MSME Registration : What it is and how to get it?

Last Updated at: Jan 13, 2021
Latest Update

Enterprise Registration Simplified for MSMEs from 1st July

Starting from 1st July, enterprises can register themselves based on Aadhaar number alone. This is as per the new norms notified by the Government on 26th June 2020.   The enterprises are no longer required to upload certificates and documents for registering online. They can provide these details with a self-declaration. This new process is named as “Udyam Registration” and is made possible after the successful integration of the registration process with those of GST and Income Tax. The details provided in the self-declaration will be duly verified by the authorities based on GSTIN and PAN. Those who do not have Aadhaar can approach the Single Window Systems along with their identity proof for Aadhaar enrollment request, bank passbook copy, voter ID card, driving license, or passport. The Single Window Systems will facilitate registration after receiving the Aadhaar number.

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In its second bi-monthly monetary meeting held on August 6, the Reserve Bank of India ( RBI) offered a new helping hand for millions of strained MSMEs by extending the loan restructuring provision.


There was a time when India’s economy was driven through agriculture. Today, a majority of it is promoted through innovation, technology, and products created by micro, small, and medium-sized businesses. This feature dives in deep to understand what entails these companies and how to register for them.

While in the last century, India’s growth story was powered by agricultural improvisation and the creation of service industries, in this century, it is largely small innovative business improvisations in the technology, manufacturing, and service sector that are fuelling economic growth and investments. To further incentivize business owners from taking the risk to constitute themselves into an organized structure – whether micro, small or medium, the government has prescribed what is known as the MSME registration. If you’re an existing business owner or have a potential idea that can be developed, there are the distinct advantages that an MSME Registration can confer.

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Who can apply?

Apart from micro, small and medium level business entities, limited liability partnerships, private and one-person companies, proprietorship firms, and public companies can also apply for registration under MSME.

While small and medium are generic terms, for deciding the applicability of the MSMED Act, the government has prescribed specific turnovers and investment limits to reckon whether an enterprise falls under the micro, small or medium category.

Know how to register your company

For units in the manufacturing sector, the investment in plant and machinery is considered, and for units in the service sector, it is the investment in equipment that is looked at, for reckoning the threshold limits.

Micro category: If the investment in your manufacturing industry does not exceed 25 lakh rupees or a service industry investment does not exceed 10 lakh rupees, you are eligible for a micro category registration. Since manufacturing requires a greater asset base and input costs, the threshold is kept higher.

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Small category: If the investment in your manufacturing industry does not exceed 5 crore rupees or a service industry investment does not exceed 2 crore rupees, you are eligible for a small category registration.

Medium category: If the investment in your manufacturing industry does not exceed 10 crores or a service industry investment does not exceed 5 crore rupees, you are eligible for a medium category registration.

Is an MSME Registration mandatory if you meet the threshold?

Although it is ideal to have an MSME registration which makes it easier to apply for government incentives, subsidies and tax rebates, it is not compulsory to apply for one. However, in the absence of this certificate, you are likely to lose out on monetary advantages like reimbursement of expenses in infrastructure development, getting ISO or international licensing, availing priority sector lending from banks and also non-monetary benefits such as access to trade exhibitions abroad, promoting entrepreneurship development, etc.

How to get an MSME Registration Certificate:

The process of registering your business has been simplified by the government through the introduction of the Udyog Aadhar in 2015 for existing business units after the Hon’ble Prime Minister made a speech about the need to have simple one-page registration forms for businesses.  Instead of filing detailed forms of Entrepreneur Memorandum while registration, a business owner can now register online through quick steps. In the last three years, more than 54 lakh registrations under the Udyog Aadhar scheme have been granted.

Details required to be filled: The following information needs to be filled for securing an MSME registration through Udyog Aadhar at its official website

  • Major activity (whether manufacturing or service)
  • National Industrial Classification Code (NEC code is a number classifying the product or service; multiple options can also be chosen)
  • Persons employed
  • Investment in Plant and Machinery (for manufacturing units)
  • Investment in Equipment (for service sector units)
  • Location of the plant(s)

Documents required: You must keep the following documents handy while uploading registration details – bank details, PAN card, Aadhar card number of the applicant and his/her social category number (if applicable), date of commencement of business and previous registration details (if any).

To refresh, the Udyog Aadhar process set up in 2015 greatly simplified the process of registering a micro, small, or medium enterprise. As long as one has the PAN and Aadhaar card and bank details, the business can be wholly registered online by filling in the required form on the official website.

To know more about SSI/MSME Registration: Click here

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