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MSME stands for Micro, Small and Medium Enterprises. In a developing country like India, MSME industries are the backbone of the economy. When these industries grow, the economy of the country grows as a whole and flourishes. These industries are also known as small-scale industries or SSI’s.
This registration is not yet made mandatory by the Government 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. The Micro, Small and Medium Enterprises are considered as a very significant piece of India’s legacy economic model and a part of the critical supply chain for products and services. This sector is the job creator as well as play a crucial role in providing large-scale employment and industrialization of rural and backward areas. In 2015-2016, according to the National Sample Survey (NSS) 73rd round, there were around 633.8 lakh unincorporated non-agriculture enterprises in the country which are dealing in different economic activities providing employment to 11.10 crore workers.
The MSME became operational on October 02, 2006. It was established to promote, facilitate and develop the competitiveness of the micro, small and medium enterprises. Small scale businesses play a vital role in improving the economy of any country. To encourage new and existing business, the government of India has launched many schemes to help small and medium scale businesses to sustain and grow. To avail all these beneficial schemes, you need to get your MSME registration done. MSME registration is also known as Udyog Aadhaar or SSI registration.
An industry owner before applying for the registration for MSME should know the requisites to classify his company and must file his application in that category only in order to avoid any cumbersome technicalities. As a result of this, Government of India has come up with a set of rules and regulations for the industries in order to classify them. The classification is mentioned below:
Under the Aatmanirbhar Bharat Abhiyan (ABA), the government revised the MSME classification by inserting composite criteria of both investment and annual turnover. On 01 June 2020, the Finance ministry revised the criteria for annual turnover and investment to be eligible under MSME registration.
Any enterprise or entity would be classified as a Micro-enterprise, if the investment in plant and machinery is not more than Rs. 1 Crore and the turnover is not more than Rs. 5 Crore.
Any enterprise or entity would be classified as a small enterprise, if the investment in plant and machinery is not more than Rs. 10 Crore and the turnover is not more than Rs. 50 Crore.
Any enterprise or entity would be classified as a Medium enterprise, if the investment in plant and machinery is not more than Rs. 50 Crore and the turnover is not more than Rs. 250 Crore. As per the government, this notification has come into effect on 01 July 2020. Hence all enterprises should satisfy the above turnover criteria to be classified under the definition of Micro, Small and Medium Enterprises.
The process of MSME registration can either be carried out offline or online. The applicant would have to fill in the application form with all details. After filing the application form the requisite documentation have to be prepared.
In the next step, the applicant is required to submit all the requisite documentation for the MSME application. All information asked for should be submitted as per the requirements for MSME registration. It takes about three working days for the documentation to be processed.
After providing the documents; the applicant is required to submit the same. Usually this would take about two to three working days for submitting the documentation. When the documents are submitted, the authority will verify the same along with the application.
In the final step, the authority will verify the documentation. If all the documents meet the requirement of verification, the same will be accepted. The certificate of registration will be issued to the applicant.
Aadhar Card: A Copy of proprietor’s Aadhar card or of director(s) or partner(s) in other cases like Udhyog Aadhar Registration
PAN card: A Copy of PAN card of the business entity; and of director or partner, if applicable.
Provisional MSME Registration
This is given for entities which are yet to begin functioning. With provisional registration the MSME can:
A PRC (provisional registration certificate) is allotted to new enterprises without any field enquiry and is valid for 5 years.
Permanent MSME Registration
It is given to industrial units that are already functioning. All the benefits available to MSMEs can be availed by them.
The following conditions have to be met for getting a permanent registration:
The following are the major benefits given to registered MSMEs under the Micro, Small & Medium Enterprises Development (MSMED) Act:
There are many other benefits under the Act and benefits are introduced through annual budgets as well.
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By Admin Taxupp