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MSME stands for Micro, Small and Medium Enterprises. In a developing country like India, MSME industries are the backbone of the economy. When these industries grow, the economy of the country grows as a whole and flourishes. These industries are also known as small-scale industries or SSI’s. MSME registration helps these industries to obtain the various benefits provided by the government to MSMEs.
Even if the company is in the manufacturing line or the service line, MSME registration for both these industry sectors can be obtained as per the MSME Act. The MSME registration is not yet made mandatory by the Government of India but it is beneficial to get one’s business registered under this because it provides a lot of benefits in terms of taxation, setting up the business, credit facilities, loans etc.
The MSME Act became operational in 2006. It aims to promote, facilitate and develop the competitiveness of micro, small and medium enterprises in India.
Previously the existing MSME classification was based on the criteria of investment in plant and machinery or equipment. So, to enjoy the MSME benefits, the MSMEs have to limit their investment to a lower limit, as mentioned below:
|Existing MSME Classification|
|Manufacturing||Investment||< Rs.25 lakh||< Rs.5 crore||< Rs.10 crore|
|Services||Investment||< Rs.10 lakh||< Rs.2 crore||< Rs.5 crore|
These lower limits were killing the urge to grow as they were unable to scale their businesses further. Also, there had been a long-pending demand for the revision of MSME classification so that they can further expand their operations while continuing to avail the MSME benefits.
Now, under the Aatmanirbhar Bharat Abhiyan (ABA), the government revised the MSME classification by inserting composite criteria of both investment and annual turnover. Also, the distinction between the manufacturing and the services sectors under the MSME definition was removed. The following is the current revised MSME classification, where the investment and annual turnover are to be considered for deciding an MSME.
|Revised MSME Classification|
|Investment & Annual Turnover||< Rs.1 crore & < Rs.5 crore||< Rs.10 crore & < Rs.50 crore||< Rs.50 crore & < Rs.250 crore|
Earlier, the MSME registration covered only manufacturing and service industries. However, in July 2021, the government announced that the wholesale and retail trade will come under the MSME classification and thus can apply for MSME registration of their wholesale/retail trade business except for motor vehicles and motorcycles. Thus, manufacturing and service industries and wholesale and retail trade are covered and eligible to apply for MSME registration.
MSME registration is completely online. MSME online registration is to be done in the government portal of udyamregistration.gov.in. The registration of MSMEs can be done under the following two categories in the portal –
New entrepreneurs and entrepreneurs having EM-II registration need to click the button “For New Entrepreneurs who are not Registered yet as MSME or those with EM-II” shown on the home page for registering MSME. New registration of MSME is done by entering the Aadhaar card number and PAN number.
When clicked on the “For New Entrepreneurs who are not Registered yet as MSME or those with EM-II” button on the homepage of the government portal, it opens the page for registration and asks to enter the Aadhaar number and the name of the entrepreneur. After entering these details, “Validate and Generate OTP Button” is to be clicked. Once, this button is clicked and OTP is received and entered, the PAN Verification page opens.
The entrepreneur must enter the “Type of Organisation” and the PAN Number and click on the “Validate PAN” button. The portal gets the PAN details from the government databases and validates the PAN number of the entrepreneur.
After verification of PAN, the Udyam Registration form will appear and the entrepreneurs need to fill the personal details and details of their enterprise.
Once the details on the MSME registration form are filled, the “Submit and Get Final OTP” button is to be clicked. The MSME online registration process will be completed and a message of successful registration with reference number will appear. Note down the reference number for future use. After verification of MSME registration form, which may take a few days, the Udyam Registration Certificate is issued.
For those already having registration as UAM, they need to click the button “For those having registration as UAM” or “For those already having registration as UAM through Assisted filing” shown on the home page of the government portal. This will open a page where Udyog Aadhaar Number is to be entered and an OTP option should be selected.
The options provided are to obtain OTP on mobile as filled in UAM or obtain OTP on email as filled UAM. After choosing the OTP Options, “Validate and Generate OTP” is to be clicked. After entering OTP, registration details are to be filled on the MSME registration form and Udyam registration will be complete.
The entrepreneurs must fill in the following details on the MSME application form:
Aadhaar Card and PAN Card are the only documents required for MSME registration. MSME registration is fully online and no proof of documents is required. PAN and GST linked details on investment and turnover of enterprises will be taken automatically by the Udyam Registration Portal from the Government databases. The Udyam Registration Portal is fully integrated with Income Tax and GSTIN systems.
GST is not compulsory for enterprises that do not require a GST registration under the GST law. However, the enterprises that need to compulsorily obtain GST registration under the GST regime need to have GST registration for obtaining Udyam Registration.
Those who have UAM registration or any other registration issued by any authority under the Ministry of MSME, will have to re-register themselves in the Udyam Registration Portal by clicking on the “For New Entrepreneurs who are not Registered yet as MSME or those with EM-II”.
The enterprises having UAM registration need to migrate to Udyam Registration by 30/06/2022. If the entrepreneurs having UAM registration do not migrate to Udyam Registration by 30/06/2022, the UAM registration will be invalid and they will not be able to receive the benefits provided to the MSMEs.
The enterprises having UAM registration need to migrate to Udyam Registration by 30/06/2022. If the entrepreneurs having UAM registration did not migrate to Udyam Registration by 30/06/2022, the UAM registration is invalid and they will not be able to receive the benefits provided to the MSMEs. They will have to re-register themselves for Udyam registration to obtain MSME benefits.
After submitting the MSME registration form online, a message of successful registration with a reference number will appear. The Ministry of MSME will issue the Udyam Registration certificate or MSME certificate to the email ID of the entrepreneur after verification of the registration form submitted on the portal.
The Ministry will issue the MSME certificate after a few days from the submission of the registration form. The MSME registration certificate validity is for a lifetime. Thus, it requires no renewal.
To get MSME Certificate Online entrepreneur needs to download the MSME certificate online by visiting the Udyam Registration portal. The process to get the MSME registration certificate online is as follows:
The MSME registration certificate will appear and you can print the MSME registration certificate from the page. An entrepreneur can check the MSME registration number from the reference number given after the submission of the MSME registration form.
For getting the MSME registration number, an entrepreneur needs to click on the ‘Verify Udyam Registration Number’ option under the ‘Print/Verify’ tab on the homepage. A new page will open and the entrepreneurs have to enter the reference number, captcha code and click on ‘Verify’ button. The details of the MSME along with the MSME registration number will appear on the screen.
Helpline number for general queries related to MSME – 011-23063288.
Helpline number for Udyam Registration or Udyam Registration Certificate related for administration queries -011-23063800
Helpline number for Udyam Registration or Udyam Registration Certificate related for Technical queries – 011-23062354
MSME contact address – Ministry of Micro, Small and Medium Enterprises, Udyog Bhawan, Rafi Marg, New Delhi – 110011.
MSME web information manager address – Ministry of Micro, Small and Medium Enterprises, Room No 468 C, Udyog Bhawan, Rafi Marg, New Delhi – 110011. E-mail : email@example.com
Yes, MSME registration, i.e. Udyog Aadhaar Registration has been replaced with Udyam Registration. If any micro, small and medium industries want to start any business, they can obtain the MSME/Udyam Registration. The MSME/Udyam registration is completely online. This registration provides the business with a lot of benefits and subsidies.
No. The enterprises that come under the MSME category need not mandatorily apply for MSME registration. However, it is better to obtain MSME/Udyam registration as the government provides a lot of benefits in terms of loan facilities, easy access to credit, low-interest rates, eligibility to many schemes, etc., to the enterprises that have MSME registration.
Yes. For obtaining Udyam registration, an Aadhaar card is compulsory. In case an applicant is other than the proprietor, the Aadhaar card of the partner and the director will be required.
Yes, an existing and new business can apply for MSME/Udyam Registration, provided the existing unit is functioning and meets the threshold limits for registration. Enterprises having a UAM Registration need to be re-registered for Udyam registration to avail the benefits provided for the MSMEs.
There is no expiry of the Udyam Registration Certificate. As long as the entity is ethical and financially healthy there will be no expiry of the certificate.
Yes. Earlier, the MSME registration covered only manufacturing and service industries. Trading companies are not covered by the scheme. However, in July 2021, the government announced that the wholesale and retail trade will come under the MSME classification and thus can apply for MSME registration of their wholesale/retail business. The Ministry of Micro, Small and Medium Enterprises decided to include retail and wholesale trade under MSMEs for the purpose of priority sector lending.
No. The MSME/Udyam Registration Certificate is for a single entity irrespective of multiple branches or plants. However, information about multiple branches or plants must be furnished.
In the case of a company, its authorised signatory should provide the PAN and Aadhaar number while filling the MSME registration.
The Aadhaar number and PAN number of the proprietor is to be entered in the case of a proprietorship firm. In the case of a partnership firm, the managing partner of the firm should provide the PAN and Aadhaar number. The enterprise details on the MSME registration form will be the details of the partnership firm and the details of the entrepreneur will be the details of the managing partner in case of a partnership firm.
When the enterprises are different, i.e. established under different names and registered or incorporated separately, then the proprietor of the enterprise can apply for MSME registration. However, an enterprise cannot file for more than one Udyam Registration. All the activities including manufacturing or service should be specified or added in one Udyam Registration. An entrepreneur can add additional activities in the Udyam Registration by clicking on the ‘Update Details’ option on the homepage.
No. The criteria to apply for Udyam registration depends on the annual turnover of the services provided. Since the annual business value or turnover of the builder is more than Rs.250 crore, the builder cannot apply for MSME registration as the annual turnover of an enterprise must be less than Rs.250 to apply for medium enterprise registration.
MSME registration can be obtained by the following entities that fulfil the revised MSME classification criteria of annual turnover and investment:
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