MSME Registration

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MSME Registration

What is MSME?

MSME (Micro Small & Medium Enterprises) plays a very vital role in the economy. Such enterprises provide support to the industries through raw material supply and supply of goods & finished product. MSMEs are classified in terms of investment made in plant & machinery and equipment. Brief Explanation on Classification of MSME in India on the basis of investment is described below:-

Investment made in Plant & Machinery

1.      Micro Enterprise– Up to Rs.25 lakhs investment in plant and machinery

2.      Small Enterprise– From Rs.25 lakhs upto Rs.5 crores invested in plant and machinery

3.      Medium Enterprise– From Rs.5 crores up to Rs.10 crores in plant & machinery

Investment made in Equipment

1.      Micro Enterprise– Up to Rs.10 lakhs investment

2.      Small enterprises– From Rs.10 lakhs up to Rs.2 crores investment

3.      Medium Enterprise– From Rs.2 crores up to Rs.5 crores.

What is MSME Registration?

Recently Government of India has introduced various schemes, subsidies, and incentives to promote MSME (Micro, Small and Medium Enterprises) through MSMED Act. Not only the government but banks are also providing loans to these MSMEs at very concessional rates to set their first brick of the business. However, to get these benefits from the central and the state government or the banking sector, you would have to apply for MSME Registration. The Government of India has made it compulsory to have an Aadhar Number for Registration under the MSME. For MSME, an application shall be filed online using the official website of Udyog Aadhar Registration at Udyog Aadhar Website and this can be verified using the Aadhar OTP. It’s is playing a very crucial role across the nation for small and medium enterprises. It has been observed from various surveys that the economic growth of the country not only depends upon large scale enterprises but also on small sector enterprises operating in India. It is the backbone of such country whose economy is depends upon agriculture. India has huge stock of natural resources therefore the growth of small scale industries is certain. In the year 2015, government changed MSME registration into Udyog Aadhar Registration.

Importance of MSME Registration:

MSME registration is very important for the transparency and accountability in business of small scale industries. To promote the MSMEs throughout the country there is a MSME department which is an authorized body established by the government. With registration one can avail numerous incentives as per MSMED Act. It is mandatory in order to subscribe under MSME.

Advantage of MSME/SSI Registration

The micro, small and medium enterprises in the manufacturing sector and the service sector can obtain MSME Registration. It is not mandatory to obtain but quite beneficial for certain businesses as it provides several benefits like:-

· Lower Rates of Interest on the loan

· Tax Subsidy

· Excise Duty Exemption schemes

· Subsidy tariffs

· Also capital investments subsidy, and other supports

· Collateral free loans from the banks

· Reservation policies for the manufacturing sector and production sector

· Special consideration for the international trade fairs

· Eligible for IPS subsidy

· Reimbursement of ISO certification

· International Trade Fairs Participation

· Octroi Benefits

· Waiving off Stamp Duty and Registration Charges

· Exemption under the Income Tax

· Reimbursement under the Bar Code Registration

· NSIC and Credit Rating

· Industrial Promotion Subsidy

Eligibility criteria for MSME / Udyog Aadhar Registration

An Applicant can apply for registration if they fulfill one or multiple of the below mentioned criteria, such as if:-

1.  Sole proprietor (exclusive owner of a business)

2.  Hindu Undivided Family

3.  Partnership firm with another party in an association

1.  OPC (One Persons Company)

2. Limited Liability Partnership

3.  Private Limited Company

1.  Production company that produces materials

2. Co-operative societies

3.  Or any other undertaking

Documents required for MSME Registration

· PAN Card of the proprietor/ all the partners/all the directors

· Aadhar Card of the proprietor/all the partners/all the directors

· Proof of ownership of premises

· If rented premises then rent agreement and NOC from the landlord along with the utility bill

· Copy of sale bill for each end product

· Copy of purchase bill of each raw material purchased

· Copy of Partnership Deed in case of partnership firm

· Copy of MOA, AOA and COI in case of body corporate along with the Board’s Resolution authorizing.

· Copy of Industrial License as obtained under Industrial Development and Regulation Act,1951

· An affidavit on Rs.10/-non judicial stamp paper duly attested by Notary Public affixed providing the status of machinery installed, power requirement etc.

· Purchase bill of machinery installed

· Bills in relation to purchasing and installation of plant and machinery

· Bank Account Statement / Passbook