Overview of MSME Registration
Before understanding, what is MSME Registration; it is important to know what MSME is? MSME stands for Micro, Small, and Medium Enterprises and is the backbone of the economy. MSME is the apex executive body for the implementation and administration of rules, regulations, and laws relating to Micro, Small, and Medium Enterprises. Both the Manufacturing and Service sectors can apply for MSME Registration.
Now, if we talk about MSME Registration, MSME Registration is a simple and less time-consuming process for registering the MSMEs and SMEs. It provides various benefits to the enterprises like by providing financial support and also excess to government subsidies. It helps in improving the infrastructure and in expanding the business.
What are the Advantages of Availing the MSME Registration?
MSME Registration provides various benefits to Micro, Small, and Medium Enterprises. A Few of them are mentioned below:-
- Helps in Obtaining the Government Tenders
MSME registration assist to acquire government tenders with no trouble as Udyam Registration Portal is incorporated with Government e-Marketplace & various other State Government portals which present easy access to their marketplace & e-tenders.
- Exemptions under Direct Tax Laws
Enterprises that enclose MSME Registration can benefit from Direct Tax Exemption in the early year of business, as stated in the scheme by Government & depending on business activity too.
- Collateral Free Loans from Banks
The Government of India has authorized collateral-free credit available to all small & micro business sectors. This scheme guarantees funds to micro and small division enterprises. Under this very scheme, both the old and new enterprises can seek the benefits.
The ‘Credit Guarantee Fund Scheme’ (CGS) for Micro & Small Enterprises was launched by the Government of India to make accessible collateral-free credit to the micro & small enterprise sector. Both the existing & the new enterprises are entitled to be covered under this scheme.
- Exemption on the Overdraft Interest Rate
Enterprises or Businesses registered under MSME can gain a benefit of 1% on the Over Draft as stated in a scheme that varies from bank to bank.
- Claim the Expenses for the ISO Certification
The registered MSME can seek the reimbursement of the operating cost that was spent for recognition of ISO certification.
- Concession in Electricity Bills
This concession is accessible to all the Enterprises that have the MSME Registration Certificate by providing an application to the department of the electricity along with the certificate of registration by MSME.
- Subsidy on Patent Registration
A hefty 50% subsidy is given to the Enterprise that has the certificate of registration granted by MSME. This subsidy can be availed for patent registration by giving application to respective ministry.
- Industrial Promotion Subsidy Eligibility
Businesses registered under MSME are also qualified for getting a subsidy for Industrial Promotion as recommended by the Government.
- Protection against Delayed Payments
Sometimes, the buyers of services and products from the MSME’s/SSIs tend to delay the payments. The Ministry of MSME lends a helping hand to such Businesses by giving them the power to collect interest on the payments that are deferred or delayed from the buyer’s side. The completion of such disputes has to be done in minimum time through reconciliation and adjudication.
- Special Consideration on International Trade Fairs
Financial assistance is provided on a reimbursement under the International Cooperation Scheme basis to the industries/enterprises Associations and registered societies/trusts, State/Central Government organizations, and organizations connected with MSME for delegation of MSME business to other countries. It is for discovering new areas of MSMEs, contribution by Indian MSMEs in trade fairs, international exhibitions, buyer-seller meet & for holding international conference & seminars which are in the concern of MSME sectors.
- Waiver of Stamp Duty and Registration Fees
All new industrial units containing MSME Registration & expansions will be exempted from payments of Stamp Duty & Registration fees in India.
- Bar Code Registration Subsidy
All Enterprises that have MSME Registration can gain Bar Code Registration subsidy as declared in the scheme.
- Subsidy on NSIC Performance and Credit Ratings
Enterprises that encompasses MSME Registration can gain Subsidy on NSIC Performance & Credit ratings as stated in the scheme.
- Eligible for Industrial Promotion Subsidy
All Enterprises that are registered under MSME Registration are qualified for Industrial Promotion Subsidy (IPS) as stated in the scheme.
- Access to Tenders
There are numerous government tenders that are disclosed only to MSMEs to encourage small business involvement in India.
- Benefits of Reservation Policy
It ensures increased production of consumer goods in the small scale enterprises as well as enlarge employment opportunities throughout setting up small scale industries.
- 15% CLCSS Subsidy to Purchase of Plant & Machinery
The Ministry of MSME is operating a scheme particularly CLCSS “Credit Linked CGSTI Subsidy Scheme” for technology up-gradation of MSE.
The revised scheme aims at assisting technology up-gradation of MSEs by giving a 15% capital subsidy (limited to maximum Rs.15 lakhs) for the purchase of Plant & Machinery.
- Reservation Policies to Manufacturing/Production Sector
Reservation of items for exclusive manufacture in SSI sector statutorily provided for in the Industries (Development and Regulation) Act, 1951, has been one of the important policy measures for promoting this text-center sector.
Who all are Eligible for MSME Registration?
The Below-mentioned entities are eligible for MSME Registration-
All the micro, small and medium level business entities falling in the prescribed parameter, can apply for MSME registration in India. Apart from Micro, small, and medium level enterprises-
- Limited liability partnerships (LLP),
- A private limited company (Pvt. Ltd.),
- One-person companies (OPC),
- Proprietorship firms and
- Public companies can also apply for MSME registration. Also, if the Company is in the manufacturing or the service sector can go for MSME Registration.
- Any entity having a valid Aadhar Number can apply for MSME Registration.As Aadhaar Number is mandatory for issuance of MSME Certificate.
Parameter for MSME registration- Under the Atmanirbhar Bharat Abhiyan, the government has revised the classification of MSME by inserting composite criteria of both Investment and Annual Turnover. The limit for both the manufacturing and service sector are the same. The classification of Composite criteria is mentioned below-
1. Investment less than Rs. 1 Cr.
2. Turnover less than Rs. 5 Cr.
1. Investment less than Rs. 10 Cr.
2. Turnover less than Rs. 50 Cr.
1. Investment lessthan Rs. 50 Cr.
2. Turnover less than Rs. 250 Cr.
What are the Essential Components of Application for MSME Registration?
The essential components of MSME Application for MSME Registration are:-
- Name of Individual/Entity as per Aadhar card.
- Social category (General, OBC, SC/ST)
- Physically Handicapped
- Name and type of the Organization.
- PAN Card of Individual and Enterprise
- Location/Address of Plant.
- Country, State, District, City, Tehsil, PIN Code
- Address Proof of office.
- Mobile Number and Email ID of the Applicant.
- Date of Commencement of Business
- Bank account number and IFSC code
- Business activity of the enterprise
- NIC 2 Digit Code – Based on primary activity.
- Additional information of enterprise if any
- Number of employees
- Investment amount in Plant & Machinery
What Documents are Required for MSME Registration?
Apart from the above-mentioned details, requisite documents are also required for MSME Registration-
- Id and Address Proof of the Applicant.
- Photograph of the Applicant.
- Aadhar Card of the Applicant.
- Documents related to the Business entity.
- Address Proof of Working premise. In the case of a Self-owned property-Sale deed is required. In the case of rented property-Rent Agreement and NOC from the owner is required.
- Bank related documents.
- In the case of Partnership Firm-Partnership Deed is required.
- In the case of Company-PAN Card, MOA, AOA ,and Certificate of Incorporation
What is the Procedure to Obtain the MSME Registration?
An applicant shall comply with the below-mentioned procedure to obtain the MSME Registration-
- Step-1- Visit the Page
An applicant needs to Visit the Page https://www.msmeregistration.org/.
- Step-2-Enter the Aadhar Number
An applicant shall enter the Aadhar No. and click on generate OTP. The OTP will be sent to the Mobile Number linked to the Aadhar card.
- Step-3-Fill the Application Form
An applicant has to fill in the requisite details along with the personal details in the application form.
Here, the Personal details include Name, address, PAN Card, Bank account details, and some relevant information that is mandatory during the MSME registration process. Also, a photograph of the applicant needs to be uploaded.
Also, few things are taken into consideration while applying i.e. the MSME Registration can be done under the following categories-
1. New registration.
2. For those having registration as EMI-II or Udyog Aadhar Memorandum.
Further, New registration is done by entering Aadhar details of the applicant in 2 ways:-
1. Registration with PAN Card
2. Registration without PAN Card.
- Step-4-Submission of Application
Once the details are filed, an applicant shall apply.
- Step-5-Processing Of Application
Once the application is submitted, the executive will review the application. In case of any discrepancies, the executive will intimate the same to the applicant on his/her registered E-mail id and number to make the relevant changes.
- Step-6-Receiving the MSME Certificate
After reviewing the application, the authority will issue the certificate for MSME Registration.
What is the Penalty for None-Filing of MSME-01?
Non-compliance will lead to punishment and penalty under the provision of the Companies Act. As per Penalty Provision of Section 405 (4) of the Companies Act, 2013
Companies are required to file half yearly returns in MSME Form 1 with the Registrar of Companies in respect of outstanding payments to the micro and small for the goods and services supplied by them in case the payment period exceeds 45 days from the date of acceptance or the date of deemed acceptance.
Periodicity of Return
Penalties for non filing of MSME-01
· For the month of April to September : 31st October
· For the month of October to March: 30th April
· Companies have to report the amount of due payment and the reason of the delay while filing the returns.
· Non-filing of MSME – 01 or giving incorrect or incomplete form in any material aspect, Company shall be liable a fine upto INR 25,000
· Every officer in default shall be liable to fine of INR 25,000 to INR 3,00,000 or Imprisonment upto 6 months or both.
Penalty will be applied for incorrect facts or even for attempts to suppress the self-declared facts and figures:-
Second or Subsequent
Fine Up to 1K
How can an Applicant Check MSME Registration Status?
An applicant can check the MSME Registration status by reference number and name by following the below-mentioned steps-
To check the status, an applicant can visit the MSME Registration portal.
Enter 12-digit UAM number followed by a verification code as mentioned in the Captcha image.
After entering the 12-digit UAM number, click on the ‘Verify’ button.
An applicant can check the status of MSME Registration.
How can an Applicant Download or Print the MSME Registration Certificate?
- To download or print an MSME registration certificate, an applicant can click onhttps://udyamregistration.gov.in/UA/PrintAcknowledgement_Pub.aspx to fill in the requisite details
- After that, applicant is required to enter his/her 12-digit UAM No.
- He/ She also need to enter his/her mobile number, as per Udyog Aadhaar Certificate.
- After submitting the above-mentioned details, applicants can download or print their MSME registration certificate.
CorpBiz Procedure for MSME registration
Kindly utilize the steps given above to integrate legally and securely a MSME registration and get the benefits in the form of better-quality sales and satisfied clients. Our CorpBiz experts will be at your disposal for assisting you with guidance concerning MSME registration and its compliance for the smooth functioning of your business in India. CorpBiz professionals will assist you in planning seamlessly at the least cost, confirming the successful conclusion of the process.
It is advisable that an attorney with “MSME experience” must be appointed to overwhelm many of the potential pitfalls that creep around within MSME registration and to understand the requirement in detail. The elementary information would be mandatory from your end to start the process. The Attorney will begin working on your request once all the information is provided, and the payment is received.
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Frequently Asked Questions
- Technology and Quality Up gradation Scheme.
- Grievance Monitoring System
- Credit Linked Capital Subsidy Scheme.
Following entities are eligible for MSME registration-
- Sole Proprietorship
- Partnership Firm
- Limited Liability Partnership (LLP)
- Private Limited Company
- Public Limited Company
- Co-Operative Society and Trust.
MSME Certificate is issued within 1-2 working days from the date of submission of application.
There can be various reasons for rejection of MSME application-i.e.
- Low CIBIL score,
- Unpaid debts,
- Loan defaults,
- Low cash flow,
- Lack of business plan,
- Incomplete documentation and False details, etc.
Once the MSME registration is complete, the applicant will receive a copy of the MSME certificate at the registered email address.
Udyam Registration is a registration to start a business under the Ministry of Micro, Small, and Medium Enterprises approved by the Government of India. Whereas MSME Certificate is a 12-digit Unique Identification Number (UIN) provided by the Ministry of Micro, Small, and Medium Enterprises for Small and Medium Enterprises (SMEs).
Yes, Aadhaar card is mandatory for MSME registration.
No, As the Government has initiated the scheme for paperless work, so no physical copy is issued.
Yes, MSME borrowers get collateral free loans from financial institutions.
No, credit score is not required for MSMEs.