MSME Registration Is Not Available To Everyone?

MSME Registration Is Not Available To Everyone?

Introduction

Small and medium-sized businesses are the backbone of an economy like India’s. A nation’s economy thrives when these industries are thriving. Small-scale industries are also known as small-scale industries or SSIs. The MSME act enables companies to register for either manufacturing or service lines, regardless of their business type. Although the government has not yet made this registration obligatory, it is advisable to do so since it offers several advantages in terms of taxation, business setup, access to credit, loans, etc. As part of the MSME act, small, medium, and microbusinesses are supported, assisted, and strengthened to become more competitive.

It is important to note, however, that not all businesses are eligible for MSME registration due to a maximum revenue threshold set by the government. A company must meet the MSME eligibility requirements to be considered for registration.

Eligibility For MSME Registration

A Micro, Small & Medium Enterprise Development Act of 2006 states that if a MSMEs meets the following criteria, they can be classified as part of the manufacturing sector:

  • An investment of not more than 25 lakhs is required for Micro Enterprises.
  • Investments in Small Enterprises exceed 25 lakhs but do not exceed 5 crores.
  • For Medium Enterprises, the investment exceeds 5 crores but does not exceed 10 crores.

Service sector MSME registration eligibility is as follows:

  • In the case of Micro Enterprises, the investment does not exceed 10 lakhs.
  • Small Enterprises invest more than 10 lakhs but not more than 2 crores.
  • Medium Enterprises invest more than 2 crores but not more than 5 crores.

In addition to revising the investment requirements, the Indian government has added annual turnover to the definition of MSME.

These are the revised eligibility criteria, according to the revised definition:

 

  • A Micro Enterprise has an investment of no more than 1 crore, and its annual turnover is not more than 5 crores.
  • In Micro Enterprises, the investment is not more than 10 crores, and the turnover isn’t more than 50 crores.
  • In Micro Enterprises, the investment doesn’t exceed 20 crores, and the turnover doesn’t exceed 100 crores.

Documents Required For MSME Registration

  • PAN Number
  • Aadhar Number
  • Business Address
  • Basic Business Activity
  • Bank Account Number
  • NIC 2-digit code
  • Annual Turnover Details (according to MSME’s new definition)
  • Investment Details
  • Copies of Purchase & Sales Bills
  • Partnership Deed
  • License Copies & Purchase Bills of Machinery

MSME Registration Fees

The Udyam Portal must be accessed in order to register as an MSME. In order to register as an MSME, there are no costs involved. The registration process is free of charge.

Steps To Apply For MSME Registration Process

There are a number of advantages available to MSMEs. If you wish to take advantage of these benefits, you must register your company on the UAM portal (Udyog Aadhaar Memorandum).

Having said that, you may be wondering “how do I register a MSME online?” The process is as follows:

  1. On the government website, fill out the registration form (UAM portal).
  2. If you are a new entrepreneur and have not yet registered as an MSME, you should click on the first link on the tab, “For New Businessmen.”
  3. Enter your name and Aadhaar number, then click “Validate & Generate OTP.”
  4. After the verification has been completed, submit the PAN information and the organization type. If PAN is not an option, select “No”.
  5. Please fill out fields 5 through 24 of the form.
  6. Please enter the OTP that was sent to your mobile number and the verification code to submit the form securely.
  7. You will receive a “Thank You” message with your registration number after registering successfully.
  8. Following the successful submission of the application form, approval and registration will take place within 2-3 business days.
  9. You will receive your MSME certificate via email once your application has been approved.

Registration for Businessman Already Having Udyog Aadhaar Memorandum

  1. Visit the government portal (UAM portal) to complete the form.
  2. The “For those who are already registered as UAM by assisted filing” or “For those who are already registered as UAM” tabs should be selected.
  3. Click “Validate & Generate OTP” on the following screen after entering the Udyog Aadhaar number.
  4. Your UAM account will send you an OTP to the email address or mobile number you registered.
  5. Make sure all the necessary information is filled out on the MSME registration form, and then submit it.
  6. After submitting the registration form successfully, the registration and approval process will be completed within a few days.
  7. Upon approval, the MSME certificate will be emailed to you.

Benefits of MSME Registration For Your Business

Among the benefits of MSME registration are:

  • Bank loans are available at the lowest interest rates possible. Compared with standard loan interest rates, the rate on these loans is roughly 1% to 1.5 % lower.
  • Tax benefits can also be obtained from the MAT (minimum alternate tax), which is creditable for up to 15 years.
  • A number of rebates and concessions are available for the establishment of an industry or the securing of patents.
  • There is a possibility of reimbursement for ISO Certification fees.
  • Credit assessments are simple for MSMEs.
  • For overdue amounts, small and medium-sized businesses must only pay a one-time settlement fee.
  • You will be able to obtain government contracts easily since the government favors small and medium-sized businesses.
  • Numerous government programs are available to you, such as the Credit Linked Capital Subsidy Program, the Credit Guarantee Program, the Protection Against Delayed Payments Program, and others.
  • Banks offer priority sector loans to MSMEs.
  • Registration with barcodes is subsidised.
  • MSME gets a discount on its electricity costs.
  • International trade fairs are given special consideration.
  • State government support.

 

Conclusion

MSMEs are seen as the foundation of economies in emerging economies such as India. In addition to contributing to the socioeconomic development of the nation, MSMEs serve as an auxiliary unit to the major industries. 

This industry provides employment opportunities on a large scale at lower costs than other large industries. As a result, a much more even distribution of wealth and national income is achieved, as well as industrialization of rural and underdeveloped areas. Despite the fact that MSME registration is not mandatory, registered MSMEs enjoy several advantages in terms of credit, loans, taxation, company setup, etc. If your company requires assistance with MSME registration, Vakilsearch can handle it for you!

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