MSME is the registration of Micro Small and Medium enterprises. This registration is also termed as Udyog Aadhar or Laghu Udyog. Under this registration, the entities are divided into micro or small or medium enterprises as per their investment in the manufacturing business or in-service sector.

The main advantage to the business entity from MSME registration is that it provides recognition to the business by providing a unique number to the entity. According to the MSME data, this MSME sector contributes near about 50% total export, 45% total Industrial Employment, and about 95% of industrial units in which more than 6000 products are manufactured. With the growth of these MSME industries, there will be growth in the economy and reduced unemployment too by employing a good volume of unskilled and semi-skilled people. The industries registered under MSME are also known as SSI i.e. small-scale industries.

Latest Announcement by Govt.

MSMEs who are registered under GST will get 2% interest subvention from the Government for loans of INR 1cr under MSME Credit Scheme.

Division of the Enterprises Under MSME:

Under MSME the entities are divided into Micro, Small and Medium businesses. This division is based on the investment done in the initial stage when the company or entity got registered. MSME can only be applied by -

• Manufacturing enterprises
• Service enterprises

1. Manufacturing Enterprises:- Enterprises involved in the manufacturing of goods related toany industry specified in the First Schedule of the Industries Act, 1951. The ManufacturingEnterprises are defined in terms of investment in Plant & Machinery.

2. Service Enterprises:- The enterprises involved in providing services and are defined in terms of investment in equipment.

MSME / SSI registration is required for micro, small and medium-sized enterprises to avail various incentives, subsidies etc. provided under the MSME / SSID Act. Any business entity falling under above criteria can apply for MSME registration.

Although getting MSME / SSI online registration is not mandatory but it’s always suggested to get registered under MSME / SSI for various benefits provided by the government.

Types of MSME Registrations

Provisional MSME Registration:

It is granted during the pre-investment period under which the entity gets the benefit -

• Facilitates easily approvals, accommodation, and land.
• Easy clearances and NOC from regulatory authority

Permanent MSME Registration:

It is granted to the already existing entities under which the entity gets the benefits 

• Tax exemption
• Preference to the goods in terms Price and purchase

• Sanction of a loan with a lower rate of interest.
• Tax Benefits with regards to central excise and direct taxes in the initial years of company’s operation.
• Privileges on sales tax and other subsidies levied by the state government. 
• Reduces the cost of Trademark and Patent Registration
• Overdraft Interest Rate Exemption
• Industrial Promotion Subsidy Eligibility
• Subsidy on Electricity Bills 
• Availed advantages from the schemes offered by the Central Government

Additional Benefits of MSME Registration:

• Making it very easy to start a business in India
• Enterprises that have MSME certificates can get 50% subsidy on Govt. Fees for patent & trademark registration.
• MSME / SSI registered businesses avail of multiple income tax subsidies/rebates and benefits from the government.
• MSME / SSI registered businesses can get easy bank loans up to 1 crore without mortgage/collateral and with lower interest rates.
• Businesses registered under MSME are given top priority in terms of government licenses and certifications.
• Various government tenders are reserved for MSME to promote small business participation in India.
• Free Marketing assistance by the Government
• Free Technical & Managerial Consultancy Services from the Government
• Free Training and Manpower Development assistance for international Exhibitions/ Fairs by Government.
• Free Training Programmers on Packaging for Exports by Government
• National award for quality products to encourage small-scale industries to manufacture quality products meeting the requirements to national and international standards.
• Enterprises with MSME Registration Certificate can get a Concession on electricity bill by making applications to the electricity department.
• Enterprises experiencing any dispute with regard to payments may refer the dispute to the MSME Council for Conciliation & Arbitration (Resolution).

Credit Benefit for the Manufactured MSME Products

The products mentioned in the list of MSME like spices, pickles, oil, breads, wooden products, candles, agarbatties, Aluminium products etc. can also be produced by the bigger entities but these large entities are required to comply with the criteria of export i.e. minimum 50% of their annual production of the MSE reserved products. Because of the provision that financial institutions are required to provide a part of their lending to the entities registered with MSME, has made an easy access to credit. Micro and Small entities get more priority in terms of the lending then small entities registered under MSME. Out of total funds available 60% is reserved for micro-enterprises and 40% for small enterprises.

For Proprietary Firm

• Shops & Establishments Certificate/Ghumasta
• Address Proof of the firm

For Pvt. Ltd/Limited/OPC

• MOA, AOA, Incorporation Certificate
• Company PAN Card
• Company Address Proof

For LLP/Partnership Firm

• LLP Agreement/Partnership Deed
• Firm PAN Card
• Firm Address Proof

• Application can be filed offline and online.
• Fill in the required particulars along with the Aadhaar details and Name of the Applicant.
• Validate the application through OTP received on the registered mobile number.
• MSME certificate will be generated. The unique registration number will be provided. This registration number is UAN (unique account number).
• There no registration fee for the registration of Udyog Aadhaar.

Following are the details that an entity has to provide:

• Name of Enterprise
• Type of Organization
• Business Activity
• Total investment in the business

Schemes Launched Under MSME:

Udyog Aadhaar memorandum scheme:

• MSMEs can get loans credit, and government subsidies quickly. 

Women entrepreneurship –

• To boost and encourage women, the Government provides financial help, counseling, and training to them in order to help them better management of their businesses.

Zero defect zero effect:

The government ensures goods produced by these MSMEs when exported are not returned to India. This is done by providing standardized protocol for product manufacturing. This scheme also helps MSMEs to enjoy rebates and concessions on exported goods.

• Quality management standards and quality technology tools:
• It helps in the healthy competitiveness among establishments basically in order to ensure no quality hampering of manufactured goods.
• Grievance monitoring system:
• This monitor and caters the complaints and suggestions.
• Credit linked capital subsidy scheme:
• Can avail funds so that MSMEs can replace their old machinery, so that they can upgrade their business with new technology.

On daily basis there are multiple companies who are getting registered. Many companies registered have huge funds available with them as they have investors on their back. But what about the entrepreneurs who want to help boost the economy and start their business but have no or less fund. All such entrepreneurs get benefit from government through MSME registration. The introduction of MSMED Act is a boom to the economy. The business entities registered under MSME registration are supported by many additional schemes from the Central Government. This way it leads to faster development of the economy and it makes the entrepreneurs to run their business more efficiently.

If you want to avail the benefits under MSMED Act, then register your entity under MSME. You can take the help of expert to register yourself. Contact Corpseed.