MSMEs or Micro, Small, and Medium Enterprises contribute primarily to the socio-economic development of the country. MSMEs are governed by the Ministry of Micro, Small & Medium Enterprises in India and are also required to be registered under the MSMED or Micro, Small and Medium Enterprises Development Act to avail benefits. Registration of MSME is very important, as it allows these enterprises to avail benefits from the various schemes initiated by the government.
The MSME sector enterprises contributes to 45% of the total industrial employment of India, 50% of the Total Exports of India and 95% of all the industrial units of the country, and more than 6000 different types of products are manufactured in these industries units as per the data provided on the official website of MSMEs, i.e., msme.gov.in. When these industrial units grow, the economy of the country flourishes and grows. These industries are also known as small-scale industries or SSI’s.
What is MSME?
MSME stands for Micro, Small, and Medium Enterprises. According to the MSMED or Micro, Small, and Medium Enterprises Development Act of 2006, enterprises are classified into two types which are as follows:.
• Manufacturing Enterprises are the enterprises that are engaged in the production or manufacturing of goods in the industry.
• Service Enterprises are the enterprises that are engaged in rendering or providing services
How to register as MSME?
MSMEs can be registered by simply visiting https://msme.gov.in/online-application website of the government and filling the application form for MSME Registration. It’s an online portal provided by the government that helps in the MSME Registration process. The applicants can get the MSME Registration certificate with validity of lifetime in 2-5 working days. The certificate of MSME Registration is for both manufacturing and service sector enterprises. There is no limit prescribed with respect to the name used by any individual to register for new or already existing businesses.
The difference between the manufacturing and services enterprises are removed by the recent Atma-nirbhar Bharat Abhiyaan Economic Package announced by the finance minister of India Nirmala Sitharaman. The annual turnover and investment amount are made similar for enterprises involved in both the manufacturing and service sectors. The existing and revised definitions of MSMEs are as follows:
Revised Definition and Limits of MSME: Criteria 2020
Benefits of MSME Registration
The benefits of MSME Registration in India are as follows:
* The bank loans provided to the MSMEs become extremely cheaper as the interest rate is very less, that is around 1 to 1.5%, once a person goes for Registration of MSME in India. The interest rate on loans is much lower than interest on regular loans.
* MSMEs can be registered by simply visiting https://msme.gov.in/online-application website of the government and filling the application form for MSME Registration. It’s an online portal provided by the government that helps in the MSME Registration process. The applicants can get the MSME Registration certificate with validity of lifetime in 2-5 working days. The certificate of MSME Registration is for both manufacturing and service sector enterprises. There is no limit prescribed with respect to the name used by any individual to register for new or already existing businesses.
* There are several tax subsidies offered to the MSMEs that are registered in India.
* The registered MSMEs are also allowed credit for MAT (Minimum Alternate Tax) to be carried forward for the time period of up to 15 years instead of 10 years;
* There are several government tenders that are only available for the MSME Industries. The MSME industries gets an easy access to credit. Once the MSME is registered, the cost receiving a patent is done, or the cost of setting up of the industry is reduced as many reimbursements and concessions are available to these industries.
* The businesses registered under MSMEs are given higher preference for government certification and license. For all non-paid amounts of MSMEs, there is a One Time Settlement Fee.
Documents Required for MSME Registration in India?
Following are the list of documents and information that one is required to provide as per the application form for MSME Registration in India
* The applicants Aadhar Card;
* The name of the Owner- in accordance with the Aadhar Card;
* The social category of the applicant- whether the applicant belongs to the General, SC, ST, or OBC category; Gender of the applicant; The Physical status of the applicant- whether the applicant is physically disabled or not. The name of the enterprise.The type of enterprise- select from list given in the form;
* The PAN Number.The Official Address of the enterprise’s plant. The Location of the enterprise’s plant. The Date of incorporation of the enterprise. Previous registration details of the enterprise, if any;
* Bank details associated with the enterprise;
The activity of the enterprise- choose between "Manufacturing" or "Service."
The NIC Code;
The information related to Employment- total number of employees working in the organization of the applicant;
The details of Investment in machinery and plant.;
Procedure of MSME Registration in India?
The procedure for MSME Registration is as follows:
Fill The Application Form For MSME Registration
First of all, the applicants are required to fill the necessary details required in the Registration application form for the Registration of MSMEs and then submit the application form for Registration to the concerned department. The step of filing of the application form can be begun either online or offline.
Preparation Of The Required Documents
Gather and collect all the required documents as prescribed in the MSME Registration Application form. Usually, the process of collecting all the needed documents takes about 1 to 2 working days to reach the next Registration step.
Filing Of The Application Form For MSME
The applicant is required to upload the necessary documents and submit the application form to the Registrar of MSME. The regulatory authorities do the processing and verification of the authenticity or validity of the documents submitted by the applicant. This verification and processing take around another 2 working days
Application Approval And Certificate Issuance
After the regulatory authorities are satisfied with the documents and other submissions made by the applicant, the company of the applicant gets registered under the MSME..
Application Approval And Certificate Issuances
After the regulatory authorities are satisfied with the documents and other submissions made by the applicant, the company of the applicant gets registered under the MSME.
Who is eligible to apply for MSME Registration in India
Application Approval And Certificate Issuances
* Any person who is part of a Hindu Undivided family;
* Any person who has a limited liability partnership;
* Any person who owns a partnership firm having another party as his/her association;
* Any person who is a sole proprietor;
* Any person who is an owner of a One Person Company;
* Any person who has a private limited company;
* Any person who owns a production company which is actively involved in the production of materials.
* Any person who is having co-operative societies.
How Does Taxhint Help You in Obtaining MSME Registration in India?
* Call us and raise a question, if any.
* Our experienced professionals will understand what your need is and will accordingly give you suggestions.
* We shall hand over the task of Registration to one of our dedicated and trained experts, and you will get the support and aid throughout the Registration process.
* For MSME Registration, we will help you to collect and bring all the required information and relevant documents together for the Registration of MSMEs.
Q. Is Registration of MSME replaced with Udyog Aadhar Registration?
Yes, MSME Registration is replaced with the Udyog Aadhar Registration. Any micro, small and medium industries, if want to start any business, they are required to do their Registration with MSME or Udyog Aadhar. The Registration with MSME or Udyog Aadhar can be done in two ways offline and online. This facility of Registration in two ways provides the business with several subsidies and benefits.
Q. Whether an applicant is given a hard copy or physical copy of the MSME certificate?
The Government of India has initiated paperless work in the country, so no physical copy is issued to the applicant of the Certificate for MSME Registration. However, the authority emails the MSME Registration Certificate to the applicant.
Q. For MSME Registration is Aadhar card compulsory?
Yes. For MSME Registration under the Udyog Aadhar scheme, Aadhar card is a mandatory requirement. In case the applicant for the application of Registration of MSME is some person other than the proprietor, the Aadhar card of the director and the partner will be required for Registration.
Q Can the MSME borrowers get a collateral free loan from financial institutions?
Yes, the MSME borrowers can get a collateral free loan from financial institutions.
Q. Can the existing and new businesses both apply for MSME Registration in India?
Yes, in India an existing and new business both can apply for MSME or Udyog Aadhar Registration. It is necessary that the existing unit should be in functioning and meets the threshold limits for MSME or Udyog Aadhar Registration.
Q. Whether credit score is necessary for MSMEs?
No, credit score is not required or necessary for MSMEs.
Q. What is the validity of the Udyog Aadhar Certificate?
There is no expiry date of the Udyog Aadhar Certificate. As long as the enterprise is financially healthy and ethical there will be no expiry date of the Udyog Aadhar Certificate.
Q. What is the difference between NSIC and MSME?
NSIC stands for National Small Industries Corporation. NSIC arranges and assembles raw materials in bulk on behalf of small businesses. The NSIC is a part of the Ministry of MSME. On the other hand, MSMEs are Micro Small and Medium Enterprises.
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