What is an MSME/SSI/Udyam Registration?

The Micro, Small and Medium Enterprises (MSME) are considered essential for our Indian Economy as this sector not only acts as a job creator for our youth but also plays a crucial role in the Industrialization of the Rural and Backward areas. An MSME Registration is obtained as per the MSMED Act. However, obtaining registration is not at all mandatory, but it shall be taken into consideration that the businesses or entity with MSME Registration are eligible to avail the benefits and schemes made by the Government.
Examples of such benefits are exemption from the Direct Tax, Private-Sector lending, exemption from Excise Duties, power tariff subsidies, capital investment subsidies. Some of the prominent and well-known MSMEs in India are DFM Foods, Ankur Scientific Energy Technologies, Molecular Connections, SL Packaging, Chem Process System, Mynd Solutions, etc.
Further, MSMEs and SSIs (Small Scale Industries) are eligible to obtain registration under the MSMED Act. Furthermore, according to the MSMED (Micro Small and Medium Enterprise Development) Act, 2006, the term MSME includes the following two listed:

Service Enterprise
This Industry is mainly engaged in providing services to other industries.
Manufacturing Enterprise
This Industry is engaged in manufacturing activities.
However, the same distinction has been eliminated by the Ministry of Finance by way of an announcement made on May 13, 2020.

What is a Micro Small and Medium Enterprise?

As per the MSMED Act, 2006, MSMEs and SSIs were enacted to strengthen and boost the Small-Scale sector in India. Earlier, both Service and Manufacturing were considered distinct and separate from each other, having different amount prescribed for the Investment Required.
However, as per the latest amendment made in the definition of MSME by the Ministry of Finance, the difference between the manufacturing and service sectors has been eliminated, Investment Limits have been Revised, and a Turnover Criteria has been introduced. This amendment was announced by our Finance Minister, Mrs. Nirmala Sitharaman, on 13 May 2020. The following listed are considered as MSMEs under the MSMED Act, 2006:

Micro-Enterprise

Type of Industries
Type of Investment
Investment Amount
Turnover Amount
Manufacturing and Service Sector
In Plant and Machinery
Less than Rs 1 Crore
Less than Rs 5 Crore
Small-Enterprises
Types of Industries
Type of Investment
Investment Amount
Turnover Amount
Manufacturing and Service Sector
In Plant and Machinery
Rs 1 Crore to Rs 10 Crore
Rs 5 Crore to Rs 50 Crore
Medium Enterprises
Types of Industries
Type of Investment
Investment Amount
Turnover Amount
Manufacturing and Service Sector
In Plant and Machinery
Rs 10 Crore to Rs 20 Crore
Rs 50 Crore to Rs 100 Crore

Benefits of MSME Registration in India

Although obtaining MSME Registration is not mandatory for the MSMEs dealing in service and Manufacturing Sector. However, one cannot avail the benefits or the advantages offered after obtaining MSME Registration. The following listed are the benefits of Online MSME Registration:
Any company which holds an MSME Registration is able to obtain loans from banks at a comparatively cheaper rate, approximately 1- 1.5 percent. This is much lower than the normal bank rates.
Various Tax Rebates and Exemptions are provided to MSMEs.
MSMEs are permitted to carry forward the credit for MAT (Minimum Alternate Tax) up to a period of 15 years, which in the general case is ten years.
There are various tenders available only for the industries having registration in MSME Act.
MSME receives easy credit facility from various Financial Entities.
Industries having registration in MSME Act are given higher preference in comparison to normal industries.
Companies or the industries holding an MSME Certificate have better growth opportunities as they get direct entry in major national and international trade fairs and also have better occasions to present themselves to the world.
MSMEs are qualified to obtain Collateral free loans as banks do not accept any collateral security for the loan amount up to Rs 10 Lakhs.
Industries having registration under MSME are qualified to get reimbursement of ISO Certification.

Eligibility Criteria for Register an MSME/SSI in India

To become eligible for obtaining MSME Registration, the owner is required to invest less than Rs 20 Crores and must have a turnover of less than Rs 100 Crore (as per the amendment made on 13 May 2020) in plant and machinery either for a Manufacturing or Service Sector.
If, at any point in time, these industries exceed the investment limit, then they are required to surrender or cancel their MSME Registration provided under the MSMED Act.

Who can Apply for Registration under MSME Act?

Anyone who can fulfill either one or multiple criteria mentioned below are eligible to apply for registration under the MSME Act:
You have a Limited Liability Partnership.
You are a part of the Hindu Undivided Family.
You are a Sole Proprietor
You are an owner of One Person Company.
You own a Production Company that with the production of materials
You have a Private Limited Company
You have Co-operative Societies.

Significance of MSME Registration for SSI

The points that deals with the significance of MSME Registration is mentioned below:
Obtaining MSME registration is essential for organizations, as it brings both credibility and clarity in the functioning of the entity.
If in case anyone is planning to start an MSME anywhere in India, then, in this case, the MSME department authorized by the Indian Government will help in the promotion of his or her enterprise.
Registration in MSME is a must for availing benefits such as incentives, subsidies and bank loans.

Documents Required for MSME Registration

The documents needed for obtaining online MSME Registration are as follows:
PAN Card Details of the proprietor/ all the directors/all the partners.
Aadhar Card Details of the proprietor/all the directors/all the partners.
Proof of ownership of the place being used as a Registered Office such as the Allotment Letter/Lease Agreement/Possession Letter/Property Tax Receipt.
If in case the place being used is a rented premise, then the Rent Agreement with the No-Objection Certificate (NOC) from the landlord together with the utility bill.
Copy of Purchase Bill of every raw material purchased.
Copy of Sale Bill for each end product.v A Copy of Partnership Deed in the case of a Partnership Firm.
Copy of Memorandum of Association (MOA) and Articles of Association (AOA) and Certificate of Incorporation (COI) in the case of Private Limited Company together with the Board's Resolution passes authorizing the director to sign the application.
Copy of the Industrial License as acquired under the Industrial Development and Regulation Act, 1951.
An affidavit on Rs. 10/-Non-Judicial Stamp Paper duly attested by the Notary Officer declaring the Power Requirement and the Status of the Machinery Installed etc.
Purchase Bill of the Machinery Installed.
Bills relating to Purchasing and Installation of plant and machinery.
Bank Account Statement.

Procedure for MSME/Udyog Aadhaar Registration

The steps involved in the process of obtaining MSME Registration are mentioned below:
Fill the MSME Form
In the first and foremost step, the applicant is required to fill the application form with all the required details. After that, the applicant is required to submit the form to the concerned MSME department. This step can be commenced either offline or online.
Prepare all the required Documents
Now, in the next step, the applicant is required to prepare all the documents needed for obtaining MSME Registration. Such documents should be according to MSME Registration application Form. Usually, this process takes about two to three working days to reach the next step.
Filing the MSME Application
In the third step, the applicant is required to upload all the needed documents and submit the application to the MSME Registrar. Then the regulatory authorities will process and verify the authenticity and genuineness of all the documents in the next two working days.
Approval of Application and the Issuance of Certificate
After the successful verification of all the documents submitted, the regulatory authorities will issue the Certificate of Incorporation to the company. Hence, the said company will be considered as registered under the MSME.

Who has the Authority to Issue MSME Registration Certificate?

The process of obtaining MSME registration is entirely done online, and every state has its own separate department to deal with this. Further, the DIC (District Industries Centre) is responsible for MSME registration. The DIC department also has the power to issue the MSME Registration Certificate along with the MSME Number.

What are the Details be submitted for MSME Registration in the Application Form?

Following are the list of documents and information that you have to provide as per the application form:
Aadhar Card Details
Owner’s name as per the Aadhar Card
Social category- whether the said applicant belongs to the General, OBC, SC or ST category
Gender
Physical status- whether the concerned applicant is physically disabled or not
Name of the enterprise
Type of enterprise- select from the provided list.
PAN (Permanent Account Number) Card Details
Location of the Plant
Address of the Plant
Incorporation Date of the Entity
Previous Registration Details- if in case any
Bank details
The Activity of Enterprise
NIC Code
Employment Information- Total Number of Employees working in the organization
Investment Details in Plant and Machinery

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