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Overview

MSME Registration in India

An Overview

MSME stands for Micro, Small, and Medium Enterprises, which are businesses or organizations that fall under specific classifications based on their investment in plant and machinery or equipment and their annual turnover. MSMEs are essential to the economy, particularly in developing countries like India, as they contribute to employment generation, economic growth, and regional development.

WHAT IS MSME CLASSIFICATION?

MSME Classification refers to the categorization of businesses into Micro, Small, and Medium enterprises based on their investment in plant and machinery or equipment and their annual turnover. This classification helps determine the eligibility for government schemes, subsidies, and various support programs aimed at promoting the growth of MSMEs in India.

MSME Classification Table:

Category	Investment in Plant & Machinery/ Equipment (in ₹)	Annual Turnover (in ₹)
Micro Enterprises	≤ ₹1 crore	≤ ₹5 crore
Small Enterprises	> ₹1 crore but ≤ ₹10 crore	> ₹5 crore but ≤ ₹50 crore
Medium Enterprises	> ₹10 crore but ≤ ₹50 crore	> ₹50 crore but ≤ ₹250 crore

Key Points:

Micro Enterprises: These are the smallest type of businesses, with minimal investment and turnover. They are typically run by individuals or small family units.
Small Enterprises: These businesses are larger than micro enterprises but still relatively small in terms of investment and turnover. They are usually more structured and may have a small team.
Medium Enterprises: These businesses are larger in scale, with higher investments and turnover. They often have a more significant workforce and may be in a more competitive market.

WHO CAN APPLY FOR MSME REGISTRATION?

Any individual who intends to establish a micro, small, or medium enterprise can file for Udyog Aadhar/Udyam Registration online through the Udyam Registration portal. Eligible applicants include:

Proprietorships
Hindu Undivided Family (HUF)
Partnership Firm
One Person Company (OPC)
Private Limited Company
Public Limited Company
Producer Company
Limited Liability Partnership (LLP)
Any Association of Persons
Co-operative Societies

WHO CANNOT APPLY FOR MSME REGISTRATION:

Foreign Businesses: Foreign-owned companies or entities cannot apply for MSME registration.
Large Enterprises: Businesses whose investment and turnover exceed the limits for medium enterprises cannot be registered as MSMEs.

Benefits of FSSAI

Benefit	Description
Financial Support	Access to government loans, subsidies, and financial schemes.
Protection Against Delayed Payments	Timely payments mandated by MSME Act.
Easier Access to Credit	Special schemes for MSMEs offering low-interest loans.
Tax Benefits	GST exemptions and income tax benefits.
Eligibility for Tenders	Preference in government contracts and tenders.
Marketing Support	Assistance in product promotion and digital marketing.
Export Benefits	Support for MSMEs in exporting goods and services.
Lower Cost of Compliance	Relaxed compliance norms and documentation.
Legal Protection	Legal recourse for timely payments and IP protection.
Increased Credibility	Recognition in the market, fostering trust and growth.
Quality Certifications	Access to certifications to improve product/service quality.
Skill Development	Government-backed training programs for entrepreneurs and employees.

Documents Required for MSME Udyam Registration

Aadhaar Card (for the business owner):

1. The Aadhaar number of the individual/entrepreneur (proprietor, partner, director) is required to authenticate the registration process.
2. The business owner’s name in the Aadhaar card must match the name of the business.

PAN (Permanent Account Number): The PAN of the business or enterprise (if applicable). This is necessary for registration to ensure that the business entity is properly identified by the Income Tax Department.
Business Name and Type: Details about the business, such as its name and the type of enterprise (e.g., proprietorship, partnership, LLP, company, etc.).
Business Activity: You will need to mention the primary activity of the business (whether it is manufacturing, service, or both).
Investment in Plant and Machinery/Equipment: The total investment made in plant and machinery or equipment (depending on whether the business is in the manufacturing or service sector).
Annual Turnover: The annual turnover of the business (for the last financial year) is required to determine the correct MSME classification (Micro, Small, or Medium).
Bank Account Details: Details of the business’s bank account (bank name, account number, and IFSC code) may be needed for records.

Eligibility for MSME Registration

Entity Type:
1. The business should be a proprietorship, partnership firm, Limited Liability Partnership (LLP), Private Limited Company, Public Limited Company, Cooperative Society, or Society.
2. Sole proprietors, partnerships, and limited companies can apply for MSME registration.
Indian Business: Only Indian businesses or Indian citizens running businesses in India are eligible for MSME registration.
Business Activities: The business must be engaged in manufacturing or providing services (including trading businesses that meet the investment and turnover thresholds).
Investment and Turnover Limits: The business must meet the investment in plant and machinery or equipment (for manufacturing or service) and annual turnover limits defined for Micro, Small, or Medium Enterprises, as mentioned in the table above.

STEPS TO CHECK ELIGIBILITY:

Determine the Investment: Check the total investment in plant and machinery (for manufacturing) or equipment (for services).
Calculate the Turnover: Check the annual turnover of your business for the last financial year.
Compare with MSME Classification: Match your investment and turnover with the classification criteria (Micro, Small, Medium) mentioned in the table above.

How to Apply for MSME Registration on Udyam Registration Portal?

Steps to Apply for MSME Registration on Udyam Portal:

Visit the Udyam Registration Portal: Go to the official Udyam Registration Portal.
Click on "For New Entrepreneurs who are not Registered yet as MSME or those with an existing Udyog Aadhaar": On the home page, click the option that mentions "For New Entrepreneurs who are not Registered yet as MSME or those with an existing Udyog Aadhaar".
Enter Your Aadhaar Number:
1. Aadhaar-based Authentication is required for individual proprietors, so enter your Aadhaar number in the designated field.
2. After entering the number, click on "Validate & Generate OTP".
3. An OTP will be sent to the registered mobile number linked with your Aadhaar. Enter the OTP to authenticate.
Enter the Required Details:

After Aadhaar authentication, you’ll be asked to provide business-related details such as:

- 1. Name of the enterprise
  2. Type of ownership (individual, partnership, LLP, company, etc.)
  3. PAN number of the business (if applicable)
  4. Investment in Plant and Machinery/Equipment (this helps classify the business as Micro, Small, or Medium)
  5. Annual turnover (last financial year)
  6. Business activity (manufacturing, service, or both)
  7. Bank details (bank name, account number, IFSC code)
Self-Declaration: Provide a self-declaration regarding the investment and turnover of your business. No additional documents or paperwork are required at this stage, but ensure the information is accurate.
Submit the Registration Application:
1. After entering all the necessary information, click on the "Submit" button to complete your registration process.
2. Once the details are verified, you will be issued an Udyam Registration Number (URN).
Download the Udyam Registration Certificate:

After submission and processing, you will receive a Udyam Registration Certificate that includes:

- 1. Udyam Registration Number (URN)
  2. Business name
  3. Investment and turnover details
  4. Classification (Micro, Small, or Medium)
You can download this certificate from the portal and print it for future use.

MSME Compliance Under the MSME act

Due Date: MSMEs must ensure they comply with payment schedules under the MSME Development Act, ensuring that payments to MSMEs are made within 45 days by buyers. Timely payments help maintain smooth cash flow and prevent financial stress for small businesses, fostering better relationships between buyers and suppliers.

Penalty: If buyers delay payments to MSMEs, they may face a penalty under the MSME Development Act. MSMEs can claim interest for late payments and file complaints to recover dues. Legal provisions under this Act ensure MSMEs receive their rightful payments, offering a clear path to redressal and financial justice.

MSME Registration

MSME REGISTRATION FEES:

No Fee: Udyam Registration is free of charge.
Self-Declaration: No cost for online registration.
No Hidden Costs: No hidden or government service fees.
Optional Professional Help: If you hire a consultant (CA/Tax Professional), fees may apply but not for registration itself.

MSME REGISTRATION CERTIFICATE:

Issued after Registration: Once Udyam Registration is completed.
Online Availability: Downloadable from the Udyam Portal.
Details Included: Business name, type (Micro/Small/Medium), PAN, Aadhaar, and other details.
Validity: No expiry unless business exceeds MSME limits or changes.
Required for: Access to government schemes, financial support, tenders, and benefits.

MSME REGISTRATION NUMBER:

What is it: A unique Udyam Registration Number (URN) issued after successful MSME registration.
Issued After: Completing Udyam Registration on the government portal.
Used for: Identification of MSMEs for government schemes, loans, and other benefits.
Format: Typically includes the Udyam Registration ID with the business’s details.
No Renewal Needed: Once issued, the number remains valid unless the business changes its status.

MSME REGISTRATION STATUS:

What it is: Indicates the current status of your MSME registration.
How to Check: Visit the Udyam Portal and enter your Udyam Registration Number (URN) or Aadhaar number.
Possible Status:
- Registered: MSME is successfully registered.
- Pending: Registration is under review or awaiting verification.
- Rejected: Registration has been rejected due to incorrect details.
- Verified: Information has been verified and approved.
Purpose: Helps businesses confirm their registration status for government benefits, schemes, and financial services.

MSME REGISTRATION CERTIFICATE DOWNLOAD:

Where to Download: From the official Udyam Registration Portal.
Steps:
1. Visit the Udyam Portal.
2. Enter your Udyam Registration Number (URN) or Aadhaar number.
3. Access and download the certificate.
Details on Certificate: Includes business name, registration number, PAN, type (Micro/Small/Medium), and more.

HOW TO CHECK MSME REGISTRATION BY NAME:

Visit the Udyam Portal: Go to the official Udyam Registration website.
Search by Name: Enter the business name in the search option.
Enter Details: You may need to enter additional details like Aadhaar number or business type.
Check Status: View the registration status and details of the MSME.

Note: Direct search by business name might not always be available, but you can try using the Udyam Registration Number (URN) or Aadhaar number for a more precise search. This ensures better access to your registration status and necessary updates. Additionally, businesses can track their progress to avoid delays in claiming benefits.

Why Choose Filingin for MSME Registration in India?

To get Udyam Registration with FilingIn, simply follow our straightforward and efficient process, ensuring a quick and hassle-free registration. Start by providing your basic business information, and we will manage everything from there.

We will validate the required details, submit your application, and guide you through obtaining your Udyam certificate. Our team of experts will handle all complexities, ensuring your registration is accurate and stress-free.

Once the process is complete, you’ll receive your Udyam certificate, unlocking access to various government benefits and MSME support programs. Choose FilingIn for an easy and seamless MSME registration experience!

Frequently Asked Questions in India

What is MSME?

MSME stands for Micro, Small, and Medium Enterprises. It refers to businesses categorized based on their investment in plant & machinery (for manufacturing) or turnover (for service enterprises).

Who can apply for MSME registration?

Any entrepreneur or business involved in manufacturing or providing services can apply, provided they meet the investment and turnover criteria as per MSME classification.

How to register an MSME?

MSME registration can be done through the Udyam Registration Portal by providing details like Aadhaar number, PAN, business type, and financial information.

Is MSME registration mandatory?

No, MSME registration is not mandatory, but it offers many benefits like easier access to loans, government schemes, and tax advantages.

Is MSME registration free?

Yes, Udyam Registration is free of charge. There are no fees for registering as an MSME.

What is the validity of MSME registration?

Once registered, the Udyam Registration is valid for life unless the business exceeds the limits for its category (Micro, Small, or Medium).

How do I check the status of my MSME registration?

You can check your MSME registration status by visiting the Udyam Portal and entering your Udyam Registration Number (URN) or Aadhaar number.

What documents are required for MSME registration?

Key documents include Aadhaar number, PAN (for company/LLP), bank account details, and business financial information like investment in plant & machinery.

What are the benefits of MSME registration?

Benefits include easy access to finance, government subsidies, tax exemptions, priority sector lending, eligibility for tenders, and more.

Can I update my MSME registration details?

Yes, you can update details such as your business address, investment figures, and turnover on the Udyam portal.

What is the Udyam Registration Number?

The Udyam Registration Number (URN) is a unique identification number issued to businesses after completing the registration process on the Udyam portal.

Can I register as both a manufacturer and service provider under MSME?

Yes, MSMEs engaged in both manufacturing and services can register, but the classification depends on the main business activity and financial criteria.

What is the difference between Udyog Aadhar and Udyam Registration?

Udyog Aadhar was the previous registration system, while Udyam Registration is the newer system that is more digitally integrated and streamlined. Udyog Aadhar is now discontinued.

What happens if I miss the deadline for MSME registration?

There is no specific deadline for MSME registration, but registering early helps you access benefits and protections available to MSMEs.

Can I register if my business exceeds the MSME threshold?

If your business exceeds the threshold limits for Micro, Small, or Medium businesses (based on investment or turnover), you will not qualify for MSME registration.