The MSME legislation provides for registration in both manufacturing and service industries, regardless of whether the company is in production or service. Despite the fact that the government has not made this registration mandatory, it is preferable to have one’s business registered under it because it gives several tax benefits, financial support, and other business-related advantages.
On October 2, 2006, the MSME (Micro, Small, and Medium Enterprises) became functioning. It was created to help micro, small, and medium-sized businesses to become more competitive by promoting, facilitating, and developing their competitiveness.
What is MSME Registration?
Any business that qualifies as a small or medium-sized enterprise (SME) must guarantee that it is legally registered. Micro, Small, and Medium Enterprises (MSME) registration is a type of business registration. The MSMED Act was introduced by the Indian government to assist small and medium-sized businesses through different subsidies, plans, and incentives. Because MSME plays a key part in the country’s economic progress, banks make loans at lower interest rates with MSME registration.
Definition of MSME (Micro, Small, and Medium Enterprises)
For Micro Enterprises: Microenterprises are manufacturing and service businesses with a capital investment of less than Rs 1 crore and a turnover of less than Rs 5 crore.
For Small Enterprises: The investment and turnover thresholds for small businesses have been raised to Rs 10 crore and Rs 50 crore, respectively.
For Medium Enterprises: Medium businesses are those with a capital investment of up to Rs 20 crore and a revenue of up to Rs 100 crore.
When an enterprise exceeds the ceiling restrictions defined for its current category in either the investment or turnover criterion, the entity ceases to exist in that category and is moved to the next higher one.
No business may be put in a lower category unless it falls below the ceiling restrictions set for its current category in terms of both investment and turnover.
All units with the same Goods and Services Tax Identification Number (GSTIN) listed against the same Permanent Account Number (PAN) will be treated as one enterprise, and the turnover and investment figures for all of these entities will be viewed together, with only the aggregate values being used to determine whether the entity is classified as micro, small, or medium.
Importance of MSME Registration for Retail Traders and for Wholesale Traders
Growth has increased, especially in semi-urban and rural areas, allowing the SME and MSME sectors to flourish. To boost the growth of the SME and MSME sector, the government has implemented a number of incentives, programs, and subsidies aimed at increasing individual engagement in the industry.
If a company is registered under the MSME program, it is entitled to a variety of tax breaks, municipal schemes, subsidies, and other incentives. Banks also offer low-interest loans to such businesses, allowing them to expand and expand their operations.
The MSME and SME sectors account for over 70% of India’s GDP. This applies to industries ranging from agriculture to raw resources, retailing, and manufacturing. Small firms must be registered in the MSME Sector for their own growth.
Documents required for MSME Registration for Retail Traders/ Wholesale Traders
The applicant’s Aadhar number.
The organization’s PAN, location, and address.
IFSC code and bank account number.
Copies of the Purchase and Sales Bills.
The company’s primary business activity.
2 digit NIC code.
The applicant’s name, PAN number, gender, mobile number, and email address.
Plant and machinery/equipment purchases.
The number of employees you plan to hire and when you want to start your business.
A process on “How to Register under MSME?”
Beginning of the Registration Process
To start MSME Registration Process, the first step is to log in to Udyam Registration
Complete the Application Form
The second step is to complete the MSME Registration form, which includes all of the relevant information about your firm, such as the company name, registration number, GST number, and so on.
Fill in your Personal information
At this point, you must fill in all of your personal information, including your name, address, PAN card, bank account information, and other information that is required during the MSME registration procedure. A photo must also be uploaded.
An Executive will review your application.
During this stage, an MSME executive will evaluate your application. You will be notified if there is a discrepancy and given the option to remedy it.
Obtain a Mail Certificate
After completing the whole form, you will receive an MSME Registration certificate. To see how the Sample MSME Certificate would look, you can download a copy from the portal. The Ministry will not send you a paper copy. You will obtain a digital certificate for MSME Registration.
This is the procedure for registering a business as a Micro, Small, and Medium Enterprise (MSME). It is worth noting that the entire registration process is completely free.
FAQs on MSME Registration in India
1. Is Udyam Registration compatible with MSME Registration?
Yes, Udyog Aadhaar Registration has been replaced by Udyam Registration for MSME registration. If a micro, small, or medium-sized firm wants to start up, it can apply for MSME/Udyam Registration. MSME/Udyam Registration is entirely done online. This registration entitles the company to numerous privileges and incentives.
2. Is it possible for traders to obtain a Udyog Aadhar Number?
Yes, registering for a Udyog Aadhar is one of the ways to become an MSME (Micro, Small, and Medium Enterprises), which refers to enterprises that fit into the Micro, Small, and Medium Enterprise category.
3. Is it necessary to register as a small business?
No. Businesses that fall into the MSME category are not required to apply for MSME registration. However, it is preferable to gain MSME/Udyam registration because the government offers a variety of incentives to MSME-registered businesses, including lending facilities, quick access to credit, low-interest rates, and eligibility for a variety of government programs.
4. How long does the MSME registration certificate last?
The Udyam Registration Certificate has no expiration date. The certificate will not expire as long as the entity is financially sound and ethical.
Obtaining an MSME registration or Udyog Aadhaar is optional and at the Entrepreneur’s discretion. However, most businesses should seek MSME Registration as soon as possible after registering a business entity to enjoy benefits such as protection against late payments under the MSMED Act.