Overview of MSME Registration

MSME is an abbreviation for Micro, Small, and Medium Enterprises, governed under the Ministry of Micro, Small, and Medium Enterprises by the Micro, Small and Medium Enterprises Development Act (MSMED Act) of 2006. The legislature enacted the Act to address the issues related to the MSME Sector. In this Sector, the industries are divided based on turnover. The Micro Enterprises have a turnover of not more than Rs. 5 crores; the Small Enterprises have a turnover of not more than Rs. Fifty crores and Medium Enterprises have a turnover of less than Rs. 250 crores. These enterprises operate with limited capital and on a smaller scale. As this Sector is labour-intensive and significantly contributes to our country's economy, the Government focuses on its growth. 

There are more institutions, apart from the Ministry of Micro, Small and Medium Enterprises, that deal with the development of the MSME Sector: The Khadi and Village Industries (KVI) Commission, Coir Board, and National Small Industries Corporation Limited (NSIC).

In India, Udyam Registration is done for MSME Registration and is a must for all MSMEs before establishing and starting their Business. The Ministry of Micro, Small, and Medium Enterprises grants the Udyam Registration. Earlier, this Registration was done by UAM and EM II systems, but the Udyam Registration has replaced both of them.

Enterprises Covered

MSME is an abbreviation for Micro, Small, and Medium Enterprises, governed under the Ministry of Micro, Small, and Medium Enterprises by the Micro, Small and Medium Enterprises Development Act (MSMED Act) of 2006. The legislature enacted the Act to address the issues related to the MSME Sector. In this Sector, the industries are divided based on turnover. The Micro Enterprises have a turnover of not more than Rs. 5 crores; the Small Enterprises have a turnover of not more than Rs. Fifty crores and Medium Enterprises have a turnover of less than Rs. 250 crores. These enterprises operate with limited capital and on a smaller scale. As this Sector is labour-intensive and significantly contributes to our country's economy, the Government focuses on its growth. 

There are more institutions, apart from the Ministry of Micro, Small and Medium Enterprises, that deal with the development of the MSME Sector: The Khadi and Village Industries (KVI) Commission, Coir Board, and National Small Industries Corporation Limited (NSIC).

In India, Udyam Registration is done for MSME Registration and is a must for all MSMEs before establishing and starting their Business. The Ministry of Micro, Small, and Medium Enterprises grants the Udyam Registration. Earlier, this Registration was done by UAM and EM II systems, but the Udyam Registration has replaced both of them.

Benefits of MSME Registration

One must go for this registration to avail of the benefits of all the government schemes. However, there are more benefits of it, as stated below:

• Bank Loans:

For MSMEs, bank loans are easily accessible, and it becomes even easier when they are registered under the MSMEs, i.e., Ministry of Micro, Small and Medium Enterprises.

• Low rate of interest:

The Government, as well as many financial institutions and banks, have made schemes for the MSME sector, and they provide loans to these enterprises at very low interest rates.

• Tax exemptions:

The Government has exempted the MSME Sector from paying different taxes in its schemes.

• MAT:

Minimum Alternative Tax, MAT can be carried forward by this Sector for 15 years, i.e., five more years than from other sectors or businesses.

• Collateral-free loans:

MSME/Udyam Registration helps them to get collateral-free loans from banks as the Government has made schemes where banks can grant loans to MSMEs for less than Rs. 10 lakhs without asking for any collateral.  

• Patent fee relaxation:

Registered MSMEs have a relaxation in the government fee for the patent registration as per the Government schemes.

• Support schemes:

The Government creates multiple schemes to provide financial support to the MSME Sector.

• Secure tenders:

The registered MSMEs have been given the benefit that they will be notified about the tenders and have access to Government tenders, making it easier for them to secure any tender.

• Growing opportunities:

Registered MSMEs will be recognized by an individual who is looking for any opportunity as they provide diverse opportunities for young generations.

• Quota in tender allotment:

Specific quotas are reserved for the MSMEs to secure government tenders in their tender allotment.

• No payment delay:

The Government has made specific time-bound rules for the buyer of the MSME's products/services, as they have to make payment within 45 days of their purchase from the date of delivery.

• Easy loan:

There is a government scheme where registered MSMEs can get loans of up to 5 crores within 59 minutes. 

• ISO Certified:

The registered MSMEs even get benefits in getting ISO Certification through reimbursements.

Eligibility Criteria

The following entities or enterprises are eligible to apply for MSME Registration:

• Sole Proprietor

Any entity handled and managed by an individual can apply for this registration.

• Partnership

An entity where two persons agree to share the business profits is known as a Partnership and is eligible to apply for MSME or Udyam Registration.

• LLP

LLP is an abbreviation for Limited Liability Partnership, which is dealt with and governed by the Limited Liability Partnership Act, 2008. It is also eligible for this registration.

• Producer Company

An entity or company engaged in businesses like producing agricultural produce is known as a Producer Company under Section 465(1) of the Companies Act. Producer Companies are also eligible under this heading.

• Private Company

A Private Company or Private Limited Company is registered under the Companies Act of 2013. A Private Company is also required to register if engaged in Business related to the MSME sector.

• HUF

Any Hindu Undivided Family, HUF, with its Karta as manager engaged in Business related to the MSME sector, must register with the Ministry of MSME.

• One Person Company

An entity registered as One Person Company doing Business related to the MSME sector must get MSME or Udyam Registration.

• Co-operative Society

Any entity registered under the Co-operative Societies Act and engaged in such businesses must apply for such registration.

Self Help Groups and Trusts are also eligible to register as MSMEs.

Documents Required

The following are the required documents for MSME Registration:

• Information of all the members of the Enterprise, including contact details
• PAN Card and Aadhar Card of all members of the Enterprise
• Goods and Services Tax Identification Number (GSTIN)
• Ownership proof
• Utility bills
• All documents related to property
• MOA
• AOA
• Details of the board meeting
• Details of resolutions taken by shareholders
• No Objection Certificates
• Details of every capital goods
• Details of every raw material
• Copy of bills of all capital goods and raw materials purchased
• Copy of bills of all the products sold
• In the case of a Partnership or LLP, a copy of the Partnership Deed
• Required permits or licenses
• An affidavit attested and notarised by a judicial officer on Rs. 10 Non-Judicial Stamp Paper
• Bills of installed machinery
• Information on Bank Account

Procedure

MSME Registration must be done under the Ministry of Micro, Small, and Medium Enterprises as the Udyam Registration. Each entity should not apply for more than one Udyam Registration. Those with EM Part II or UAM shall also apply for Udyam Registration. Here is the procedure for this registration:

• Filling the Application Form

The Procedure of MSME or Udyam Registration starts with filling out the application form in detail. It can be done online or offline.

• Documentation

The required documents are prepared once the application form is filled with complete details. All the documentation is related to the information filled in the form.

• Submission of Application

The documentation is submitted for the application of the registration. After successfully submitting all the documents, the relevant authority verifies them with the supplication form.

• Registration and issue of Certificate

Once the verification is done, the application with all the required documents is accepted, and the MSME or Udyam Registration is done. The authority issues the Certificate of MSME/ Udyam Registration to the applicant.

Why Adviso

We have a team of qualified and experienced lawyers, CAs, and CSs who personally deal with your queries and help you obtain the required MSME Registration within the time very smoothly. We ensure the highest customer satisfaction for all our clients in Pan India.

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