MSME Registration: Everything You Need to Know
MSME stands for Micro, Small and Medium Enterprises. They are the backbone of the Indian economy, accounting for over 90% of the country’s industrial output and employing over 80% of the workforce.
MSME registration is a process by which a business is classified as an MSME. This classification is important because it entitles the business to a number of benefits and schemes offered by the government, such as financial assistance, tax breaks, and preferential treatment in government procurement.
The MSME registration process is now completely online and free of cost. It can be done through the Udyam Registration portal, which is the official website of the Ministry of Micro, Small and Medium Enterprises (MSME).
Classification of MSME
The Micro, Small and Medium Enterprises (MSME) are classified into three categories based on the investment in plant and machinery and the annual turnover:
- Micro enterprise – Investment in plant and machinery does not exceed Rs. 1 crore and annual turnover does not exceed Rs. 5 crore.
- Small enterprise – Investment in plant and machinery exceeds Rs. 1 crore but does not exceed Rs. 10 crore and annual turnover exceeds Rs. 5 crore but does not exceed Rs. 50 crore.
- Medium enterprise – Investment in plant and machinery exceeds Rs. 10 crore but does not exceed Rs. 50 crore and annual turnover exceeds Rs. 50 crore but does not exceed Rs. 250 crore.
Documents required for MSME Registration
The following are some of the common documents that are required:
- Aadhaar card of the proprietor/partner/director
- PAN card of the proprietor/partner/director
- GSTIN (if applicable)
- Proof of business registration or incorporation certificate (if applicable)
- Address proof of the place of business
- Bank Account number and IFSC code
Process of MSME Registration
Here are the steps on how to register your MSME online after collecting all the required documents:
1. Go to the Udyam Registration portal.
2. Click on the “Register Now” button.
3. Enter your Aadhaar number and name of Enterpreneur
4. Verify by OTP.
5. Enter your PAN number and verify PAN
Fill up the following details given below –
- Mobile number and Email ID
- Business name and type.
- Address of the business establishment.
- Information about the proprietor, partners, or directors, including their identity and address proof details.
- PAN card of the business entity.
- Financial details such as the investment in plant and machinery or equipment and annual turnover.
- Bank Account details
- National Industrial Classification (NIC) Code for Activities
- Date of Incorporation/registration.
Benefits of MSME Registration –
Here are some of the key advantages of MSME registration:
1. Access to Government Schemes and Incentives:
- MSMEs registered with the government are often eligible for various government schemes and incentives. These schemes may include financial assistance, subsidies, and grants to promote business growth and development.
2. Lower Interest Rates on Loans:
- Registered MSMEs can typically avail loans at lower interest rates compared to non-registered businesses. This makes it easier for MSMEs to secure financing for expansion, working capital, or capital investment.
3. Collateral-Free Loans:
- Many financial institutions offer collateral-free loans to registered MSMEs, reducing the burden of providing assets or property as collateral for borrowing capital.
4. Credit Guarantee Fund Scheme:
- Some countries have credit guarantee schemes that provide a safety net for financial institutions, encouraging them to lend to MSMEs without undue risk. MSME registration often facilitates access to these schemes.
5. Preference in Government Procurement:
- Governments often give preference to registered MSMEs in their procurement processes. This means that MSMEs may have an advantage when competing for government contracts and tenders.
6. Subsidies for Technology Upgradation:
- MSME registration can make businesses eligible for subsidies and support for upgrading their technology and machinery, increasing their competitiveness in the market.
7. Priority in Government Registrations and Licenses:
- In some cases, registered MSMEs may receive priority in obtaining various licenses and permits, expediting their business operations.
8. Tax Benefits and Concessions:
- Some countries provide tax incentives and concessions to registered MSMEs, reducing their tax liability and increasing profitability.
9. Enhanced Credibility and Trust:
- MSME registration can enhance a business’s credibility and trustworthiness in the eyes of customers, suppliers, and financial institutions, potentially leading to more business opportunities.
If you need any help in MEME Registration feel free to reach us at 9024915488.
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