Micro, Small, and Medium Enterprises, also known as MSMEs, are on the rise in India and according to the central government form the backbone of the country’s economy. To this end, the government of India has created schemes to promote such industries. Registering under the Udyog Aadhaar scheme is a first step to being eligible under these schemes.
MSMEs contribute nearly 50% of India’s total employment (45% to be precise). It also contributes to 50% of India’s total exports, and 95% of all industrial units. Over 6,000 products are manufactured by these industries, according to the official government website.
MSMEs became operational in October 2006 to promote, facilitate and develop the competitiveness of India’s micro, small, and medium enterprises.
What Are MSMEs? How Are They Classified?
The current classification of MSMEs is based on the criteria of investment in plant, machinery or equipment. Further, to enjoy MSME benefits, the company is required to limit its investment to a lower limit as described in the table below:
| Existing MSME Classification | ||||
| Sector | Criteria | Micro | Small | Medium |
| Manufacturing | Investment | < Rs.25 lakh | < Rs.5 crore | < Rs.10 crore |
| Services | Investment | < Rs.10 lakh | < Rs.2 crore | < Rs.5 crore |
These lower limits have pulled back companies from wanting to grow, as they are unable to scale their businesses.
However, when the Central Government launched the Aatmanirbhar Bharat Abhiyan in 2020, it redefined how MSMEs needed to be classified. Under the new rulings, the distinction between the manufacturing and service sectors has been removed. Further, the Centre has inserted composite criteria of both investments, as well as annual turnover. As a result, MSMEs are now classified like this:
| Revised MSME Classification | |||
| Criteria | Micro | Small | Medium* |
| Investment & Annual Turnover | < Rs.1 crore & < Rs.5 crore | < Rs.10 crore & < Rs.50 crore | < Rs.50 crore & < Rs.250 crore |
How Does One Register As An MSME?
If you want to register your company as an MSME, then you need to visit the government portal www.udyamregistration.gov.in. Further, you can register as an MSME under two categories in the portal. They are:
- For new entrepreneurs who are not registered as MSMEs
- Similarly, for those registered as EM-II or UAM or for those registered as EM-II or UAM through assisted filling
If you are a new entrepreneur who isn’t registered as an MSME, you need to carry out the following steps:
- Click on the button ‘For New Entrepreneurs Who Are Not Registered As An MSME’
- You will have to then register by entering your Aadhaar number, which can be done in two ways
- Registering with PAN
- Registering without PAN
If you are registering with your PAN then you have to follow the following steps:
- Once you enter your Aadhaar number, you will be sent an OTP on your registered email and mobile number
- Additionally, enter the OTP and you are taken to the PAN verification page
- If you have a PAN card, then your portal gets the details from the government database
- ITR details are then filled up by the individual
- Once your details are entered, you are informed through a message that ‘Udyam Registration has been done through PAN’. You are then required to validate your PAN
- You are then required to fill out your personal details of the plant or industry
- Once this is done, click on ‘Submit and Get Final OTP’.
- Hence, after verification of your registration, you get a Udyog Aadhaar Registration Certificate after a few days
Registration without PAN
In case you do not have a PAN Card, then click on ‘No’. You will then be required to conduct the following steps
- You are immediately taken to the Udyam Registration Page where you are required to enter your personal details
- Once this is done, click on ‘Final Submit’ and you will receive a Thank You Message
- Once you get your PAN and GST numbers, you will be required to update them on the portalcheck here to more about: https://incometaxindia.gov.in/Pages/tax-services/apply-for-pan.aspx
Registration for Entrepreneurs Already Having EM-II Or UAM
In case you are registered as an EM-II or UAM, you are required to click on the button that says ‘For those registered as EM-II or UAM’ or ‘For those registered as EM-II or UAM through Assisted Filing’.
You will be then relocated to a page where the Udyog Aadhaar Number is to be entered. You will also be sent an OTP on your registered mobile number and email
After entering the OTP, you are to fill out your registration details and the Udyam registration will be complete.
Downloading Udyog Aadhaar Registration Certificate
The Udyog Aadhaar MSME registration is a certificate that is provided to micro, small and medium-sized businesses in India under the MSME Act, 2006. Udyog Aadhar was earlier referred to as the MSME certificate
Lately, the process has been merged with Udyog Aadhar registration and the application can be made online. Moreover, the primary objectives of the Micro, Small, and Medium Enterprises concerning the Udyog Aadhar registration are as follow:
- To enable the micro, small and medium enterprises to compete with international competition efficiently;
- To promote the growth of micro, small and medium enterprises on a large scale to effectively tackle the widespread problems of unemployment and poverty;
- Further, to extend the benefits of various government scheme at one stop to the SSI units;
- Additionally, to safeguard SSI from financial harassment in the hands of big industries.
And remember, if all this seems like a lot of complexity, the experts at Vakilsearch can undertake this for you at a perfectly nominal fee.
Also, Read:
