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MSME Registration

Empower your business with instant MSME registration and exclusive benefits

Within 10 working days

MSME stands for Micro, Small and Medium Enterprises. A country’s actual economic growth is not just dependent on its large scale industries and multi- national organizations but also on its medium level industries and most importantly on its small scale businesses.

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MSME Registration

Overview

Importance of Registration

Registration Procedure

Documents Required

MSME Registration

MSME stands for Micro, Small and Medium Enterprises. A country’s actual economic growth is not just dependent on its large scale industries and multi- national organizations but also on its medium level industries and most importantly on its small scale businesses. 


The Ministry of Micro Small and Medium Enterprises has provided a suitable name for Small Scale Business operations in India as Micro, Small and Medium Enterprises (MSME). 


The Provisions related to MSME are provided in The Micro, Small and Medium Enterprises Development  Act, 2006.

Entities which are eligible for Registration as MSME :

Any type of Entity like Proprietorship Firm, Partnership Firm, Association of Persons, HUF, Company, LLP and any other Business entity can Register as MSME.

Sectors of Business that can be registered as MSME :

MSME covers only manufacturing and service industries. Trading companies are not covered by the scheme. 


The MSME model is introduced  to support new business ideas by providing them with  subsidies and benefits. Trading companies are considered to act  just  as middlemen, that  provides a link between the manufacturer and  the customer and hence not covered under the scheme.

Criteria for Consideration as Micro, Small or Medium Enterprise:

Section 7 of “MSMED Act” classifies the enterprises into micro, small and medium enterprises.
i) In the case of  the manufacturing sector,
classification has been done on the basis of investment in plant and machinery 
and
ii) in the case of the service sector, 
classification has been done on the basis of investment in equipments.

Overview

Importance of Registration

Registration Procedure

Documents Required

Benefits of MSME Registration

  • Bank Loans without any collateral security

The Government of India has made collateral-free credit facilities available for all small and micro business sectors. This initiative guarantees funds to micro and small sector enterprises. Under this scheme, both the old as well as the new enterprises can claim the benefits.

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  • 50% Subsidy on Patent/Trademark Registration

50% subsidy in payment of fee in case of patent registration or trademark registration has been given to the enterprises that has the certificate of registration as MSME.

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  • ​Exemption of Interest Rate charged on Overdraft Limit

Businesses or enterprises registered under MSME can avail a benefit of up to 1% on the overdraft as mentioned in the  scheme that differs from bank to bank.

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  • Protection against Delayed Payments

The Micro, Small and Medium Enterprises Development Act, 2006 provides for the provisions to deal with the problem of delayed payment, whereby any buyer who fails to make payment to MSME supplier, as per agreed terms or within a maximum period of 45 days,  would be liable to pay interest to MSME supplier.

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 In addition to this the Government of India has launched an online SAMADHAN portal (samadhan.msme.gov.in) on October 30, 2017 to enable micro and small enterprises to directly register their cases relating to delayed payments, online , on the portal.

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  • Full Reimbursement for ISO Certification Charges

The registered MSME enterprises can claim the full reimbursement of the expenses that were spent for the ISO certification.

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MSME enterprises are the backbone of any economy and are an engine of economic growth, promoting equitable development for all. Therefore, to support and promote MSMEs, the Government of India through various subsidies, schemes and incentives promote MSMEs through the MSMED Act. To avail the benefits under the MSMED Act from Central or State Government and the Banking Sector, MSME Registration is required.

Udyog Aadhar Registration Benefits

  • Once you are registered under the MSME, you become eligible for  most of the government scheme regarding the fundings  like

a) Without Guarantee Loan
b) Easy Loan
c) Low Interest Rate Loan

  • Financial support from the government to participate in the foreign expo

  • Credit prescription (Priority sector lending)

  •  Government subsidies

  • Differential rates of interest etc

  • Excise Exemption Scheme

  • Exemption under Direct Tax Laws.

MSME Registration is Optional

MSME Registration is optional under the MSMED Act, but it opens the door to governmental schemes, tax and banking benefits, subsidies and schemes.

Overview

Importance of Registration

Registration Procedure

Documents Required

Registration Procedure

MSME registration has now been replaced with the Udyam Registration. 

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MSME registration is to be done in the government portal of udyamregistration.gov.in. 

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The registration of MSMEs can be done under the following two categories in the portal –

i)  for new entrepreneurs who are not registered yet as MSME and 

ii) for those having registration as EM-II or UAM and for those having registration as EM-II or UAM through Assisted filing. 

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This registration with MSME/Udyam Registration is completely online.

Overview

Importance of Registration

Registration Procedure

Documents Required

Documents Required

Listed below are the documents required for the registration process.

  • Pan card copy of all directors/partners/proprietor

  • Company pan card copy of private limited / llp / partnership firm

  • Rental agreement

  • Bank statement or cancelled cheque

  • Aadhar card copy of all directors/partners/proprietor

  • Photo copy of all directors/partners/proprietor

  • Employees details

  • Entrepreneur social category (gm, sc, st, obc)

  • Investment in plant and machinery (Rs in lakhs)

  • Number of employees.

FAQ

What is MSME Registration?

MSME Registration is a process that allows businesses to be officially recognized as a Micro, Small, or Medium Enterprise (MSME) by the Government of India. This registration helps businesses avail benefits such as government schemes, easier access to finance, and subsidies.

Is MSME Registration mandatory?

MSME registration is not mandatory for all businesses, but it is highly recommended to avail the benefits provided by the government. In certain cases, businesses may need to register to participate in government tenders or get financial support from banks.

How long does it take to complete MSME Registration?

MSME registration is usually completed in a few hours or within 1–2 days, as it is a self-declaration process. However, if any additional documents are required, it may take a little longer.

Who can apply for MSME Registration?

Any individual or business entity engaged in manufacturing, production, processing, or preservation of goods or providing services can apply for MSME registration. It applies to:

  • Micro Enterprises: Businesses with an investment of up to Rs. 1 crore in plant and machinery (for manufacturing) or up to Rs. 50 lakh in equipment (for services).

  • Small Enterprises: Businesses with an investment of up to Rs. 10 crore in plant and machinery (for manufacturing) or up to Rs. 5 crore in equipment (for services).

  • Medium Enterprises: Businesses with an investment of up to Rs. 50 crore in plant and machinery (for manufacturing) or up to Rs. 20 crore in equipment (for services).

What are the benefits of MSME Registration?

MSME registration offers various advantages, including:

  • Access to Government Schemes: Benefits under various schemes such as credit guarantee, subsidies, and support for technology upgrades.

  • Subsidized Loans: Easier access to loans at lower interest rates from banks and financial institutions.

  • Tax Benefits: Income tax exemptions and reduced GST rates for MSMEs.

  • Market Support: Priority in government procurement and support for exporting goods and services.

  • Protection Against Delayed Payments: Legal protection under the MSME Development Act for delayed payments from buyers.

  • Attract Investors: Increased credibility and chances of attracting investors and funding.

What is the process for MSME Registration?

The MSME registration process is as follows:

  • Application on Udyam Portal: Visit the official Udyam Registration Portal and fill out the application form with necessary details.

  • Enter Business Details: Provide details of the business such as name, type, address, PAN, bank details, and investment in plant and machinery.

  • Document Submission: Submit necessary documents, including the business’s PAN card, Aadhaar card, and bank account details.

  • Self-Declaration: The registration process is self-declared, and there is no requirement for any third-party verification.

  • Udyam Registration Certificate: Once the application is processed, the business will receive a Udyam Registration Certificate.

What documents are required for MSME Registration?

The following documents are required:

  • Aadhaar Card: Aadhaar number of the business owner (or authorized signatory).

  • PAN Card: PAN card of the business entity.

  • Bank Account Details: The business’s bank account details, including the IFSC code.

  • Business Address Proof: Proof of business location such as utility bills, rent agreements, etc.

  • Investment Details: Information about the investment in plant, machinery, or equipment.

Do I need to pay any fee for MSME Registration?

No, MSME registration is free of cost. There are no charges or fees involved for applying and obtaining MSME registration through the Udyam portal.

What is the Udyam Registration Portal?

The Udyam Registration Portal is the official online platform provided by the Ministry of MSME for registering micro, small, and medium enterprises. It is the only platform for MSME registration in India as of now, replacing the previous systems like Udyog Aadhaar.

Is MSME Registration the same as Udyog Aadhaar Registration?

No, MSME registration is now done through the Udyam Registration Portal, whereas the previous system was called Udyog Aadhaar. Udyog Aadhaar registration was replaced by Udyam registration as of July 2020. Businesses previously registered under Udyog Aadhaar need to re-register under Udyam.

Can a company or LLP apply for MSME Registration?

Yes, companies, LLPs, and other legal entities, as well as individuals, can apply for MSME registration if they meet the eligibility criteria based on investment in plant, machinery, or equipment.

Can MSME Registration be updated or modified?

Yes, MSME registration can be updated. If there are any changes in the business details such as investment or address, businesses can modify their information on the Udyam portal.

What is the difference between Micro, Small, and Medium Enterprises?

  • Micro Enterprises: Investment up to Rs. 1 crore in plant and machinery (for manufacturing) or Rs. 50 lakh in equipment (for services).

  • Small Enterprises: Investment up to Rs. 10 crore in plant and machinery (for manufacturing) or Rs. 5 crore in equipment (for services).

  • Medium Enterprises: Investment up to Rs. 50 crore in plant and machinery (for manufacturing) or Rs. 20 crore in equipment (for services).

Can an MSME avail subsidies and government schemes?

Yes, MSMEs are eligible to avail various government schemes, including:

  • Credit Guarantee Scheme: To provide collateral-free loans to MSMEs.

  • Technology Upgradation Scheme: Financial assistance for upgrading technology in MSMEs.

  • Procurement Schemes: Priority in government procurement for MSMEs.

  • Capacity Building: Financial and training support for capacity building.

Is there any income tax benefit for MSMEs?

Yes, MSMEs can avail of certain income tax exemptions, including:

  • Lower Tax Rate: MSMEs with an annual turnover of up to Rs. 5 crore can benefit from a reduced corporate tax rate.

  • Section 80-IA Deduction: MSMEs can avail of deductions under Section 80-IA for profits derived from industrial undertakings.

  • GST Benefits: MSMEs are also eligible for GST exemptions or lower GST rates on specific goods and services.

Can MSMEs get government contracts?

Yes, MSMEs have special privileges in government procurement. Government tenders are often reserved for MSMEs, and they receive price preference when bidding for government contracts.

What is the validity of MSME Registration?

MSME registration is valid for a lifetime, as it does not need to be renewed. However, the details of the business should be updated if there are any changes to the investment or other information.

How can MSMEs get financial support?

MSMEs can avail financial support through various schemes like the Pradhan Mantri Mudra Yojana (PMMY) for working capital, CGTMSE for collateral-free loans, and other government schemes specifically targeted at MSME growth and expansion.

What are the disadvantages of not having MSME Registration?

Without MSME registration, businesses may miss out on:
Government schemes and financial assistance.

  • Easier access to bank loans at favorable rates.

  • Price preference in government tenders.

  • Protection against delayed payments under the MSME Development Act.

Can MSME Registration help in accessing international markets?

Yes, MSMEs that are registered can receive assistance for export promotion and participation in international trade fairs, helping them access global markets more easily.

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