MSME REGISTRATION

MSME Registration In India : Procedure,

Documents Required
MSME industries are the backbone of the economy. They are also
known as Small Scale Industries (SSIs). The government of India
provides an MSME registration to the industries classified by the
government as Micro, Small and Medium Enterprises (MSME) in India.
The MSME registration helps MSMEs to obtain various benefits
provided by the government for their establishment and growth.

What is MSME Classification?

Initially, when the government introduced the MSME registration in
2006, the MSME classification was based on the investment criteria in
plant and machinery or equipment. The government revised the MSME
classification by inserting annual investment and annual criteria. Also,
the distinction between the manufacturing and the services sectors
under the MSME definition was removed

The following is the current revised MSME classification, where the

investment and annual turnover are to be considered for deciding if
an entity is considered as an MSME:

Revised MSME Classification

Criteria Micro Small Medium*
Investment & Annual < Rs.1 crore & < < Rs.10 crore & < < Rs.50 crore & <
Turnover Rs.5 crore Rs.50 crore Rs.250 crore

What is MSME Udyam Registration?

MSME registration is also called Udyam registration. The entities that
fulfil the MSME classification can apply for MSME registration from the
government portal, the Udyam portal. The MSME registration is
entirely online and can be obtained from the Udyam registration
portal. It is not mandatory for MSMEs to obtain this registration, but it
is beneficial to get one’s business registered under this because it
provides a lot of benefits in terms of taxation, setting up the business,
credit facilities, loans etc.

MSME Registration Eligibility

All manufacturing, service industries, wholesale, and retail trade that
fulfil the revised MSME classification criteria of annual turnover and
investment can apply for MSME registration. Thus, the MSME
registration eligibility depends on an entity’s annual turnover and
investment. The following entities are eligible for MSME registration:

• Individuals, startups, business owners, and entrepreneurs

• Private and public limited companies
• Sole proprietorship
• Partnership firm
• Limited Liability Partnerships (LLPs)
• Self Help Groups (SHGs)
• Co-operative societies
• Trusts

Documents Required for MSME Registration

For promoting entrepreneurship, the government provides special
benefits to small businesses in the form of subsidies and incentives.
Also, banks give loans at concessional rates to set up these businesses.
For availing those, the small businesses need to register under the
Micro, Small and Medium Enterprises (MSMEs) act.
If a business is registered under the MSMEs act, it can avail several
benefits like cheaper bank loans, tax benefits, preference during the
tender process, and access to various schemes and incentives of the
government.

MSME Enterprises
The old MSME classification was based on the criteria of investment in
plant and machinery or equipment. So, to enjoy the MSME benefits, the
MSMEs had to limit their investment to a lower limit, as mentioned
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 were killing the urge to grow as they were unable to
scale their businesses further. Also, there was a long-pending demand
for the revision of MSME classification so that they can further expand
their operations while continuing to avail the MSME benefits.

Thus, under the Aatmanirbhar Bharat Abhiyan (ABA), the government

revised the MSME classification by inserting composite criteria of both
investment and annual turnover. Also, the distinction between the
manufacturing and the services sectors under the MSME definition was
removed. This removal created parity between the sectors.

The following is the revised MSME classification, where the investment

and annual turnover, both are to be considered for deciding an MSME:
Revised MSME Classification

Criteria Micro Small Medium*

Investment & < Rs.1 crore & < Rs.10 crore & < Rs.50 crore & <
Annual Turnover < Rs.5 crore < Rs.50 crore Rs.250 crore

Documents Required
The Udyam registration process is entirely online and does not require
the uploading of any documents. However, before applying for Udyam
Registration, the proprietor or owner of the enterprise is required to
have the following documents:

• Aadhar Card
o In the case of a Proprietorship Firm, the Aadhar number of
the proprietor is to be entered in the Udyam Registration
form.
o In the case of a Partnership Firm, the Aadhar number of the
managing partner is to be entered in the Udyam Registration
form.
o In the case of a Hindu Undivided Family (HUF), the Aadhar
number of the Karta is to be entered in the Udyam
Registration form.
o In the case of a Company or Limited Liability Partnership or a
Cooperative Society or a Society or a Trust, the Aadhar
number of the organisation or authorised signatory is to be
entered in the Udyam Registration form.
• PAN Card
• GSTIN (GST Identification Number), if the enterprise is required to
be registered under GST Law.

Note: Having GSTIN is not compulsory for enterprises that do not

require a GST registration under the GST law. Such enterprises can
register under MSME without having a GST registration. However,
the enterprises that need to compulsorily obtain GST registration
under the GST regime must have GST registration for obtaining
MSME/Udyam Registration.
There are no MSME registration fees and it does not require proof of
documents. PAN and GST-linked details on investment and turnover of
enterprises will be taken automatically by the Udyam Registration
Portal from the Government databases since the portal is integrated
with Income Tax and GSTIN systems.

GST registration is not compulsory for enterprises that do not require

a GST registration. However, enterprises that mandatorily need to
obtain GST registration under the GST law, must enter their GSTIN for
obtaining the MSME Registration or Udyam Registration.

How to Apply for MSME Registration on Udyam

Registration Portal?
The MSME registration process is entirely online. MSME online
registration is to be done on the government portal of
udyamregistration.gov.in. There is no MSME registration fee charged
for registration. MSME registration online can be done under the
following two categories in the portal –

1. For New Entrepreneurs who are not Registered yet as MSME or

those with EM-II and
2. For those having registration as UAM and For those already
having registration as UAM through Assisted filing

For New Entrepreneurs who are not Registered yet as

MSME or those with EM-II
Step 1: New entrepreneurs and entrepreneurs having EM-II registration
need to click the button “For New Entrepreneurs who are not
Registered yet as MSME or those with EM-II” shown on the home page
of Udyam Registration Portal.

Step 2: On the next page, enter the Aadhaar number and the name of
the entrepreneur and click on the “Validate and Generate OTP Button”.
Once this button is clicked and OTP is received and entered, the PAN
Verification page opens.
Step 3: The entrepreneur must enter the “Type of Organisation” and
the PAN Number and click on the “Validate PAN” button. The portal
gets the PAN details from the government databases and validates the
PAN number of the entrepreneur.

Step 4: After verification of PAN, the Udyam Registration form will

appear, and the entrepreneurs need to fill in their personal details and
details of their enterprise.
Step 5: Enter the investment and turnover details, select the
declaration, and click on the “Submit and Get Final OTP” button. The
OTP is sent, and after entering the OTP and submitting the form, the
Udyam Registration Certificate will be sent through email.
Entrepreneurs can also find out the MSME registration status from the
Udyam Registration Portal.
Registration For Entrepreneurs Already Having
UAM
For those already having UAM registration, they need to click the
button “For those having registration as UAM” or “For those already
having registration as UAM through Assisted filing” shown on the home
page of the government portal. This will open a page where Udyog
Aadhaar Number is to be entered, and an OTP option should be
selected.

The options provided are to obtain OTP on mobile as filled in UAM or

obtain OTP on email as filled UAM. After choosing the OTP Options,
“Validate and Generate OTP” is to be clicked. After entering OTP,
registration details are to be filled on the MSME registration form, and
Udyam registration will be complete.
MSME Registration Fees
There are no fees charged by the government for MSME registration. It
is free of cost on the official website, i.e. Udyam Portal.

MSME Registration Certificate

The Ministry of MSME issues an e-certificate known as the Udyam
Registration Certificate to MSMEs in India. The Udyam registration
certificate is known as the MSME registration certificate. The
entrepreneurs receive the MSME registration certificate upon
completion of the MSME registration process. The certificate will
contain a QR Code, from which the enterprise details can be accessed.

MSME Registration Number

An enterprise having an MSME registration is known as Udyam, and the
permanent identity number assigned to by the Ministry of MSME is
known as the ‘Udyam/MSME Registration number’. The MSME
Registration Certificate will contain the 19-digit MSME/Udyam
Registration Number.
MSME Registration Status
Below is the process to check MSME Registration Status:

• Visit the Udyam registration portal.

• Click on the ‘Print/Verify’ option and click on the ‘Verify Udyam
Registration Number’ option.
• Enter the ‘Reference Number’, enter the captcha code and click
on the ‘Verify’ button.

MSME Registration Certificate Download

Below is the process to download the MSME Registration Certificate:

• Visit the Udyam registration portal.

• Click the ‘Print/Verify’ option and select the ‘Print Udyam
Certificate’ option.
• Enter the ‘Udyam Registration Number’, ‘Mobile’, choose the OTP
option and click on the ‘Validate & Generate OTP’ button.
• Enter the OTP received on the mobile/email and click on the
‘Validate OTP and Login’ button.
• After logging in, take a printout of the Udyam registration
certificate.

MSME Registration Benefits

Below listed are the MSME registration benefits:

• Due to MSME Registration India, bank loans become cheaper as

the interest rate is very low, around 1-1.5%, much lower than
interest on regular loans
• It also allowed credit for minimum alternate tax (MAT) to be
carried forward for up to 15 years instead of 10 years
 • Once registered the cost of getting a patent done, or the cost of
setting up the industry reduces as many rebates and concessions
are available
• MSME registration helps to acquire government tenders easily as
Udyam Registration Portal is integrated with Government e-
Marketplace and various other State Government portals which
give easy access to their marketplace and e-tenders
• There is a One Time Settlement Fee for non-paid amounts of
MSME
• The MSME registration will help the MSMEs in availing the
benefits of government schemes such as the Credit Guarantee
Scheme, Credit Linked Capital Subsidy Scheme, Public
Procurement Policy, Protection against delayed payments, etc.
• MSMEs are eligible for priority sector lending from banks
• MSMEs get the benefit of a government security deposit waiver
that is helpful while participating in e-tenders
• Any number of activities, including service or manufacturing or
both, may be added or specified in one MSME registration
• Barcode registration subsidy
• Exemption scheme from direct taxes
• ISO certification fees reimbursement
• Electricity bills concession
• Special consideration in International trade fairs

How to check MSME registration by name?

You cannot check the MSME registration number by name. However,
you can retrieve your MSME registration number by following the
below process:

• Visit the Udyam Registration Portal.

• Click on the ‘Forgot Udyam/UAM No.’ option under ‘Print/Verify’
option on the homepage.
• Choose the registration option.
• Choose the OTP option
• Enter the mobile/email address
• Click on the ‘Validate & Generate OTP’ button.
• Enter the OTP. The MSME registration number will be displayed.