Sole Proprietorship is arguably the most famous business model in India. There are plenty of reasons why upcoming entrepreneurs wish to get started with this business model. Complete authority over the business with no outside interference is probably the primary reason why this business model is so popular in our country. If you wish to get started with this business model, there are 3 methods to do the same. In this blog, we will come to know How Can a Sole Proprietorship Company Apply for an MSME Registration.
Sole Proprietorship Registration Modes
Following are the different modes of Sole Proprietorship Registration:-
The Shop and Establishments Act
It is required when the local bylaws is applicable in the vicinity where the Sole Proprietorship Company is situated.
Udyog Aadhaar under MSMED Act
It is applicable to the small and the micro-companies.
If the business is earning more in the certain prescribed limit, then they must opt for the GST registration. The limit for the goods supplier and service provider has been capped at 40 lakhs and 20 lakhs respectively
MSME is the backbone of the Indian economy as they contribute significantly to the development of the country. The growth of MSME and the country’s economy is inter-related and somewhat proportion to each other. Meaning – any surge in the growth MSME would be reflected the economic growth of the company.
Read our article:Procedure for Sole Proprietorship Registration: A Step by Step Guide
MSME: Service Enterprise and Manufacturing Enterprise.
The following table demonstrates the maximum threshold of investment applicable to MSME against the annual turnover limit.
|Type of company
|Threshold For Maximum Investment
|Threshold for Annual Turnover
|Up to Rs.1 crore
|Up to Rs. 5 crores
|Up to Rs.10 crores
|Up to Rs. 50 crores
|Up to Rs. 50 crores
|Up to Rs. 250 crores
Process for Registering the MSME
Following are the steps that will help you complete the MSME registration process:-
- An owner of the Sole Proprietorship Company needs to reach out to the online portal of Udyam and file an application for registration. Uploading of documents or certificates is not mandatory here.
- The applicant needs not to bear any fees to serve this purpose.
- In the case of the proprietorship company, the applicant must furnish Aadhar card number. Meanwhile, in the case of a partnership firm, Managing partners are the ones who will need to provide the Aadhaar card number. In the case of a Hindi Undivided Family, the Karta will be accountable for providing the Aadhaar card for the registration purpose.
- In the case of LLP or Company or a society, trust, cooperative society, the authorized signatory ought to furnish PAN Card, Aadhar card number along with GSTIN.
No person is permitted to file more than one registration. However, the applicant is free to mention the number of activities including manufacturing or service, or both in one registration of Udyam. As soon as the registration is finished, the applicant will receive the URN along with the electronic version of the Udyam registration certification.
Documentation Needed for Udyam Registration
The followings are the documents needed for MSME registration:
- Aadhar card number
- Proprietorship firm: Aadhhar card of the proprietor
- Partnership firm: Aadhaar card of the managing director.
- Hindu Undivided Family: Aadhaar card of the Karta.
- LLP, trust, or society: Aadhaar card of the authorized signatory.
- In the case, if the company completed the registration in the absence of a PAN card, any detail regarding the preceding years that lacks the inclusion of a PAN card ought to be filed on a self-declaration basis.
Advantages of MSME registration
MSME registration offers countless benefits to the small scale industries in India which are as follow:
- The applicant can avail hassle-free loans at a nominal rate of interest.
- MSMEs are permitted to carry forward minimum alternate tax for the duration of fifteen years.
- Companies under MSME registration are allowed to sign up for government-oriented tenders.
- MSME has a large portfolio of credit scheme for small scale businesses operating in the country.
- The setup cost for new companies reduce dramatically under the MSME scheme.
- The provision for One Time Settlement Fee exists in the MSME scheme.
- Government license is easily available for companies under MSME registration.
- The owner of Sole Proprietorship Company who seeks for MSME registration for their business should be accustomed to composite
- A composite criterion of investment shall be applicable on companies referred to as micro, small, or medium.
- If an enterprise surpasses the ceiling limit mentioned for its existing category in either of the two criteria of turnover or investment, it will be transferred to the next higher category but no company shall be routed to the lower category unless it goes below the specified ceiling limits for its existing category in both criteria of turnover as well as investment.
- All units with GSTIN numbers listed against the PAN will be collectively deemed as a single enterprise and the investment and turnover limit for all such enterprises will be treated in uniformity. The aggregate values will be the only deciding factor that shall determine the category of the enterprise.
Companies under MSME registration have exposure to countless government scheme and tax benefits as compared to non-MSME based firms. If you are someone who has a small business and looking for ways to reap more benefits or profit out of the business then MSME registration is something you must consider without an exception.
Make sure to connect with professionals of the CorpBiz for seamless drafting of application for MSME registration. The expert will assist you in catering to the requirement of registration through a professional approach.
Read our article:Know the Documents Required for Sole Proprietorship Registration