company;
  • Address proof of the registered office address like Rental Agreement (if the office is on rent and NOC from the landowner);
  • Certificate of Incorporation (COI)of the Company;
  • Detailed information (name, address, nationality) of all the Company’s employees;
  • Type of proposed organization;
  • A copy of PAN card;
  • Personal details of the applicant like email address and mobile no.;
  • Specify the central operations of your current business;
  • Memorandum of Association (MOA);
  • Article of Association (AOA);
  • 2 Digit National Industry Classification (NIC) Code;
  • Investment in Plant & Equipment or Machinery;
  • Submit a cancelled cheque of Current business account.

Who can apply for MSME Registration Certificate?

The applicant must comply with the below-prescribed criteria to yield the MSME Registration benefits:

Manufacturing Enterprises: The medium enterprises belonging to the manufacturing sector must have an investment of less than INR 10Crores in the plant & machinery whereas, for micro and small enterprises, the investment limit is less than INR 25 Lakhs and less than INR 5 Crores respectively.

Service Enterprises:  The micro enterprises in the service domain should have an investment of less than INR 10 Lakhs and for small enterprises; the limit extends to less than INR 2 crores.  A medium scale enterprise needs to have an investment of less than INR 5 crores.

Basis of Eligibility Criteria

(Investment in Plant and Machinery/Equipment)




Manufacturing Enterprises

INR 25,00,000

Less than INR 5,00,00,000

Less than INR
10,00, 00,000

Service Enterprises

Less than INR 10,00,000

Less than INR

Less than INR

Online procedure to register under MSMED Act

If you pass the eligibility criteria of MSME Registration, follow the simple steps given below for MSME Registration:

  1. Visit Udyog Aadhaar portal-The first step is to visit the official website of Udyog Aadhaar and register as an entrepreneur.
  2. Filing of the Application Form-The next step is to fill in all the necessary details of MSME industry in which you want to run the business.
  3. Submit essential documents– As documentation is an important stage of MSME Registration, so attach all the prescribed documents. Ensure that the documents are authentic and valid.
  4. Provide self-attested Certificates- Now submit the attested copy of all required Certificates.
  5. Wait for the proceedings- Once you have submitted the Application with the required documents, you have to wait for 2-3 working days for the response from the Regulatory Authority.
  6. Download MSME Registration Certificate- At this stage, you will receive MSME Registration Number which you can use to download MSME Registration Certificate from the website of Udyog Aadhaar.


A micro, small or medium-scale entrepreneur can employ several benefits from MSME Registration. It will give a new direction to your business.

Thus, take the assistance of Swarit Advisors and streamline the process of online MSME Registration.
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