Overview of MSME Registration

MSMEs or Micro, Small, and Medium Enterprises contribute primarily to the socio-economic development of the country. MSMEs are governed by the Ministry of Micro, Small & Medium Enterprises in India and are also required to be registered under the MSMED or Micro, Small and Medium Enterprises Development Act to avail benefits. Registration of MSME is very important, as it allows these enterprises to avail benefits from the various schemes initiated by the government.

The MSME sector enterprises contributes to 45% of the total industrial employment of India, 50% of the Total Exports of India and 95% of all the industrial units of the country, and more than 6000 different types of products are manufactured in these industries units as per the data provided on the official website of MSMEs, i.e., msme.gov.in. When these industrial units grow, the economy of the country flourishes and grows. These industries are also known as small-scale industries or SSI’s.

What is MSME?

MSME stands for Micro, Small, and Medium Enterprises. According to the MSMED or Micro, Small, and Medium Enterprises Development Act of 2006, enterprises are classified into two types which are as follows:

• Manufacturing Enterprises are the enterprises that are engaged in the production or manufacturing of goods in the industry.
• Service Enterprises are the enterprises that are engaged in rendering or providing services.

How to register as MSME?

MSMEs can be registered by simply visiting https://msme.gov.in/online-application website of the government and filling the application form for MSME Registration. It’s an online portal provided by the government that helps in the MSME Registration process. The applicants can get the MSME Registration certificate with validity of lifetime in 2-5 working days. The certificate of MSME Registration is for both manufacturing and service sector enterprises. There is no limit prescribed with respect to the name used by any individual to register for new or already existing businesses.

What are the eligibility criteria for MSME Registration?

The difference between the manufacturing and services enterprises are removed by the recent Atma-nirbhar Bharat Abhiyaan Economic Package announced by the finance minister of India Nirmala Sitharaman. The annual turnover and investment amount are made similar for enterprises involved in both the manufacturing and service sectors. The existing and revised definitions of MSMEs are as follows:

Revised Definition and Limits of MSME: Criteria 2020

The benefits of MSME Registration in India are as follows:

• The bank loans provided to the MSMEs become extremely cheaper as the interest rate is very less, that is around 1 to 1.5%, once a person goes for Registration of MSME in India. The interest rate on loans is much lower than interest on regular loans.
• There are several tax subsidies offered to the MSMEs that are registered in India.
• The registered MSMEs are also allowed credit for MAT (Minimum Alternate Tax) to be carried forward for the time period of up to 15 years instead of 10 years;
• There are several government tenders that are only available for the MSME Industries.
• The MSME industries gets an easy access to credit.
• Once the MSME is registered, the cost receiving a patent is done, or the cost of setting up of the industry is reduced as many reimbursements and concessions are available to these industries.
• The businesses registered under MSMEs are given higher preference for government certification and license.
• For all non-paid amounts of MSMEs, there is a One Time Settlement Fee.

The procedure for MSME Registration is as follows:

• Fill the Application Form for MSME Registration

  First of all, the applicants are required to fill the necessary details required in the Registration application form for the Registration of MSMEs and then submit the application form for Registration to the concerned department. The step of filing of the application form can be begun either online or offline.

• Preparation of the Required Documents

  Gather and collect all the required documents as prescribed in the MSME Registration Application form. Usually, the process of collecting all the needed documents takes about 1 to 2 working days to reach the next Registration step.

• Filing of the Application Form for MSME

  The applicant is required to upload the necessary documents and submit the application form to the Registrar of MSME. The regulatory authorities do the processing and verification of the authenticity or validity of the documents submitted by the applicant. This verification and processing take around another 2 working days.

• Application Approval and Certificate Issuance

  After the regulatory authorities are satisfied with the documents and other submissions made by the applicant, the company of the applicant gets registered under the MSME.

Who is eligible to apply for MSME Registration in India?

Any person who successfully accomplishes one or multiple of the criteria mentioned below is qualified and eligible to apply for MSME registration in India:

• Any person who is part of a Hindu Undivided family;
• Any person who has a limited liability partnership;
• Any person who owns a partnership firm having another party as his/her association;
• Any person who is a sole proprietor;
• Any person who is an owner of a One Person Company;
• Any person who has a private limited company;
• Any person who owns a production company which is actively involved in the production of materials.
• Any person who is having co-operative societies.

Who has the power to issue the certificate for MSME Registration in India?

In India, MSME Registration is done online. Every state in India owns a separate department for MSMEs. For the Registration of MSMEs, the District Industries Centre (DIC) is responsible in India. The District Industries Centre (DIC) department has the authority to issue the certificate for MSME Registration. The department also issues a MSME Number with the certificate of MSME Registration in India.

If any person wants to get his/her MSME Registration done, he/she is required to contact the nearby District Industries Centre (DIC) department.