MSME stands for Micro, Small, and Medium Enterprises. In accordance with the
Micro, Small, and Medium Enterprises Development (MSMED) Act in 2006, the
enterprises are classified into two divisions.
Engaged in the manufacturing or production of goods in any industry
engaged in providing or rendering services
On 1st June 2020 Union Cabinet officially revised the MSME definition. The recent changes in the definition of micro, small, and medium-sized enterprises made as a part of the Atmanirbhar Bharat Abhiyaan relief package were approved. The investment and turnover figures were changed to larger values, thereby resulting in a larger number of medium-sized enterprises.
|Type of Enterprise||Investment (Rs.)||Turn Over (Rs.)|
|Micro Enterprises||Rs. 1 Crore||Rs. 5 Crore|
|Small Enterprises||Rs. 10 Crore||Rs. 50 Crore|
|Medium Enterprises||Rs. 50 Crore||Rs. 250 Crore|
Any company having an MSME License Registration can obtain loans from banks at a comparatively cheaper rate, approximately 1- 1.5 percent, which is much lower than the normal bank rates.
MSMEs enjoy several tax rebates and exemptions.
MSMEs are allowed to carry forward the credit for MAT (Minimum Alternate Tax) for 15 years, which in the general case is ten years.
There are several tenders available only for the industries having MSME registration
MSME receives quick credit facilities from various Financial Entities.
Industries having registration in MSME Act are given higher preference in comparison to normal industries.
Companies or the industries having an MSME Certificate have better growth opportunities as they get directly enter in major national and international trade fairs and also have better opportunities to present themselves to the world.
MSMEs can 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.
Aadhaar Card is mandatory to Register for MSME
Step 1 : Visit the Website https://udyogaadhaar.gov.in/
Step 2: Enter your 12 Digit Aadhaar Card Number
Step 3: Fill the Name of Entrepreneur
Step 4: Click on Validate and Generate OTP
Step 6: Enter OTP Received
Step 7: After Completing verification Fill online Registration Form
i) Name of the Business Owner
ii) Category of the Applicant- Such as: General, SC, ST, OBC, Others.
iii) Income Tax Permanent Account Number (PAN)
iv) Postal address of business district, PIN, state, email address and mobile number
v) Previous Registration Details of the business.
vi) The commencement date of the business.
vii) Bank Account Details along with the IFSC Code.
viii) The type of Organisation-whether it is "Services" or "Manufacturing".
ix) Total Number of Employed Workers.
x) Total capital (In lakhs) invested in business/enterprise.
xi) Annual Turnover of the business.
xii) National Industrial Classification (NIC) Code.
xiii) Details of the District Industries Centre (DIC)
Step 8: Click on the submit button to generate OTP which will be sent to the e-mail id
Step 9: Enter the Aadhar OTP received on mobile for the 2nd time
Step 10. Click on the option "Final Submit"
After Completion of the above process an acknowledgment will be sent to your number through e-mail once the registration process is complete.
After verifying all the details, the UAM Number is generated for the business. These UAM numbers can be used to avail benefits for the MSMEs
- PAN Card Details of the proprietor or all the directors or all the partners
- Aadhaar Card Details of the proprietor, directors, and partners
- Proof of ownership of the place being used as a Registered Office such as the Allotment Letter or Lease Agreement or Possession Letter or 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 the raw materials purchased
- Copy of Sale Bill all the products
-In case of a Partnership firm :Copy of partnership deed
- For Private Limited Company : Copy of MOA and AOA along with the Certificate of Incorporation attached with a Resolution of Board of Directors authorizing the director to sign the application.
- As per the Industrial Development Regulation Act, 1951 : A copy of Industrial License
- An affidavit on Rs. 10/-Non-Judicial Stamp Paper duly attested by the Notary Officer declaring Status of the Machinery Installed and the power required etc.
- Purchase bill of the machinery installed in the enterprise
- Bills related to the Purchase and Installation of plant and machinery
- Bank Account Statement
It is mandatory for MSME engaged in the manufacture or production of goods to register under the Act. By taking into consideration the benefits that are available under the Act, it is usually suggested that every enterprise whether it is minor, medium, or small must opt for registration.
MSME Registration for micro and small enterprises (both manufacturing and rendering of services) or medium enterprises that are engaged in providing services is Optional but it is important to get benefits.
1. Provisional MSME Registration
This is the first stage of getting MSME Registration. This is at the stage of pre-investment or before starting business. at that time the Enterprise qualifies for:
- To obtain facilities for land, accommodation etc.
- Obtaining necessary approvals and the NOCs.
- To obtain clearances from regulatory bodies such as the Pollution Control Board and the Labour Regulations.
- The provisional SSI Registration certificate (PRC) that enables small units to obtain term loans and working capital from the financial institutions and banks under the priority sector lending.
2. Permanent MSME Registration
The second type of MSME License Registration is permanent. It is provided to the industrial units that are already functioning.
It is mandatory to have Aadhaar Card to apply for MSME license. In any case the applicant does not have an Aadhaar card, the UAM registration shall be done by the respective DIC or MSME-DE for the business or enterprise. In the meantime the individual can also provide the documents mentioned below as an alternative for identification.
- Enrollment copy of Aadhar card
- Request copy of Aadhar Enrollment
- Any of the following: Voter Id, Passport, PAN Card, Driving License, Employee ID and Bank Passbook.
1. Udhyog Aadhaar Memorandum
2. Zero Defect Zero Effect
3. Quality Management Standards and Quality Technology Tools
4. Grievance Monitoring System
6. Credit Linked capital subsidy Scheme
7. Women Entrepreneurship
MSME License Registration is entirely an online process. Separate Departments
have been set up in different states to deal with this. Also the District
Industries Centre or DIC is responsible for MSME License Registration. The DIC
Department also has the authority to issue the MSME Registration Certificate
along with the MSME Number.