MSME & UDYAM Registration

MSME stands for Medium, Small and Micro Enterprises which is governed by the MSME Act. MSMEs are considered as the backbone of our economy because when this sector grows, the whole economy of the country grows and flourishes. The government, therefore, has taken various steps to resolve the financing and cash flow situation faced by the MSME sector. MSME sector has created approximately 12 crore jobs across the country and contributes 29% to the Indian GDP which is even expected to grow more in the future given the government’s “Make in India” initiative.

The MSME sector was established to promote, develop and facilitate the competitiveness of smaller businesses in the economy. A business, whether in the manufacturing line or the service line, can register under the MSME act. It is not mandatory to take registration under MSME but it is advantageous for a business to get itself registered under MSME, because it provides various benefits in terms of setting up of business, credit facilities, loans, taxation etc.

Every Micro, Small or Medium must enrol itself for issuance of Udyog Aadhar, this enrollment is valid for lifetime and can be obtained by those units or enterprises which have already started operations and not for the enterprise which is planned to be started.

MSMEs or the micro, small and medium enterprises are the backbone of any country's economy. The micro, small and medium enterprises include businesses like smaller industries in the country. They include the rural and agricultural industries of the country as well. They might also deal with the regular goods which we use in our day-to-day life. It must be considered that the micro, small and medium enterprises are the types of industries that regulate the financial conditions of the country as a whole. A businessman owns the structure of doing the business. In order to come under the MSME sector one has to register and get a MSME certificate. New business people do not understand these government MSME processes and the best MSME registration consultant - MSME Registrar will help throughout your business journey. MSMEs have to work hard in order to fulfil every role in their organizations.

Who can apply for Udyam Registration?

All manufacturing, service industries, wholesale, and retail trade that fulfil the revised MSME classification criteria of annual turnover and investment can apply for MSME registration. Thus, the MSME registration eligibility depends on an entity’s annual turnover and investment. The following entities are eligible for MSME registration:

• Individuals, startups, business owners, and entrepreneurs.
• Private and public limited companies
• Sole proprietorship
• Partnership firm
• Limited Liability Partnerships (LLPs)
• Self Help Groups (SHGs)
• Co-operative societies
• Trusts
• One Person Company (OPC)

Criteria for MSME Udyam Registration is in terms of Investment & Turnover of the Enterprise you belong

Any manufacturing enterprise or service rendering enterprises can register themselves as a micro, small and medium enterprise if they satisfy the composite threshold limit mentioned below :-

• Classification :-                             Micro                                       Small                                    Medium
• Investment* and Turnover :- less than 1 crore and less than 5 crore    less than 10 crore and less than 50 crore    less than 50 crore and less than 250 crore

*Investment – The original value (Purchase Price) of Plant and Machinery or Equipment is to be considered while calculating the amount of Investment.

Advantages Of MSME

• Under the MSME Credit Scheme, MSMEs registered under GST can get 2% interest subvention from the Government for incremental loans upto Rs. 1 crore (Budget 2019).
• More than 2900 specialized MSME branches of PSU banks to provide credit to MSME sectors
• A fund of funds with a corpus of INR 10,000 crore is to be set aside for equity investment into MSME.
• Collateral free loans of INR 3 trillion
• Working capital in the form of subordinated debts which shall be treated as quasi equity and fully guaranteed by Credit Guarantee Scheme Trust for Medium and Small Entrepreneurs
• Only Indian companies (including MSMEs) to participate in Government tenders up to INR 200 crores thereby disallowing global tenders in this regard
• MSME receivables to be settled by Government agencies within 45 days to enable better liquidity and working capital management
• Relief under the Insolvency and Bankruptcy Code such as :-
  • Minimum threshold to initiate insolvency proceedings raised to INR 1 crore
  • Suspension of fresh initiation of insolvency proceedings up to 1 year
  • Exclusion of COVID-19 related debt from the definition of ‘default’ for triggering insolvency proceedings
• Statutory PF contribution reduced to 10% from existing 12% and the extension of Government Sponsorship of EPF extended under Pradhan Mantri Garib Kalyan Yojana (PMGKY) to applicable entities
• Online market linkages to compensate for cancelled trade fairs
• Various tax rebates and MAT credit allowed to be carried forward for 15 years (Instead of 10 Years)
• Various Government schemes and subsidies to boost the MSME Sector such as Zero defect Zero effect, Incubation, Credit linked capital subsidy scheme, women entrepreneurship and more, to modernize the sector, improve product quality and make it more competitive among its global peers
• 50% subsidy on patent registration
• MSME Registration helps Enterprises to avail the benefits of:
• *Access to mudra loan scheme
• *Excise exemption scheme
• *Tender preferences
1. Seeking Exemption from Work Experience
2. Seeking Exemption from Earnest Money Deposit (EMD)
3. Seeking Exemption from Annual Turnover
• *Rebate and considerations under the Indian tax laws
• *Capital investment subsidies
• *Power tariff subsidies
• Income Tax Exemptions
• Grants of Capital for Infrastructure development
• Market Development Assistance scheme (MDA)
• Low Rate of Interest on overdraft
• Technology Support to MSMEs
• Access to greater credit & hassle free loans
• MSMEs get the benefit of a government security deposit waiver that is helpful while participating in e-tenders
• ISO certification fees reimbursement
• Electricity bills concession

Validity of the MSME registration?

Once you are registered and the process of verification is complete, you will obtain an MSME registration certificate. This certificate is proof that your entity or company is now registered as an MSME. This MSME/SSI registration certificate is valid for your entire lifetime. If you want to get your registration cancelled, you would need to write an application to the nearest Udyog Aadhaar Registration Centre and specify the business and the reasons behind cancelling the registration.

Documents for MSME Udyam Registration Online

For registration of your firm you need the following documents:

• Your Aadhar Number
• Your Bank Details – Account No and IFSC Code
• Your Mobile Number which is linked with your Aadhar card
• Your GSTIN Number
• Your E-Mail ID
• Income Tax Returns (ITR) last 3 years.
• Annual Turnover Last 3 years.
• And some details about your Company – Company Type, Number of Employees etc

Difference between Udyog and MSME registration

Udyog Aadhar is a government registration mechanism that provides the company with a registration certificate and a unique number known as Udyog Aadhar number. This programme is aimed specifically at small and medium-sized businesses. Udyog Aadhar aims to provide companies with the most access to government programs possible. However, on the other hand, The MSMED Act promotes a variety of schemes, subsidies, and benefits to support MSMEs, which are the backbone of the Indian economy. The MSME registration process is required to reap the benefit from governmental schemes, state schemes, and public services, although it is not obligatory. Further, The Udyog Aadhaar Memorandum Scheme, which the central government introduced, allows entities with an Aadhaar number, which is mandatory for MSMEs, to take advantage of easily accessible loans, credit, and government subsidies.

We offer end to end MSME Consultancy services across India in all states.