MSME Udyam Registration
Eligibility | Benefits | Process
MSME Udyam Registration is necessary for eligible businesses to take advantage of several benefits, concessions in trademark filing, and incentives. Register your company, LLP, as an MSME now under the MSMED Act 2006.
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IMPORTANT DISCLAIMER
We are a professional consulting firm specialising in company registration, taxation, accounting, payroll, compliance, and intellectual property rights (IPR) services to assist new and existing businesses in India. We provide our professional services at a reasonable fee, explaining the eligibility, process, and documents required for setting up and maintaining a business. We also prepare and file necessary applications with relevant government agencies such as the Registrar of Companies (ROC) and the Income Tax Department. We do not directly provide government documents or represent ourselves as a government agency.
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Overview of MSME Udyam Registration in India
- Government Portal
- Process
Fully digitalised and Paperless.
- Who can apply
- Public Limited Companies
- Private Limited Companies
- One Person Companies (OPCs
- Limited Liability Partnerships (LLPs)
- Proprietorship Firms
- Partnership Firms
- Hindu Undivided Family (HUF) Businesses
- Co-operative Societies
- Trusts
- Societies
- Govt Fee
NIL (No Government Fee)
- Certificate Issued
Udyam Registration Certificate
- Mandatory Requirement
Aadhar of the Entrepreneur (Owner, Director or Authorised Signatory)
Meaning or Definition of MSME
Small business is the backbone of developing economies like India. These businesses operate on a smaller scale with limited capital. However, since they are mostly labour-intensive, their significance from the perspective of employment generation in the economy is quite huge. This is why the government aims to nudge the growth of the MSME industry in India consistently. The MSME stands for Micro, Small, and Medium Enterprises. These enterprises are categorised based on their plant and machinery or equipment investment and annual turnover. The definitions have been revised by the Government of India as of July 1, 2020. The new criteria are as follows:
| Enterprises Type | Investment in plant and machinery or equipment | Turnover During the Previous FY |
|---|---|---|
|
Micro Enterprises |
Up to ₹1 crore |
Up to ₹5 crore |
|
Small Enterprises |
Up to ₹10 crore |
Up to ₹50 crore |
|
Medium Enterprises |
Up to ₹50 crore |
Up to ₹250 crore |
Important Note
- Calculation of Net Turnover: The Export Turnover is excluded from the overall turnover
- Net Investment: For the purpose of calculation of net investment of the MSME unit, the Investment made in Research, Pollution Control, and safety device installations are excluded
MSME Registration for Wholly Owned Subsidiary of a Foreign Company
The wholly owned subsidiary of a foreign company, or for that matter, any company in India that has received FDI, is treated at par with any other company in India. Therefore, if the twin criteria of investment in plant and If The machinery and annual turnover are net, the wholly-owned subsidiary company is very well covered under the definition of MSME and, therefore, can obtain MSME Udyam Registration.
Checklist for MSME Registration in India
The registration process for MSME Udyam Registration is fully digitalised and paperless. However, before you proceed to fill out the application form for the MSME Registration, you should prepare the following information so that it remains handy. The MSME is an Aadhar-based registration. Therefore, the aadhar number, which is linked with the mobile number of the owner or director of the business, is one of the key requirements.
Information of Unit/Enterprise
- Company or Unit Name
- Entity Type (Constitution)
- Date of Incorporation/Establishment
- PAN of Entity
- GST Number
- Business Address
- Bank Name
- Bank Account Number
- IFSC Code
- Major Business Activity
- Number of Employees
Information of Entrepreneur (Owner/Director)
- Name of Authorised Signatory
- Aadhar Number
- Gender
- Category
- Specially Abled (Divyang)
- Mobile Number
Contact us for a detailed Excel checklist that we have prepared so that you can capture all the information in one place, making it easy and error-free. Please note that well-prepared applicants will find it easy and simple to obtain an MSME registration. You can also visit https://udyamregistration.gov.in/ for the most updated information and guidance.
MSME Registration Process in India
The MSME Registration process is quick, simple, and straightforward. Applicants can visit the online MSME / Udyam portal, choose the registration type and continue with the application process. Providing the correct details of the applicant organisation and its owner, director, partner, or authorised signatory is crucial for a successful and hassle-free registration. Additionally, the applicant must be ready with the entire MSME Registration documents list beforehand to avoid any chaos later.
STEP
01
Determine the Turnover & Investment in Plant & Machinery
The MSME Registration process is linked with the Income Tax Portal; hence, if the applicant filed its ITR during the previous financial year, the turnover data and investment in plant and machinery will be automatically filled out. If the applicant has not filed the ITR, then the MSME category (Micro, Small, or Medium) will be determined based on the turnover or investment details provided by the applicant on self-declaration. Therefore, the first step is to determine the MSME’s turnover and investment.
STEP
02
Visit the MSME Registration Portal & Verify Aadhar with OTP
The next step is to visit https://udyamregistration.gov.in/ and click on the appropriate link for new enterprises that are not yet registered as MSMEs. On the next screen, the Aadhar and the Name of the Entrepreneur are to be filled out. The Aadhar number will be verified using an OTP sent to the linked mobile number. PAN, on the other hand, will be verified using the Income Tax / GST database integrated with the portal.
STEP
03
Fill details in the MSME Udyam registration form
Next, the applicant has to fill in details about the business and the entrepreneur. These include the name, address, type, and nature of the business activity, bank details, employee details, and so on. The particulars must be correctly filled in the application form for error-free MSME registration. After filling in all the particulars, the form is then submitted using Aadhaar OTP-based authentication.
STEP
04
Issuance of MSME Registration Certificate
After the MSME Registration form is submitted, a thorough examination is carried out by the concerned authorities at the MSME Ministry. After a successful examination, the authorities will issue an MSME Registration Certificate With MSME Registration Number written on it.
Benefits of MSME Registration.
MSME Registration for small businesses is a boon as it offers many benefits assisting their growth and development. Besides providing legitimate recognition to these businesses, MSME registration enables their enrollment in various favourable government schemes and initiatives. Most of these initiatives provide financial support to MSMEs during the initial stages of operation. A few prominent ones are mentioned below.
Financial Benefits
- Collateral-free loans
- Easier access to credit
- Subsidised interest rates
- Concessions on electricity bills
- Income Tax/GST benefits
- ISO certification reimbursement
- Stamp duty and registration fee waiver
Business Support
- Government tenders Preference
- Protection against delayed payments
- Marketing assistance
- Technology upgradation scheme
- Increased business opportunities
- Networking opportunities
Along with the Udyam Registration, enterprises may register on the Government e-Marketplace (GeM), a portal for government-to-business transactions, and the SAMADHAN portal, which addresses issues related to delayed payments. Simultaneously, MSMEs can also onboard on the TReDS Platform, where the invoices of receivables are traded, through three available platforms: 1. www.invoicemart.com 2. www.m1xchange.com 3. www.rxil.in.
MSME Registration Renewal / Update
The Validity of the MSME Registration Certificate extends for a lifetime. There is no requirement for MSME Renewal at regular intervals. However, registered MSMEs must update the net turnover and investment limits every financial year on a self-declaration basis. The requirement for such an update is provided under the notification dated 26th July 2020. The annual update of the MSME Registration is necessary for the correct categorisation of the MSME, as the refreshed data from the Income Tax Portal concerning the turnover and the investment in plant and machinery is likely to change the type of the MSME.
FAQs on MSME Registration
1. Is MSME online registration mandatory?
No, MSME registration is not mandatory, however strongly advisable for eligible enterprises. In order to avail the various MSME benefits and financial assistance offered by the Government, enterprises must have MSME Registration in India.
2. Are all Startups eligible for MSME Registration in India?
Yes, all startups are eligible for MSME Registration in India, provided they fall under the new definition of MSME. Startups eligible for MSME Registration include:
- Sole Proprietorships
- Partnership Firms
- Hindu Undivided Family
- Association of People
- Co-operative Societies
- Trusts
- Limited Liability Partnerships
- Companies
- Public Sectors Undertaking
3. What are the MSME registration fees in India?
No amount of MSME registration fees is charged by the Government. MSME Registration in India is online and absolutely free of cost.
4. What is the validity of the MSME Registration certificate?
The validity of an MSME Registration certificate extends for a lifetime without any requirement for MSME renewal. However, the net investment and net turnover must be updated every financial year on a self-declaration basis.
5. What is Udyog Aadhar?
Udyog Aadhar was a document issued to registered MSMEs for recognition under the old UAM system. The new Udyam Registration has replaced the UAM system. Thus, businesses with Udyog Aadhar must re-register to maintain their MSME status in India.
6. Are Udyam registration and SSI registration the same?
The meaning or definition of MSMEs and SSIs vary under law. For instance, businesses across sectors and industries can be classified as MSMEs. However, only manufacturing and service-based businesses can be classified as small-scale industries in India. Moreover, the threshold limits of investments are also different for the classification of MSMEs and SSIs.
7. What is the time taken for MSME registration?
Usually, it takes 1-2 working days from the date of the application for MSME registration.
8. What is the process for updating the MSME Registration?
According to the MSME notification dated 26th June 2020, net investment and turnover must be updated every financial year. The process is quite easy and can be completed on the MSME Portal itself. The details are updated on a self-declaration basis. For any assistance, contact our experts.
9. Do I need multiple MSME Registrations for multiple business activities?
No, a business can obtain only one MSME registration. There is no requirement for multiple MSME registrations, even if the business is carrying out multiple activities. However, all business activities and branches of the enterprise must be mentioned in the application for MSME registration.
10. Is MSME Renewal mandatory?
The MSME Registration Certificate has a lifetime validity, and no MSME renewal is required. However, recent MSME Registration guidelines suggest that the net turnover and net investment must be updated every financial year.