MSME Registration – Small Business & SSI Application Online in India
MSME (Micro, Small, and Medium Enterprises) covers any venture that does not have a turnover of 1200000000. These, according to analysts, form the backbone of the economy of any nation. These help the market ensure equitable distribution of wealth. For this reason, the Government of India offers numerous subsidies, incentives, and other facilities to MSMEs. It does this through the MSMED (Micro, Small, and Medium Enterprises Development) Act. To avail of these benefits, a venture has to register itself into it.
What is MSME?
MSME is the abbreviation for Micro, Small, and Medium Enterprises. It is a scheme of government that mainly targets providing benefits to medium and small-scale entrepreneurs in order to boost their businesses in today’s very competitive world. MSME scheme provides loans to new entrepreneurs, thereby assisting them in setting up their new businesses by removing their financial crunch.
Investment & Annual Turnover
Less than Rs.1 crore & greater than Rs.5 crore
Less than Rs.10 crore & greater than Rs. 50 crore
Less than Rs. 50 crore & greater than Rs. 250 crore
How to register with the MSMED Act?
MSME registration is a simple process. You have to visit the scheme’s official website – udyamregistration.gov.in . When there, follow the instructions you see on the screen. Choose your category and do as per the instructions. Any venture that falls in the MSME category is eligible to register here. And the only document required here is your Aadhar card. You also need to upload your PAN and GST details on your investment and turnover. The portal will gather all other details from the database of the Government.
Check the Government portal, check the updates, and furnish the documents accordingly. Registration for MSME is done through the portal of the Government of India udyamregistration.gov.in. According to the details given in this portal, there are two categories under which MSMEs can register themselves. Both these categories are given below –
- Entrepreneurs who have not registered themselves as MSMEs before and thus are registering themselves for the first time.
- Those Entrepreneurs who have already registered as UAM or EM-II and those having registered as UAM or EM-II through assisted filing.
For New Entrepreneurs who are not Registered yet as MSME
Entrepreneurs who are registering for the first time need to choose the button “For New Entrepreneurs who are not Registered yet as MSME” showing on the homepage of the MSME portal and click it. The registration process requires entering the Aadhar Card number in two ways listed below –
- Registration along with PAN Card details
- Registration without any PAN Card
Registration Along With PAN Card:
When we open the home page of the portal, the option “For New Entrepreneurs who are not Registered yet as MSME ” is to be chosen which in turn opens the next page for MSME registration. Here the applicant’s Aadhar Card number is asked for. After giving an Aadhar Card number the Entrepreneur’s name is asked for.
The next step after giving these details is clicking on the button “Validate and Generate OTP ”. After generating and entering OTP, the next page opens that asks for PAN Verification.
If the applicant owns a PAN Card, the PAN Card details are automatically taken from the databases of government and filled in thereby. The next step required is filing the ITR details of the applicant entrepreneur.
Once all these details are filled in, a message box appears that says “Udyam Registration has already been done through this PAN”. Now the entrepreneur has to click the “Validate PAN”.
After PAN is verified, the portal will show the Udyam Registration box that asks the entrepreneur to fill in his personal details along with details of the industry or the plant he is going to set up.
Once this details-filling process is over, the entrepreneur has to click “Submit and Get Final OTP”.
After getting and filling out this final OTP, the registration process is considered complete as the entrepreneur is now registered as MSME. What follows now is a successful registration message along with a reference number. Once the verification of registration is done (in a few days), the Udyam Registration Certificate is issued.
Registration in absence of the PAN Card:
The initial process for registration of MSME is the same as mentioned above like clicking on the option “For New Entrepreneurs who are not Registered yet as MSME” and then when the next page of the government portal of registration of MSME is opened, the next step required is that the Aadhar Card number and name of the entrepreneur needs to be filled into the space provided. When the entrepreneur fills in his Aadhar Card number and his name, then the next step required is clicking the “Validate and Generate OTP” button.
Once this button is clicked and OTP is received by the entrepreneur, he needs to enter the OTP. After this step, the next page that opens is that of the PAN Verification. But the entrepreneur might not possess a PAN Card, so when the box opens it asks “Do you have PAN?”. There are two options below that box – “Yes” and “No”. Here the entrepreneur has to click the “No” option if he does not possess a PAN Card. Then for opening the next page the next step required is clicking on the “Next” button.
After the “Next” button is clicked, the Udyam Registration page gets opened. This page requires that the entrepreneur must upload his personal details and all details regarding his plant or details of the industry. After going through all these procedures and having filled in all the required details, the next step that the Entrepreneur needs to take is to click on the “Final Submit” button. In a short while, a message of thank you can be seen on the screen along with the registration number.
Here it is to be noted that an entrepreneur can register himself as MSME even if he does not have a PAN Card and GSTN. But after registration, he has to apply for a PAN Card and GSTN. As soon as he gets both, i.e., PAN Card and GSTN he has to update it on the MSME Registration portal before 01/04/2021 otherwise his Udyam Registration might get suspended.
Registration For Entrepreneurs Already Having EM-II Or UAM:
Entrepreneurs who have already registered as UAM or EM-II are required to click on the option that says “For those having registration as EM-II or UAM” or “For those having registration as EM-II or UAM through Assisted filing” that gets flashed on the government portal’s home page.
Now this will result in the opening up of a page where it is mandatory to fill in Udyog Aadhaar Number and then the entrepreneur has to click “Send OTP”.The options given are to either get OTP on the mobile as is filled in UAM or get OTP on email as is filled in UAM.
After selecting the OTP options, the button “Validate and Generate OTP” needs to be clicked. As soon as the Entrepreneur receives the OTP, it has to be filled in the box provided. The next step after entering OTP is filling in the details of registration. This completes the udyam registration procedure.
Document Required for the MSME Registration:
- Personal Aadhar number
- Industry name
- bank account details and some common information.
- The owner of the enterprise can provide self-certified certificates for the same.
- The owner will get a registration number upon filling out and successful upload of the form.
- There are no registration fees required for this process.
Do also glance through the documents required for registration below:
- Address Proof of the Enterprise: In case the premise is owned by the owner of the enterprise, all you need is the allotment letter, possession letter, and property tax receipt or lease deed. Rent receipt and No Objection Certificate from the landlord would suffice in case your enterprise is operating out of leased space.
- Sale Bill or Purchase Bill: The enterprise needs to submit copies of the bill for the products/services it sold and a copy of purchase bills for the raw material it purchased.
- Partnership Deed, MoA, and AoA: If the business is a partnership firm, it must submit its partnership deed and registration certificate in case it is a registered entity. In case the enterprise is a company, a copy of the Memorandum of Association and Articles of Association, and a certificate of incorporation must be submitted. A copy of the resolution passed at the latest general meeting and a copy of the board resolution authorizing a director to sign the MSME application must also be submitted.
- Licenses and Bills of Machinery: In a few cases, the owner of the enterprise might have to submit a copy of the industrial license received from the government. The owner may also have to submit copies of bills and licenses related to the purchase and installation of machinery, equipment, etc if required.
Advantages of registering into the MSMED act
Registering with the MSMED Act is not a legal requirement. But doing it offers you the following benefits:
- You receive collateral-free loans
The Government of India offers collateral-free loans to MSMEs all over the country. This ensures that you have the funds required to launch your dream venture. You may even use it to expand your business. This is made possible through a trust called Credit Guarantee Trust Fund Scheme. It is a concerted effort by the Government of India, the Small Industries Development Bank of India, and the Ministry of MSMEs. The trust ensures the implementation of the Credit Guarantee Scheme.
- Subsidy to register patents
The government of India offers a 50% subsidy for the loans it receives if the venture is registered with MSMED Act. You may use it to apply for patent registration under the Ministry of MSMEs.
- Subsidy for industrial promotion
Registering under this Act makes you eligible for Government subsidies available to promote your products and services.
- Extension of interest on overdraft facility
Ventures registered under MSMED are eligible for 1% interest on the overdraft facility. The amount may vary depending on the lender you choose.
- You avail low-interest rates for the loans you take
In addition to the exemption on overdraft facilities, those MSMEs registered under the MSMED Act are eligible for 2% interest sub-pension. These are made available for incremental loans of less than INR 10000000.
- Reimbursement of charges incurred for ISO certification
MSMEs registered under the Act are eligible for the reimbursement of the cost they incur in obtaining the certifications like ISO9000, ACCP certification, etc. This is done so as to improve their performance in all sectors.
- The incubation scheme for MSMEs
This is a scheme the Government of India launched in 2019. This helps aspiring entrepreneurs to develop innovative ideas for the creation of innovative products. A venture registered in MSMED Act receives the following assistance as per this scheme:
- Financial assistance of up to INR1500000 is offered to nourish an idea.
- A loan of INR10000000 is offered to procure and install machinery in business intelligence. This is done with a view to strengthening the R&D activities in the field.
- Financial assistance of up to INR10000000 is offered as seed capital support to BIs and His to transform their ideas into ventures. This is offered in the form of grants.
- Market development scheme
The Central Government has a price and purchases preference mechanism in place. Up to 358 items are listed as per this policy. Government buys these products exclusively from MSMEs registered under the Act. The scheme offers marketing support even for those units that don’t fall in the category of reservation as per the policy.
- Safeguards your business from delayed payments
Buyers may buy products or services from MSMEs and fail to pay their dues on time. In such an instance, the Ministry of MSMEs comes to your assistance. It lets them levy interest on the payment delay. A settlement here happens through arbitration and conciliation. And these issues are generally resolved within no time.
- 100% exemption from tax for innovative startups
Are you registered with the MSMED Act? Is yours an innovative startup? If yes, your business is eligible for exemption from all taxes for three in seven years. The turnover should not exceed INR 25000000 in any of these financial years. You can avail of this benefit under the Income Tax Act. As per this rule, companies are considered startups with up to ten years of service. It also allows credit for minimum tax alternatives to be carried forward for 15 years.
- Lower electricity bill
An MSMED Act-registered firm is eligible for concessions in electricity bills. To avail of this facility, you need to apply to the Electricity Department along with the certification of registration.
- Preference when inviting tenders
At regular intervals, the Government of India invites tenders. Certain numbers among them are reserved only for ventures that have MSME registration. Lately, the Government declared that competition from foreign players is nowadays getting unfair. And it will not accept global tenders in the range of INR 200000000 as an investment.
Types of MSME loan Options:
We will cover MSME Lending for private enterprises so you to get a gist of the loan options. The loan options available are:
1. Working capital loans: As the name suggests, this is required by enterprises that need instant capital to keep the business moving forward and sustain their operations. They also need funds to bridge the gap between the delivery of finished products and paying for the same. As an MSME, they can avail of such loans at better terms and have a repayment tenure of 1-2 years. The lending is collateral-free. The MSME enterprise should be in business for over a year and its annual turnover should be greater than INR 24 Lakhs. The documentation required for loan eligibility includes KYC documents, a business registration certificate, and the Current Account statement for the last 6 months.
2. Merchant Cash Advance: This is a form of lending wherein disbursal is quick. The MSME receives a lump sum amount required and the repayment is done daily as per the sales done at the organization’s point of sale terminals. An MSME whose product or service is consumed by customers and instantly paid for through a point-of-sale terminal is aptly suited for such kinds of loans. Do you think this is a great method? Visit Lendingkart and help us arrange capital at very good rates for you.
3. Line of Credit: Line of credit enables enterprises to have credit options at their disposal for meeting their daily expenses. While the enterprise has access to a pool of funds here, the interest is charged only when they avail of a loan. The enterprise can enjoy a revolving line of credit and get a reduced interest rate for its loan. Are you looking for such loans? Know more by clicking here. While the loan is not backed by collateral, users can avail of loans in the range of INR 50,000 to INR 1 Crore. The repayment tenure is 1 year.
4. Invoice Financing: Invoice financing, as the name suggests, enables MSMEs to raise capital against invoices that are yet to be cleared. It helps them to maintain their cash flow better and manage day-to-day operations. In this model of financing, the lending organization takes a percentage of the invoice upon clearance wherein it covers the processing fee, the principal, and the accrued interest. Any enterprise which has been operational for more than a year and has a turnover of over INR 24 Lakhs can avail of this type of financing. It should however have raised the invoice to a reputed corporate entity and should have valid invoices of work of at least INR 1 Lakh.
Is the Government of India helping to scale up MSMEs?
The government of India has been increasingly digitizing and accelerating capital-raising processes to enable faster disbursals and help create more entrepreneurs. For MSMEs, the government is running a series of schemes as below:
Technology and Quality Upgradation Scheme:
Registering under this particular scheme will enable small, micro, and medium enterprises to make use of energy-efficient technologies (EETs) in the production processes in their manufacturing units such that their cost of production is reduced and thereby a clean development or production mechanism is adopted.
Grievance Monitoring System:
Registering in this scheme comes in handy in terms of receiving the complaints of the Entrepreneurs addressed. Under this, owners of the businesses can check their complaints’ status and open them again if they are unsatisfied with the result.
Under this scheme, the aim is to aid innovators through the implementation of new ideas, designs, or products. It offers the required financial assistance for the ‘Business Incubators’. It promotes new designs, ideas, products, and others.
Credit Linked Capital Subsidy Scheme:
Through this scheme, technology is offered to all business owners for replacing their obsolete and old technology. Under this capital, a subsidy is given to all the businesses for upgrading and thereby offering better means for doing their business. Under small, micro, and medium enterprises, one can approach any of the banks directly for subsidies.
PM MUDRA YOJANA:
The initiative provides funding to MSMEs whose lending requirements are less than INR 10 Lakhs. The PM Mudra Yojana takes a longer time to process but offers competitive interest rates and relaxed repayment tenure. In the meantime, if you wish to avail of an MSME loan, Visit Lendingkart.com.
SMILE is a Government of India initiative that works alongside “Make in India” and has a budget of INR 10,000 Crores to enable MSMEs to accelerate growth. They offer loans at an 8% rate of interest and the repayment tenure is up to 120 months.
As you have read, it is beneficial to register as an MSME if you fall in the category in terms of revenue. The government has made it compulsory for large corporations to have a minimum set transaction with the MSME sector. All these factors will lead to great MSME growth. Register today to avail yourself of the benefits. If you need money right away as you register to become an MSME, please get in touch with us to avail of an MSME loan.
MSME Registration FAQs:
1. Is Udyam registration an update of MSME registration?
2. Is an Aadhar card a must for MSME registration?
3. What are MSMEs?
Investment in plant, machinery and equipment
4. How to calculate the investment on plants and machinery?
5. Is it a must for a venture to have MSME registration?
6. Will the applicant receive a physical copy of the registration certificate?
7. What is the fee for online Udyam registration?
8. Is an MSME registered venture eligible for a composite loan?
9. How long is Udyam registration valid?
10. Is there the chance of rejecting my MSME registration application?
RuPay Credit Card Unveiled by Union MSME Minster on Friday
The MSME RuPay credit card was introduced by Shri Narayan Rane, union minister for micro, small and medium enterprises, at the two-day MSME congregation in Sindhudurg, Maharashtra. The card provides a lot of benefits like easier payment methods in relation to the money expenses of the enterprises, lowered interest rate and free-of-interest period of 50 days, and more. Any time digital payment, EMI facilities, monitoring transactions at a granular level using a RuPay credit card are some of the attractive features in this launch. Additional features include insurance coverage, domestic airport lounge access, and other rewards along with digital platform services are offered by NPCI. Promoting small businesses with incentives like these can help boost sales. Distribution of the first group of RuPay cards to selected MSME business start-ups also took place at the MSME conclave.
News Updated Date: 24-03-2022