What is MSME registration? And how to apply for MSME registration online?

We all know that a country’s actual economic growth doesn’t really depend only on the big industries on a mega scale. Those are scarce in numbers. So the multinational organizations do bring in the development but on a general overview it’s the multiple small scale industries that are the backbone of a country’s economy. We are talking about something as small as cottage industries and the micro small medium enterprises. These small businesses are the true economy developers. These industries are diverse with each state adapted to their regional culture and tradition. And that’s why they are also a kind of cultural symbol.

What is the concept of MSME Registration?

The Indian government has created more accountability and support for these MSME industries in order to promote them and encourage their growth. Under the MSMED act the government has classified MSME industries as micro, small and medium enterprises. To every such industry that has an MSME Registration under the MSMED act, the Indian government provides with subsidies and certain incentives. But in order to avail for such benefits, you must get an MSME Registration. Apart from the small scale business in states, the other registered businesses like sole proprietorships, limited liability partnerships, public limited companies and private limited companies can also get an MSME registration for themselves. Let’s look at the classification criteria for the MSME Registration.

MSME Classification under the MSMED

In order to get MSME Registration your will have to get some information on how and under what category you need to do the registration for the size of industry you own. Following is the classification:-

• Micro enterprise:- You may register under this section if the investments in your industry did not exceed the amount of Rs25 lakhs, this is for the manufacturing sector of industry. For the service sector, it’s 10 lakhs.
• Small enterprises:- You can get your MSME Registration under this category if the investments into your industry were made more than the amount of Rs 25 lakhs but did not exceed the amount of Rs5 crores. For the ones in service sector the rage is from the amount of Rs 10 lakhs to Rs2 crores.
• Medium enterprises:- If your business has an investment that is more than Rs5 crores for the manufacturing sector while more than Rs 2 crores for service the sectors. Also not exceeding the amount of Rs 10 crores for manufacturing sector and Rs 5 crores for service sector then you may as well get your MSME Registration under the medium enterprise category.

MSME Registration Process:-

The MSME Registration takes place under the MSMED act. It’s not legally mandatory to apply for SSI registration but it is highly recommend getting an MSME Registration in order to avail the great government benefits.

The typical MSME Registration process involves preparing an application to be submitted to the respective government department. Your MSME Registration application will require some of your basic details to be filled in its form. The processing of your application will take anywhere between 15 days to 20 days which depend upon the satisfactory completion of your application. In case any errors are found on review, you will be asked to check whether to correct them and re-submit. Once the department is satisfied, you will be granted MSME Registration certificate making you eligible for all the desirable government given benefits.

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What are the benefits of MSME Registration?

Last few decades have seen the Micro Small and Medium Enterprises (MSME) sector emerging as highly lucrative and active sector of the Indian economy. The MSMEs have known to play a crucial role in the development and industrialization of the rural and comparatively backward areas by providing immense employment opportunities at a reasonably lower capital. This has helped to bring down the levels of inequitable development and distribution of wealth that has prevalent in the rural and urban areas. MSMEs contribute greatly to the socio-economic development of the country.

The Micro, Small and Medium Enterprises Development (MSMED) Act was notified in 2006 to help with the development of the small-scale industries and to draft and manage the policies affecting MSMEs. The Act seeks to facilitate the investments in the MSMEs and enhance the competitive markets. The act also provides the legal framework relating to all the aspects of the MSMEs defining and categorizing them.

The Act provides MSME registration Process and further simplifies the process.

What are the benefits of MSME registration?

• Collateral free loans up to a limit of 50 lakh.
• A substantial subsidy of 50% on Patent registration.
• 1% exemption on the interest rate on overdraft which is bank dependent.
• Eligibility for the subsidy of Industrial Promotion
• Protection against any delay in payments from buyers has right to the interest on delayed payments.
• Multiple income tax and capital gain tax-related subsidies from the government.
• Concession in electricity bills
• Eligible to claim for reimbursements of ISO Certification expenses.
• Access to various development programs resulting in the increase of overall productivity.
• Support is provided to new micro and small enterprises. Guidelines on how to start a business assessing loans from banks are also provided.
• Eligible for reimbursement of part of one-time registration fee and annual recurring fee for first three years for using bar-coding.
• The rates of interest on loan offered to MSMEs are comparatively lower.
• Businesses registered under MSME are able to obtain government license and certification quicker than the regular process.

What is the procedure to obtain an MSME registration online?

The procedure is easy and straightforward. Following details are required to be submitted:

1. A valid Aadhaar number. An OTP shall be sent for validation on the mobile number linked with the Aadhaar provided.
   An applicant or the authorized signatory who is not yet enrolled for Aadhaar shall have to apply for Aadhaar enrolment. Meanwhile, UAM registration must be filed by the concerned DIC on behalf of such applicant/ enterprise, after the production of some documents for alternative identification
2. Name of the owner/ applicant as per the adhaar card. The name provided must exactly match to that entered in the Adhaar Card lest the applicant will not be able to fill the form further.
3. Social category to be selected from the given options
4. Gender
5. Mention if physically handicapped
6. Name of the Enterprise/ Business that will be printed on the MSME Certificate and by which the enterprise is known to the general public
7. Type/ Structure of organization – Sole proprietorship, Co-operative, Private Limited Company, OPC, LLP, HUF etc
8. PAN number for LLP, Company etc
9. Location of the plant, which can be multiple
10. The official address may be mentioned if is different from the plant address
11. Mobile number of the applicant
12. Email ID of the applicant
13. Date of commencement of the Business
14. Details of any previous registration
15. Bank Account number and the IFSC number
16. Primary business activity – Manufacturing or Service
17. Sub-category of the business category to be selected, which is associated with a 2-digit NIC code.
18. Additional Details of the business
19. Number of employees
20. Total investment made in the plant & machinery / equipment
21. Choosing the DIC in case of more than one DIC in the district.
22. A scanned copy of Adhaar card has to be attached in jpg format
23. Final submission.

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How to apply for MSME Registration in India

The MSME which stands for micro small and medium-sized enterprises and also known as SSI which stands for small scale industry. These are common and profiting businesses that receive many benefits from the government as the government itself promotes it. Once you have decided to have your own business of this sort, you will require to get the MSME Registration or SSI Registration.

The MSME enterprise that is into manufacturing sector has its own categories depending on the monetary investment that is made to start them up. Those categories are as followed:-

• The micro-enterprises, these are the one in which the investment is less than the Rs 25 lakhs in their business’s machinery and plant.
• The small enterprises are the ones in which the entities that are investing would be in an amount between Rs 25 lakhs Rs 5 crores on their plant and the machinery.
• And finally the medium sized enterprises, the entities invest the monetary amount between Rs 5 crore and Rs 10 crore.

The other category of MSME enterprises would be in the service sector. And this category is based on the amount invested in the equipment.

• In this sector again, we start with micro enterprise that has entities investing less than Rs 10 lakhs.
• The small-sized enterprises with an investment by entities being more than the amount of Rs 10 lakhs, however, less than the amount of Rs 2 crores.
• The final category of medium-sized enterprises, here the entities invest an amount between Rs 2 crores and 5 crores.

Instructions on How to fill an online form for MSME Registration?

• Fill 12 digit Aadhaar card number that was issued by the government of India to the applicant.
• Fill in the name of the applicant has been mentioned on the Aadhaar card.
• Then select your social category from the given options in the online form.
• Then select your gender from the 3 options provided.
• Mention whether you are physically handicapped.
• Fill in the name of your enterprise or the business for which you need the MSME Registration certificate for.
• Next, selection of the kind of organization your MSME or SSI is. This will be printed on your MSME registration certificate or your SSI Registration
• Now fill in the 10 digit PAN card number if in case you are involved with limited liability partnership or something like a co-operative society or a private limited / public limited. This step of PAN card number is optional in the case of proprietary firm where solo business is handled as a self-help or a unit like Hindu undivided family.
• Fill the regional location of your MSME or SSI plant.
• The address of your main office which should the address other than the plant location.
• Your email address on which you can be contacted.

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