What is MSME Registration and how to get it

What is MSME Registration?

The Ministry of Micro, Small, and Medium Enterprises (MSME) in India is a government agency responsible for the promotion and development of micro, small, and medium enterprises in the country. MSME registration is a process by which small and medium-sized businesses in India can register with the MSME to take advantage of the various benefits and incentives offered by the government.

Some of the benefits of MSME registration include access to various government schemes and initiatives, such as credit facilities, technical assistance, and marketing support. It can also make it easier for your business to participate in government tenders and contracts, and can help you access subsidies and tax benefits.

Who Can Apply for MSME Registration?

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.

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:

You are qualified for a micro category registration if the investment in your manufacturing sector does not exceed 25 lakh rupees or the investment in your service industry does not exceed 10 lakh rupees. The barrier is kept higher in manufacturing since it demands a larger asset base and higher input costs.

Small category:

You are eligible for a minor category registration if the investment in your manufacturing sector does not exceed 5 crore rupees or the investment in your service industry does not exceed 2 crore rupees.

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 the threshold is met?

It is not required to register for an MSME registration, even though it is ideal since it makes it simpler to apply for government incentives, subsidies, and tax breaks. However, without this certification, one may miss out on non-financial benefits like access to trade shows abroad, encouraging the growth of entrepreneurship, etc. as well as financial advantages like reimbursement of expenses for infrastructure development, obtaining ISO or international licencing, and obtaining priority sector lending from banks.

How to get an MSME registration certificate?

After rendering it a straightforward one-page registration form for businesses, the government streamlined the procedure for registering a business by introducing the Udyog Aadhaar for existing business units in 2015. A business owner can now register online in a few simple steps rather than having to fill out complicated entrepreneur memo papers. More than 54 lakh registrations under the Udyog Aadhaar scheme have been approved during the last few years.

Details required to be filled:

The following information needs to be filled for securing an MSME registration through Udyog Aadhaar at its official website

https://udyamregistration.gov.in/Government-India/Ministry-MSME-registration.htm.>

• 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 for MSME Registration:

The following documents have to be kept handy while uploading the registration details like bank details, PAN card, Aadhaar card number of the applicant and his/her social category number (if applicable), date of commencement of business and previous registration details (if any).

Why Vakilsearch?

As you register your company for MSME registration, a team of legal specialists from Vakilsearch will assist you for a hassle-free procedure. You will stay in contact with a committed Vakilsearch specialist who will assist you in registering for MSME promptly and easily. Vakilsearch receives a number of registrations from various companies each year. Vakilsearch offers inexpensive costs without tack-on fees, in contrast to other legal websites. If you need assistance with MSME registration, don't fret, Vakilsearch is here to help you.