Everything You Need to Know About MSME Registration

Planning to unlock the full potential of your business? Get your MSME registration done. MSME stands for micro, small, and medium enterprises. On October 2, 2006, the MSME registration began operating. It was created to help micro, small, and medium-sized enterprises (MSMEs) become more competitive by promoting, facilitating, and developing their competitiveness.

In India, this is one of the most favourable times to start a business. As a developing country, these small businesses are the spine of India and with so many new passionate business owners it’s important to tackle the information about the MSME registration process correctly.

It doesn’t matter if you have a service-based business or a product-based business as the MSME registration process for both of these can be done through the MSME Act.

Although the government has not made this MSME registration necessary, it is preferable to have one's business registered under it since it gives several benefits as regards taxation, business setup, credit facilities, and financing.

• Relevance of MSME Registration

The Government of India's Ministry of MSMEs acknowledges the contribution of micro, small, and medium companies to the country's economic progress.  It does so by providing a variety of subsidies and perks. MSME registration is essential to obtain these benefits and establish a seamless authorisation route.

• Documents Required for MSME Registration Process

The only papers required for the MSME registration process are an Aadhaar Card and a PAN Card. MSME registration is completely online, with no verification of paperwork necessary. The Udyam Registration Portal would automatically pull PAN- and GST-linked information on investment and turnover from government databases. The Income Tax and GSTIN systems are completely linked with the Udyam Registration Portal.

GST is optional for businesses that are not required to register under the GST law. However, businesses that are required to get GST registration under the GST regime must first obtain GST registration before applying for Udyam Registration.

MSME Registration Process

MSME registration process is done using the udyamregistration.gov.in government portal.

MSMEs can register on the site under one of the following two categories:

1. For new entrepreneurs who are not registered yet as MSME or those with EM-II

For new entrepreneurs who are not registered yet as MSME in the MSME registration process or those with EM-II, there is a separate option on the Home Page, which has to be clicked.

After clicking on it, write the name of the entrepreneur, Aadhar card number, and PAN number to move forward in the process. The Aadhar card number and PAN number are verified by generating OTP for the same.

After verification is complete for PAN, the Udyam Registration window will appear and the entrepreneurs need to fill in the personal details and details of their company.

Once you've filled out all of the information, submit the OTP you'll get in your inbox to double-check. The MSME has been successfully registered, and a notification with a reference number will display. The Udyam Registration Certificate is issued when the registration is verified, which may take a few days.

2. For those with UAM in MSME Registration Process and for those already having registration as UAM through assisted filing

Those who have previously registered as UAM must click the respective option on the government portal's home page. This will take you to a screen where you can input your Udyog Aadhaar number and choose an OTP option.

The alternatives are to get an OTP on your phone as a filled-in UAM or to get an OTP through email as a filled-in UAM. After selecting the OTP options, click "Validate and Generate OTP."

After entering the OTP, fill in the registration data, and your Udyam registration will be complete.

Benefits of MSME Registration

There are many benefits of MSME Registration for a business, and these include the following:

1. Bank loans have become cheaper as a result of MSME registration since the interest rate is relatively low, approximately 1% to 1.5%. Interest rates are far lower than those charged on traditional loans.
2. For unpaid MSME payments, there is a One-Time Settlement Fee.
3. The Udyam Registration Portal is connected with the Government e-Marketplace and many other State Government websites that provide simple access to their marketplaces and e-tenders, MSME registration makes it easier to get government tenders.
4. Once registered, the cost of obtaining a patent or establishing an enterprise is reduced due to the numerous discounts and concessions available.
5. It also enabled minimum alternative tax (MAT) credits to be carried forward for up to 15 years rather than the previous 10 years.
6. MSMEs that are registered and have an MSME Certificate are eligible for tax exemption.
7. MSMEs that are registered with the Ministry of MSMEs receive precedence when applying for licenses and certifications from the Indian government.
8. A registered MSME is eligible for numerous discounts and concessions on patents and startup expenses.
9. MSMEs can readily obtain credit for their enterprises if they are registered.

Other Details Required for MSME Registration Process

After understanding how to register a business for MSME, here are some other details required for the MSME registration process.

• Bank Account Number
• Address proof of the business
• Receipts and invoices for equipment or machinery purchases
• Copy of the sales and purchase bill book
• Employee data if applicable
• Number of Employees
• The commencement date for Business
• IFSC Code
• NIC Code
• Copy of the resolution passed in a general meeting of the company
• Copy of board resolution with authorisation from a director to sign and apply for the MSME application.
• Details of partnership in case of a partnership firm
• GSTIN certificate
• Unregistered Partnership firm: Partnership deed
• Registered Partnership firm: Registration certificate
• Memorandum of Association (MoA)
• Articles of Association (ADA)
• Certificate of Incorporation

MSME schemes launched by the Government are:

After getting acquainted with MSME registration benefits, here are some government schemes launched by MSME:

• Development of Khadi, Village, and Coir Industries:
• Science and Technology Scheme
• Market Promotion & Development Scheme (MPDA)
• Revamped Scheme Of Fund for Regeneration Of Traditional Industries (SFURTI)
• Coir Vikas Yojana (CVY)
• Entrepreneurship and skill Development Programme:
• Entrepreneurship Skill Development Programme (ESDP)
• Assistance to Training Institutions (ATI)
• Technology Upgradation and Quality Certification:
• Financial Support to MSMEs in ZED Certification Scheme
• A Scheme for Promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE)
• Prime Minister Employment Generation Programme and Other Credit Support Schemes:
• Prime Minister Employment Generation Programme(PMEGP)
• Credit Guarantee Trust Fund for Micro & Small Enterprises (CGTMSE)
• Interest Subsidy Eligibility Certificate (ISEC)
• Marketing Promotion Schemes:
• International Cooperation
• Marketing Assistance Scheme
• Procurement and Marketing Support Scheme (P&MS)
• Scheme of Surveys, Studies, and Policy Research
• Scheme of Information, Education, and Communication
• Micro & Small Enterprises Cluster Development (MSE-CDP)
• National SC-ST-HUB

To Sum Up

These days, everything out of the ordinary is fashionable. Furthermore, the lack of any established pattern makes us ponder how adaptable a single notion could be. This is also true of the entrepreneurial spirit. Things are becoming more organised and advanced with the influx of Indian youth who are more inclined toward startups and the establishment of MSMEs since 2001.

India, being a young country, is undergoing significant transformations. The government, too, is no longer hesitant to introduce advantageous initiatives to help MSMEs survive and thrive.

The Ministry of MSME is also working hard to encourage MSM enterprises that are involved in the manufacture, production, processing, or preservation of goods to realise that starting a business doesn't have to cost an arm and a leg.

We hope that the information in this article will be useful to those who want to work for themselves or have company ideas but are unsure how to get started or fund their ventures. At the very least, registering your business might be a solid first step toward realising your ideas.

Also Read:

1) Top 10 Proven Tips To Increase Profit Margins for Your Business
2) Tips to Secure Business Loan While Having Bad Credit
3) Tips To Get Your Business Ready For Seasonal Sales
4) Colour Psychology: How Colours Can Influence Branding and Marketing?

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FAQs

Q. What is an MSME certificate?

Ans. Applicants receive an MSME certificate after successfully completing the MSME registration process. This acts as proof of registration. It is also a legitimate document that may be used to apply for any programs, concessions, or authorisations. If a single applicant wishes to register several MSMEs, they must complete a separate application for each one. A unique MSME certificate is provided for each of these.

Q. What is the validity of an MSME certificate?

Ans. After the MSME Registration Process, you get the MSME certificate that is valid for as long as the company is open for business. Furthermore, it is valid for the rest of one's life as long as the classification requirements are satisfied.

Q. What is Udyog Adhar?

Ans. Udyog Aadhar refers to a 12-digit number that MSMEs can obtain by enrolling on the Udyog Aadhaar platform. The Udyog Aadhar number registration is a requirement for the MSME registration process.

Q. Are existing firms eligible to apply for MSME registration?

Ans. Yes, existing firms are eligible to apply for the MSME registration process. However, the categorisation criteria will take into account their current activities, including investment and yearly turnover.

Q. Is it necessary to have multiple registrations for plants in different cities?

Ans. No, several branches, factories, or industrial units can be grouped together under a single MSME registration process. Given that each of them has an investment and turnover that falls within the categorisation requirements. The registration is valid across the country, with no restrictions imposed by the state government.