What is MSME (Micro, Small, and Medium Enterprise)?
MSME (Micro, Small, and Medium Enterprises) describes businesses that adhere to certain size specifications. These types of companies play a significant role in many economies around the world, as they are a major source of employment and contribute to overall economic growth.
In India, MSMEs are categorized according to the amount invested in plant and machinery or equipment. The Micro category includes businesses where the investment does not exceed INR 1 crore (approximately USD 140,000), the Small category includes businesses where the investment is more than INR 1 crore but does not exceed INR 10 crore (approximately USD 1.4 million), and the Medium category includes businesses where the investment is more than INR 10 crore but does not exceed INR 50 crore (approximately USD 7 million).
MSMEs in India have access to several government schemes and programs aimed at providing financial and non-financial support for their growth and development. These include initiatives such as credit guarantee schemes, technology upgradation programs, and marketing assistance, among others.
In addition to providing employment opportunities and contributing to economic growth, MSMEs also play a vital role in promoting entrepreneurship and innovation. These types of businesses often have the flexibility to adapt quickly to changing market conditions, making them well-suited for the rapidly evolving business landscape in many countries.
MSME Registration Online in India
In India, MSME registration can be done online through the government's Udyam Registration portal. This portal was launched in July 2020 and is designed to make it easier for MSMEs to register and access government schemes and programs.
To register as an MSME online, business owners need to visit the Udyam Registration portal and create an account. The registration process requires some basic information about the business, such as its name, type of organization, PAN number, Aadhaar number, and contact details.
Once the registration is complete, the business will receive a unique Udyam Registration Number (URN) and a certificate of registration. This certificate does not require to be renewed as it is valid for a lifetime. However, businesses must update their registration information if there are any changes to their business, such as a change in ownership or address.
The benefits of registering as an MSME in India include access to various government schemes and programs, such as credit guarantee schemes, technology upgradation programs, and marketing assistance. MSMEs can also avail of priority lending and tax exemptions under certain conditions.
Key Benefits of MSME Registration for Businesses
Registering as an MSME (Micro, Small, and Medium Enterprise) in India can bring numerous benefits to businesses. Some of the key benefits of MSME registration are:
Access to government schemes and programs: Registered MSMEs are eligible for various government schemes and programs that provide financial and non-financial support. These schemes include marketing support, technology upgrade program, and credit guarantee schemes, among others.
Priority sector lending: MSMEs are considered as a priority sector for lending by banks and other financial institutions. This makes it easier for MSMEs to obtain loans and credit facilities at lower interest rates than other businesses.
Tax exemptions: MSMEs can avail of several tax exemptions and benefits under various government schemes. For instance, they may be eligible for tax refunds, subsidies, and other incentives that can help reduce their overall tax burden.
Brand recognition: It enhances the reputation and brand recognition of a company. Additionally, It can assist in building trust and authority with customers, suppliers, and other stakeholders.
Access to new markets: MSME registration can help businesses in emerging new markets and expand their customer base along with opening up opportunities for partnerships and alliances with other MSMEs, thereby enhancing business growth.
Regulatory compliance: MSME registration ensures that a business complies with all regulatory requirements and guidelines. This can help in avoiding legal issues and penalties.
Indian Government MSME Schemes
The Indian government has launched several schemes to support MSMEs (Micro, Small, and Medium Enterprises) in the country. Some of the key MSME schemes are:
Prime Minister’s Employment Generation Programme (PMEGP): This scheme's objective to set up employment opportunities in rural and urban areas by generating new enterprises. The scheme provides financial support for announcing new enterprises or expanding existing ones. The maximum loan amount is up to INR 25 lakhs for manufacturing units and up to INR 10 lakhs for service units.
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE): This scheme provides MSME credit without collateral through banks and financial institutions. Under this scheme, a credit guarantee is provided to the lending institution up to 75% of the loan amount. This helps in improving the flow of credit to MSMEs, especially those that do not have collateral to offer.
Technology Upgradation Fund Scheme (TUFS): This scheme provides financial assistance to MSMEs for upgrading their technology and modernizing their machinery. The scheme aims to increase the competitiveness of MSMEs in the global market by improving their quality and productivity.
National Small Industries Corporation (NSIC) Subsidy: This scheme provides a subsidy of up to 15% to MSMEs for procuring machinery and equipment. The subsidy is provided to MSMEs that have obtained an MSME registration certificate and are working in specific industries.
Entrepreneurship Development Programme (EDP): This scheme provides training and skill development programs to individuals who want to start their own business. The program provides training in various aspects of entrepreneurship, including business planning, financial management, marketing, and more.
In addition to the above, there are several other schemes such as the Cluster Development Program, Lean Manufacturing Competitiveness Scheme, and Marketing Assistance Scheme, among others, aimed at supporting MSMEs in India.
Documents Required For MSME Registration
MSME (Micro, Small, and Medium Enterprises) registration in India is a simple and easy process that can be done online. The following are the documents required for MSME registration:
Aadhaar card of the proprietor, partner, or director
PAN card of the business
Business Address Proof including rent agreement, electricity bill, or property tax receipt.
Bank Account Details of the business including the name of the bank, branch name, account number, and IFSC code.
Business Registration Certificate for partnership firms, the partnership deed is required.
GST Registration Certificate
Business Incorporation Certificate
SSI Registration Certificate
Application Process for MSME Registration
The application process for MSME (Micro, Small, and Medium Enterprises) registration in India is now entirely online. Here is a step-by-step guide to the application process:
Step 1: Visit the Udyam Registration portal
Step 2: Click on the 'For New Entrepreneurs who are not registered yet as MSME' button
Step 3: Enter your Aadhaar card number and the name as mentioned on the Aadhaar card.
Step 4: Click on 'Validate and Generate OTP' to receive a one-time password (OTP) on your registered mobile number.
Step 5: Enter the OTP and click on 'Verify OTP'.
Step 6: Enter your personal details, such as name, gender, category, and disability status.
Step 7: Provide your business details, such as PAN (Permanent Account Number), business name, type of organization, and address.
Step 8: Provide additional details, such as the number of employees and investment in plant and machinery or equipment.
Step 9: Upload the necessary documents, such as the Aadhaar card, PAN card, and business address proof.
Step 10: Click on 'Submit' to complete the application process.
Conclusion:
This article tells about the MSMEs (Micro, Small, and Medium Enterprises) that are vital to the economy, providing employment and contributing to overall growth in many countries, including India. MSME registration can be done online through the government's Udyam Registration portal, providing businesses with a unique registration number and a certificate that is valid for a lifetime. Also The Indian government has launched several schemes to support MSMEs. MSME registration is essential for businesses looking to take advantage of government support schemes and establish their reputation and authority with customers, suppliers, and stakeholders.
profile, V. (2023, February 20). MSME Registration - How to get MSME Certificate Online in India? MSME Registration - How to Get MSME Certificate Online in India? https://legal-consulting-services.blogspot.com/2023/02/msme-registration-how-to-get-msme.html