MSME Registration


What are the Essentials of MSME Registration?

calendar15 Apr, 2021
timeReading Time: 4 Minutes
Essentials of MSME Registration

MSME- Micro, Small & Medium enterprises is the major reason behind the economic growth in many developing countries in the world. It is also rightly named as “the engine of growth” in India as MSME has played an important role in the development and growth of the country in many ways.

The Indian government came up with the Micro, Small and Medium Enterprises Development Act or MSMED in the year 2006.With the MSME registration, there are numerous advantages that the Government of India is providing so as to encourage the entrepreneurs to start up with the business. Thus, in this article we will know more about the Essentials of MSME Registration.

What is MSME Registration?

The MSME Ministry is functioning strong to support and promote all the smaller enterprises to start up with the production and manufacturing sectors, and also in the category of process and preservation of goods to motivate the entrepreneurs and to make them realize that they don’t have to spend a heavy amount to start their business.

Also, the Government keeps on coming with different schemes and subsidies once the entrepreneur has registered their business under MSME, so that they can avail such benefit and continue to keep running their business without any problem.

MSME has a major and important role in generating employment at relatively low capital cost and at the same time it has helped to industrialize the backward and rural areas. Therefore, registering under this vibrant sector of MSME has reduced the regional imbalance and thus, in so doing it has assured equitable distribution of the wealth and national income.

Read our article:Procedure to Avail MSME Registration Certificate in India

What is the MSME Classification?

The earlier MSME classification was on the basis of the criteria of investment in the plant and machinery or equipment. Besides there was a pending demand for revising the MSME classification further for the purpose to expand their operation while at the same time to continue with availing the MSME benefits.

Now, the government has revised the MSME classification under the Aatmanirbhar Bharat Abhiyan (ABA), by adding up the combined criterion for both the investment and annual turnover. Furthermore, the difference between the services and manufacturing sectors under the MSME definition has now been removed.

Because of this removal it will result in creating uniformity between these sectors. The revised MSME classification where the annual turnover and investment both are to be considered while deciding an MSME is given below:-

Revised MSME Classification





Investment & Annual Turnover

< Rs.1 crore & < Rs.5 crore

< Rs.10 crore & < Rs.50 crore

< Rs.50 crore & < Rs.250 crore

What are the Types of MSME Registration?

There are two types of MSME Registration as given below:

Types of MSME Registration

Provisional MSME Registration

It is approved to a unit at the stage in the pre-investment period. Benefits of the Provisional MSME registration are:-

  • To gain the facilities of land, accommodation, and other various required approvals
  • To get the compulsory No Objection Certificates and such other form of clearances from their concerned regulatory bodies.

Permanent MSME Registration

It is given to the existing functional unit. There are many advantages of the Permanent MSME registration but the major ones are:-

  • Tax exemptions from central government and state government.
  • Purchase and Price preference for the produced goods.

What are the Essentials of MSME Registration?

For the essentials of MSME, we first have to register the MSME with the required documents. For that, we have the government portal of for MSME registration. The MSMEs registration can be done under the following two categories in the portal –

  • For those who are not Registered yet- they shall be registered as New Entrepreneurs MSME and
  • For those who has registration as EM-II or UAM and Through Assisted filing, for those having registration as EM-II or   UAM

The essentials of MSME registration process allows the new entrepreneurs to enter in this sector and at the same time permits the existing MSMEs to come into the large scale industries. Also, the MSME registration is a simplified process as the documents requisite for the same are reasonably less. The important documents required are:-

  • Aadhaar card of the authorized person
  • Establishment proof that can be a Rent Agreement or a Sale Deed.
  • The Statement of bank or cancelled cheque.
  • PAN card of the authorized person.

What are the Compulsory Details that need to be Taken Care?

One of the most basic essentials of MSME is the Aadhaar Card and it is the only document compulsory for MSME registration. MSME registration is completely online process and no other documents are required to be proved.

The linked details of PAN and GST on turnover and investment of the enterprises can be automatically taken from the Udyam Registration Portal from the databases of Government website. The Udyam Registration Portal is completely incorporated with both the GSTIN systems and the Income Tax.

From 01.04.2021, the essentials of MSME include both the PAN and GSTIN number that are compulsory during registration. Any registration without PAN and GSTIN can be done but it has to be updated with the PAN number and GSTIN number before 1st April, 2021 for the purpose of avoiding registration suspension.

Those who have registration under EM-II or UAM or any other registration as issued by authority under the Ministry of MSME, they again will have to comply with the essentials of MSME and re-register themselves in the Portal.


Therefore, by complying with the essentials of MSME registration for businesses these micro and small enterprises receives great supportive measures from the Government[1] and it ensures and balances the foundation of their business. Besides contributing to the micro, medium and small enterprises it sometimes promotes the large industries as a supplementary unit.

Therefore, it is important for these enterprises to learn about the essentials of MSME registration and strategise their business activity to avail the various benefits under MSME.

Read our article:What is MSME Registration and how to get it?

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