How to Start a MSME Registration

registrtion process
service package

What is an MSME/SSI/Udyam Registration?

The Micro, Small and Medium Enterprises (MSME) are considered essential for our Indian Economy as this sector not only acts as a job creator for our youth but also plays a crucial role in the Industrialization of the Rural and Backward areas. An MSME Registration is obtained as per the MSMED Act. However, obtaining registration is not at all mandatory, but it shall be taken into consideration that the businesses or entity with MSME Registration are eligible to avail the benefits and schemes made by the Government.

Examples of such benefits are exemption from the Direct Tax, Private-Sector lending, exemption from Excise Duties, power tariff subsidies, capital investment subsidies. Some of the prominent and well-known MSMEs in India are DFM Foods, Ankur Scientific Energy Technologies, Molecular Connections, SL Packaging, Chem Process System, Mynd Solutions, etc.

Further, MSMEs and SSIs (Small Scale Industries) are eligible to obtain registration under the MSMED Act. Furthermore, according to the MSMED (Micro Small and Medium Enterprise Development) Act, 2006, the term MSME includes the following two listed:

  • Service Enterprise

    This Industry is mainly engaged in providing services to other industries.

  • Manufacturing Enterprise

    This Industry is engaged in manufacturing activities.

However, the same distinction has been eliminated by the Ministry of Finance by way of an announcement made on May 13, 2020.

What is a Micro Small and Medium Enterprise?

As per the MSMED Act, 2006, MSMEs and SSIs were enacted to strengthen and boost the Small-Scale sector in India. Earlier, both Service and Manufacturing were considered distinct and separate from each other, having different amount prescribed for the Investment Required.

However, as per the latest amendment made in the definition of MSME by the Ministry of Finance, the difference between the manufacturing and service sectors has been eliminated, Investment Limits have been Revised, and a Turnover Criteria has been introduced. This amendment was announced by our Finance Minister, Mrs. Nirmala Sitharaman, on 13 May 2020. The following listed are considered as MSMEs under the MSMED Act, 2006:

Micro-Enterprise

Type of Industries

Type of Investment

Investment Amount

Turnover Amount

Manufacturing and Service Sector

In Plant and Machinery

Less than Rs 1 Crore

Less than Rs 5 Crore

Small-Enterprises

Types of Industries

Type of Investment

Investment Amount

Turnover Amount

Manufacturing and Service Sector

In Plant and Machinery

Rs 1 Crore to Rs 10 Crore

Rs 5 Crore to Rs 50 Crore

Medium Enterprises

Types of Industries

Type of Investment

Investment Amount

Turnover Amount

Manufacturing and Service Sector

In Plant and Machinery

Rs 10 Crore to Rs 20 Crore

Rs 50 Crore to Rs 100 Crore

Benefits of MSME Registration in India

Benefits of MSMEs

Although obtaining MSME Registration is not mandatory for the MSMEs dealing in service and Manufacturing Sector. However, one cannot avail the benefits or the advantages offered after obtaining MSME Registration. The following listed are the benefits of Online MSME Registration:

  • Any company which holds an MSME Registration is able to obtain loans from banks at a comparatively cheaper rate, approximately 1- 1.5 percent. This is much lower than the normal bank rates.
  • Various Tax Rebates and Exemptions are provided to MSMEs.
  • MSMEs are permitted to carry forward the credit for MAT (Minimum Alternate Tax) up to a period of 15 years, which in the general case is ten years.
  • There are various tenders available only for the industries having registration in MSME Act.
  • MSME receives easy credit facility from various Financial Entities.
  • Industries having registration in MSME Act are given higher preference in comparison to normal industries.
  • Companies or the industries holding an MSME Certificate have better growth opportunities as they get direct entry in major national and international trade fairs and also have better occasions to present themselves to the world.
  • MSMEs are qualified to obtain Collateral free loans as banks do not accept any collateral security for the loan amount up to Rs 10 Lakhs.
  • Industries having registration under MSME are qualified to get reimbursement of ISO Certification.

Eligibility Criteria for Register an MSME/SSI in India

To become eligible for obtaining MSME Registration, the owner is required to invest less than Rs 20 Crores and must have a turnover of less than Rs 100 Crore (as per the amendment made on 13 May 2020) in plant and machinery either for a Manufacturing or Service Sector.

If, at any point in time, these industries exceed the investment limit, then they are required to surrender or cancel their MSME Registration provided under the MSMED Act.

Who can Apply for Registration under MSME Act?

Eligibility Under MSMEs

Anyone who can fulfill either one or multiple criteria mentioned below are eligible to apply for registration under the MSME Act:

  • You have a Limited Liability Partnership.
  • You are a part of the Hindu Undivided Family.
  • You are a Sole Proprietor
  • You are an owner of One Person Company.
  • You own a Production Company that with the production of materials
  • You have a Private Limited Company
  • You have Co-operative Societies.

Significance of MSME Registration for SSI

The points that deals with the significance of MSME Registration is mentioned below:

  • Obtaining MSME registration is essential for organizations, as it brings both credibility and clarity in the functioning of the entity.
  • If in case anyone is planning to start an MSME anywhere in India, then, in this case, the MSME department authorized by the Indian Government will help in the promotion of his or her enterprise.
  • Registration in MSME is a must for availing benefits such as incentives, subsidies and bank loans.

Documents Required for MSME Registration

The documents needed for obtaining online MSME Registration are as follows:

  • PAN Card Details of the proprietor/ all the directors/all the partners.
  • Aadhar Card Details of the proprietor/all the directors/all the partners.
  • Proof of ownership of the place being used as a Registered Office such as the Allotment Letter/Lease Agreement/Possession Letter/Property Tax Receipt.
  • If in case the place being used is a rented premise, then the Rent Agreement with the No-Objection Certificate (NOC) from the landlord together with the utility bill.
  • Copy of Purchase Bill of every raw material purchased.
  • Copy of Sale Bill for each end product.
  • A Copy of Partnership Deed in the case of a Partnership Firm.
  • Copy of Memorandum of Association (MOA) and Articles of Association (AOA) and Certificate of Incorporation (COI) in the case of Private Limited Company together with the Board's Resolution passes authorizing the director to sign the application.
  • Copy of the Industrial License as acquired under the Industrial Development and Regulation Act, 1951.
  • An affidavit on Rs. 10/-Non-Judicial Stamp Paper duly attested by the Notary Officer declaring the Power Requirement and the Status of the Machinery Installed etc.
  • Purchase Bill of the Machinery Installed.
  • Bills relating to Purchasing and Installation of plant and machinery.
  • Bank Account Statement.

Procedure for MSME/Udyog Aadhaar Registration

Online Process of MSME

The steps involved in the process of obtaining MSME Registration are mentioned below:

  • Fill the MSME Form

    In the first and foremost step, the applicant is required to fill the application form with all the required details. After that, the applicant is required to submit the form to the concerned MSME department. This step can be commenced either offline or online.

  • Prepare all the required Documents

    Now, in the next step, the applicant is required to prepare all the documents needed for obtaining MSME Registration. Such documents should be according to MSME Registration application Form. Usually, this process takes about two to three working days to reach the next step.

  • Filing the MSME Application

    In the third step, the applicant is required to upload all the needed documents and submit the application to the MSME Registrar. Then the regulatory authorities will process and verify the authenticity and genuineness of all the documents in the next two working days.

  • Approval of Application and the Issuance of Certificate

    After the successful verification of all the documents submitted, the regulatory authorities will issue the Certificate of Incorporation to the company. Hence, the said company will be considered as registered under the MSME.

Who has the Authority to Issue MSME Registration Certificate?

The process of obtaining MSME registration is entirely done online, and every state has its own separate department to deal with this. Further, the DIC (District Industries Centre) is responsible for MSME registration. The DIC department also has the power to issue the MSME Registration Certificate along with the MSME Number.

What are the Details be submitted for MSME Registration in the Application Form?

Following are the list of documents and information that you have to provide as per the application form:

  • Aadhar Card Details
  • Owner’s name as per the Aadhar Card
  • Social category- whether the said applicant belongs to the General, OBC, SC or ST category
  • Gender
  • Physical status- whether the concerned applicant is physically disabled or not
  • Name of the enterprise
  • Type of enterprise- select from the provided list.
  • PAN (Permanent Account Number) Card Details
  • Location of the Plant
  • Address of the Plant
  • Incorporation Date of the Entity
  • Previous Registration Details- if in case any
  • Bank details
  • The Activity of Enterprise
  • NIC Code
  • Employment Information- Total Number of Employees working in the organization
  • Investment Details in Plant and Machinery

MSME Registration FAQs

The term “MSME” stands for Micro, Small, and Medium Enterprises. It is defined under the MSMED Act, 2006 based on the investment made in plant and machinery and equipment.

As per the latest amendment announced by the Finance Ministry on 13.05.2020, the definition of the term “MSME” has been modified after the elimination of the difference between the manufacturing and service sector, along with the revision in investment limits and introduction of turnover criteria.

The main reason behind the need to apply for MSME Registration is that it helps the owner to obtain clearances from various governmental bodies.

A Provisional Registration Certificate (PRC) remains valid for a period of 5 years. That means the applicant needs to apply for its renewal, or else PRC will lapse.

No, it is not obligatory and compulsory for an individual to obtain MSME registration in India. However, an MSME Registration will act as a medium to avail of several government benefits, such as subsidies and incentives.

The term “Udyog Aadhar” denotes an Aadhar issued by the MSME Department in the business name. This is issued only to an MSME (Micro, Small, and Medium Enterprises) and is a 12-digits Identification Number.

Usually, MSMEs over regular business entities become the first choice for the banks to grant loans. Further, the interest rates offered on loan for MSMEs by the banks are comparatively lower than those offered for normal business entities. Also, preferential treatment is given to an MSME in case of a delay in repayment.

The original value of a Plant and Machinery is taken into consideration for obtaining MSME registration.

Swarit Advisors provides services related to Micro, Small, and Medium Enterprises registration across all over India. Moreover, we have successfully completed the MSME registration for various clients located in Mumbai, Delhi, Chennai, Gujarat, Bangalore, Uttar Pradesh, Kolkata, etc.

Yes, Aadhar Card is a compulsory requirement for obtaining Udyog Aadhar Scheme Registration in India. Further, if in case the applicant is other than the sole proprietor, then the Aadhar card of the said partner or director will be needed.

No, the MSME sector deals only with the Manufacturing and Service Industries. That means the Trading companies are not included under the domain of MSME. Moreover, the MSME sector supports start-ups by providing them subsidies and benefits, but trading companies are just similar to intermediaries, i.e., a link between the customer and manufacturer. Therefore, they are not covered under the scheme.

Till date, in total, 20 items are being reserved to be manufactured only by the MSME sector.

No, the MSME or the Udyog Aadhar certificate is enough for a single entity regardless of multiple branches or plants. However, it shall be relevant to note that the information concerning all the various branches or plants must be furnished.

The Ministry of MSME notified that Udyog Aadhar is taking a cue from the Prime Minister's radio show named “Man ki Baat” held in September 2015.

The term “NSIC” stands for the National Small Industries Corporation. It is an organisation that arranges raw materials in bulk for small businesses and is also a part of the Ministry of MSME.

The entities eligible to apply as Micro Enterprise are the ones that are having the investment in Plant and Machinery up to Rs 1 crore and Turnover up to Rs 5 crore.

The entities eligible to apply as Small Enterprise are the ones that are having the investment in Plant and Machinery up to Rs 10 crores and Turnover up to Rs 50 crores.

The entities eligible to apply as Medium Enterprise are the one that are having the investment in Plant and Machinery up to Rs 20 crores and Turnover up to Rs 250 crores.

The form used by the MSMEs (Micro Small and Medium Enterprises) to file their half-yearly returns in the context of their outstanding payments, reasons for the delay, etc. is MSME Form- 1.

The term “Credit Rating” denotes an estimate to figure out the ability of an enterprise or an entity to meet all the financial needs on the basis of the previous year dealings. Further, it is not compulsory to obtain a credit rating. However, it is suggested that all the MSME borrowers get their credit rating done as it would assist them in the credit pricing of the loans taken from banks.

Yes, it is mandatory to have an Aadhar Card to obtain MSME Registration in India.

Yes, MSMEs are qualified to obtain Collateral free loans from banks up to Rs 10 Lakhs.

No, Credit Score is not necessary for MSME Registration.

The MSME certificate is provided online, the registered applicant can download it as per his/her requirement from the portal.

The term “MSME” stands for Micro, Small, and Medium Enterprises.

Some of the renowned and prominent examples of MSME Companies are DFM Foods, Ankur Scientific Energy Technologies, Mynd Solutions, SL Packaging, Molecular Connections, Staragiri Warehousing and Collateral Management, Chem Process System, Emmbi Polyarns, and Astha Minmet India.

Yes, a Sole Proprietorship Firm can apply for MSME Registration in India.

The term SSI stands for Small Scale Industries.

Yes, Publishing Books comes under the ambit of the MSME Sector.

The benefits of MSME Registration are Lower Interest Rates, Excise Duty Exemption Schemes, Subsidy Tariffs, Reservation Schemes for the Manufacturing and Service Sector, Opportunity to present in the International Trade Fairs, Tax Subsidy, collateral Free loans from banks, and Reimbursement of ISO Certification.

Yes, both new and existing businesses can apply for MSME or Udyog Aadhar registration in India. However, in the case of existing unit, it should not only be functioning but must also meet the threshold limits for the registration.

Yes, an individual can apply for MSME registration on his/her own. He/she just needs to visit the government’s official portal. However, it is always advised to take assistance from experts as it reduces the scope of mistake.

The Applicant needs to file the Initial Return by the 3rd of May of every financial year. However, the half-yearly return is needed to be filed by the 31st October for the period between April to September, and on 30th April for the period between October to March.

No, an MSME Form-1 cannot be filed with a “Zero” outstanding amount.

There is no difference between them both, and earlier, the MSME Registration was known as the SSI (Small Scale Industries) Registration.

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