MSME Registration in India: A Full Guide

Micro, small, and medium enterprises (MSMEs) are the motivational power of India's economy as they generate a large part of employment, industrial production, and exports. The Government of India has recognized his central role, and hence, MSMEs provide profit and encouragement. MSME registration, now Udyam registration, is required to enjoy these benefits.

Classification of MSMEs

MSME classification is done according to investment in plant and machinery or equipment, and turnover per year:

• Micro Enterprises: Up to ?1 crore investment and up to ?5 crore turnover.
• Small Businesses: Investment maximum of ?10 crore and turnover maximum ?50 crore.
• Medium Enterprises: Investment up to ?50 crore and turnover up to ?250 crore.

These thresholds equally apply to manufacturing and service sectors.

Advantages of MSME Registration

MSME registration has various benefits:

• Collateral-Free Loans: Availability of credit without collateral under programs such as the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
• Subsidies and Incentives: Government subsidies, among others, on patent registration, ISO certification, and technology upgradation.
• Delayed Payments Protection: Judicial protection for securing timely payment by buyers, with interest on delayed payments after 45 days.
• Discount on Electricity Bills: MSMEs are eligible to get discounts on electricity bills if they submit their MSME registration certificate.
• Market and Export Promotion Support: Marketing assistance through trade fairs, exhibitions, and buyer-seller meets, along with export promotion support.
• Tax Incentives: Exemptions and rebates in direct and indirect taxation laws.
• Priority in Government Tenders: Dedicated access to some government tenders and purchase policies that give preference to MSMEs.
• Facilitation in Obtaining Licenses and Approvals: An easy process of procuring licenses, registrations, and approvals from the government.

Eligibility Criteria for MSME Registration

Any manufacturing or service business entity can apply for MSME registration, such as:

• Proprietorships
• Partnership firms
• Limited Liability Partnerships (LLPs)
• Private Limited Companies
• Public Limited Companies
• Co-operative societies
• Trusts and Societies

The enterprise should be within the investment and turnover limits defined for micro, small, or medium enterprises.

Documents Needed for MSME Registration

The documents listed below are generally needed for MSME registration:

• Aadhaar Card: Of the proprietor, partner, or director.
• PAN Card: Of the business entity and of the individual applicant.
• Proof of Business Address: Utility bills, rent agreement, or property documents.
• Bank Account Information: Cancelled cheque or bank statement.
• Proof of Business Registration: Partnership deed, certificate of incorporation, or registration certificate.
• Investment and Turnover Information: Financial statements or self-declaration.

How Goyal Natiya & Associates Can Help

Goyal Natiya & Associates, a well-established Chartered Accountant firm since 2011, provides end-to-end MSME registration services. Their professional acumen guarantees a hassle-free registration process, such as:

• Document Preparation: Helping to collect and prepare required documents.
• Application Submission: Submitting the MSME registration application on behalf of clients.
• Advisory Services: Offering advice on eligibility, benefits, and compliance norms.