All about MSME Key Benefits, Registration, Criteria & Process Online

What is MSME?

Micro, Small, and Medium Enterprises (MSMEs) form the backbone of the Indian economy, playing a crucial role in generating employment, fostering innovation, and driving economic growth. This comprehensive guide provides an overview of MSME classifications, MSME registration online processes, benefits, and frequently asked questions.

MSMEs are businesses defined based on their investment in equipment and annual turnover limits, as outlined by the MSME Development (MSMED) Act of 2006. The government recognizes MSMEs as key contributors to economic development, especially in sectors like manufacturing, services, and trade.

MSME Classifications: Micro, Small, and Medium Enterprises (MSME)

1. Micro Enterprise

A Micro Enterprise is the smallest business entity within the MSME classification. These enterprises typically have:

• Nature of Operations: They primarily operate at a local or community level, often involving family-owned or individual proprietorship setups. Activities may include manufacturing small-scale goods, offering basic services, or engaging in retail trade.
• Examples: Handicrafts, home-based food production, tailoring services, small-scale repair shops, or local retail stores.
• Significance: Micro enterprises are vital for rural and semi-urban economies, often driving local employment and income generation.

2. Small Enterprise

A Small Enterprise represents a business entity that operates at a larger scale than micro enterprises but still focuses on a limited geographical or market scope. It has:

• Nature of Operations: These businesses usually expand their operations to cater to larger local or regional markets. They may engage in the manufacturing of goods, provision of specialized services, or trading activities requiring higher capital and workforce.
• Examples: Small manufacturing units, IT service firms, specialized workshops, or boutique food and beverage outlets.
• Significance: Small enterprises contribute significantly to job creation, the development of specialized skills, and regional economic growth.

3. Medium Enterprise

A Medium Enterprise is the largest classification within MSMEs, bridging the gap between small businesses and large corporations. These enterprises are characterized by:

• Nature of Operations: Medium enterprises often cater to national and international markets. They possess advanced capabilities in manufacturing, services, and trading, leveraging economies of scale and improved technologies.
• Examples: Mid-sized manufacturing plants, IT software development companies, export businesses, or medium-sized logistics firms.
• Significance: Medium enterprises are critical drivers of innovation, technology adoption, and export promotion, contributing significantly to GDP and international trade.

 MSME Classification Based on Turnover Limit in 2024

The new MSME classification for MSME Registration is based on a composite criterion

What Is MSME Registration?

The government of India offers MSME registration to the industries classified as Micro, Small, and Medium Enterprises (MSMEs) to assist them in receiving benefits that will help establish and grow their businesses.

Obtaining the MSME registration is not obligatory; however, it can be advantageous as it provides a range of benefits related to setting up the business, taxation, credit facilities, loans, and more. You can complete MSME registration online in the comfort of your home through the Udyam registration portal.

MSME Registration Eligibility

All manufacturing, service industries, wholesale, and retail trade that fulfil the revised MSME classification criteria of annual turnover and investment can apply for MSME registration. Thus, the MSME registration eligibility depends on an entity’s annual turnover and investment. The following entities are eligible for MSME registration:

When to Apply for MSME/Udyam Registration?

While Udyam Registration is not obligatory and remains at the entrepreneur’s discretion, most businesses should apply for MSME registration online soon after establishment. Registering early allows entrepreneurs to access a range of benefits provided by the government.

Documents Required for MSME/Udyam Registration?

How to Get Udyam Registration Online?

To obtain Udyam Registration online, MSMEs can follow these simple steps on the Udyam registration portal:

Step 1: Visit the Udyam registration portal. https://udyamregistration.gov.in/UdyamRegistration.aspx

Step 2: On the homepage, click the option ‘For new entrepreneurs who are not registered yet as MSME or those with EM-II.

Step 3: Enter the ‘Aadhaar Number’ and the ‘Name of Entrepreneur,’ then click the ‘Validate & Generate OTP’ button.

Step 4: An OTP will be sent to the mobile number linked with the Aadhaar card. Enter the OTP and click on the ‘Validate’ button.

Step 5: Once the Aadhaar is validated, proceed to the PAN verification page. Enter the ‘Type of Organisation ‘PAN’ number, and click the ‘Validate’ button. Also, indicate whether you have filed the previous year’s ITR and if you have a GSTIN.

Step 6: The Udyam registration application form will appear. Fill in all required details, including the name of the entrepreneur, mobile number, name of the enterprise, location of the plant/unit, address of the enterprise, status of enterprise, bank details, activity of the unit, NIC code, and number of persons employed.

Step 7: Provide the following Details. Click the Submit button and Get the Final OTP.

Investment in plant and machinery details and turnover details.

Select the declaration.

Step 8: Enter the final OTP received and submit the form. You will receive the Udyam e-registration certificate in your email.

By following these steps, MSMEs can efficiently complete the Udyam Registration process, get a Udyog Aadhar certificate and access the benefits and support provided to registered enterprises under the MSME category.

MSME Registration Fees

The government charges no fees for MSME registration. It is free of cost on the official website, i.e., Udyam Portal.

Get Udyam Registration Certificate

Upon completing the Udyam Registration process, MSMEs will receive their Udyam Registration Certificate online. This Udyog Aadhar certificate will be equipped with a dynamic QR Code, allowing easy access to all relevant details about the enterprise.

Renewal of Udyam Registration

Unlike other registrations, the Udyam Registration Number is permanent and does not require renewal. Once obtained, MSMEs do not need to go through any renewal process for their Udyam Registration. This feature ensures a hassle-free experience for registered enterprises, allowing them to focus on their business growth and development without the burden of periodic renewals.

Which fields CANNOT be amended using the application for Amendment of Registration?

Application for Amendment of Registration cannot be filed when there is:

• Change in PAN.
• Change in Constitution of Business resulting in change of PAN.
• Change in Place of Business from one State to other.

Benefits of Being Classified as MSME

The Ministry of MSME provides various benefits to the MSME sector through its attached offices, autonomous bodies, and public sector undertakings. Some of these benefits are:

Testing facilities

The ministry operates a network of testing Centre’s and laboratories nationwide, where MSMEs can avail of quality testing, calibration, certification, and consultancy services for their products and processes.

Entrepreneurship development

The ministry conducts training programs, workshops, seminars, and awareness campaigns to promote entrepreneurship among potential and existing entrepreneurs, especially women, youth, and marginalized groups.

Project profiling

The ministry prepares and disseminates project profiles and feasibility reports on various sectors and sub-sectors of MSMEs to assist entrepreneurs in setting up and running their enterprises.

Consultancy

The ministry provides consultancy services to MSMEs on various aspects, such as technology upgradation, marketing, finance, management, and legal issues. Through its network of field offices and partner organizations, businesses can also explore MSME registration online for streamlined support and growth opportunities.

Export assistance

The ministry facilitates the export of MSME products and services by providing information, guidance, incentives, and support to exporters and by participating in trade fairs and exhibitions, both domestic and international.

Environmental audits

The ministry conducts environmental audits and assessments of MSME units, to help them comply with the environmental norms and regulations, and to adopt eco-friendly practices and technologies.

Frequently Asked Questions

1. What is MSME?

Micro, Small, and Medium Enterprises (MSMEs) are businesses defined by their investment in equipment and annual turnover limits, as outlined by the Government of India.

2. Is MSME registration mandatory?

No, it is not mandatory for small, medium, and micro enterprises.

3. How to verify an MSME registration?

Visit the Udyam portal, click ‘Verify Udyam Registration Number,’ enter the number, captcha, and verify.

4. Can a partnership firm apply for MSME registration?

Yes, if it meets the MSME classification’s investment and turnover criteria.

5. Is Aadhaar required for MSME registration?

Yes, Aadhaar is mandatory for proprietors, partners, or directors.

6. What is the validity of MSME registration?

It is valid indefinitely as long as the entity remains compliant and financially healthy.

7. Who is eligible for MSME registration?

Entities like proprietorships, partnerships, companies, trusts, or societies with investments below ₹50 crore and turnover below ₹250 crore.

8. How long does MSME registration take?

Registration is completed immediately after submission on the Udyam portal.

9. Can traders get MSME registration?

Yes, wholesale and retail traders are eligible, except those dealing in motor vehicles or motorcycles.

10. Is MSME registration free?

Yes, MSME registration on the Udyam portal is free of cost.

For more detailed guides and professional assistance, visit apkireturn or call us at +91 766 515 6000. Let us help you make your MSME Registration easy.