Micro, small and medium-sized enterprises (MSMEs) play a vital role in shaping India’s economy. They also help to improve the nation’s less developed and rural regions by providing job possibilities. More than six million small and medium-sized enterprises (SMEs) operate in India according to the government’s annual report (2018-19).

Types of MSMEs

Manufacturing Organisations and Service Businesses are the two categories that make up the MSME classification system, which was established by the Micro, Small, and Medium-Sized Enterprises Development Act of 2006. The businesses are subdivided even further into categories according to their yearly sales and investment in machinery.

Investment cap for MSMEs

The investment cap for micro enterprises is less than Rs 1 crore; the investment cap for small enterprises is between Rs 1-10 crore; and the investment cap for medium enterprises is between Rs 10-50 crore. The turnover cap for micro enterprises is less than Rs 5 crore; the turnover cap for small enterprises is between Rs 1-25 crore; and the turnover cap for medium enterprises is between Rs 26-250 crore.

Criteria for MSME registration

Aadhaar Cards and Permanent Account Number Cards (PAN Cards) are the only forms of identification needed for MSME Registration. The registration process for MSME may be completed entirely online, and submitting proof of paperwork is not necessary. PAN and GST associated details on financing and revenue of businesses will be acquired digitally from government records through the Udyam Registration Portal. The Income Tax and GSTIN systems are both completely included within the Udyam Registration Portal.

The Goods and Services Tax (GST) is not required to be paid by businesses exempt from registering for GST under the legislation governing GST. On the other hand, in order to receive Udyam Registration, a business must first have GST Registration. 

The Udyam Registration Portal requires that anybody having a UAM membership or any other licensing issued by an agency under the Ministry of MSME re-register by selecting the “new businesses who are not Registered as MSME or those with EM-II” option.

Entrepreneurs with UAM registrations must switch to Udyam registrations by 30 June 2022 if they want to keep their UAM registrations valid and be eligible for the MSMEs’ perks.

Online registration process for MSME

The registration process for MSME may be completed entirely online. The government website udyamregistration.gov.in is where individuals should go to register their MSME businesses online. The site allows registration of MSMEs under the following categories:

For new businesses not yet registered as MSME or EM-II

The option “For New Entrepreneurs who are not yet Registered as MSME or those with EM-II” displayed on the main website for enrolling MSME must be clicked by businesses with EM-II certification and young ventures. In order to register a new MSME, you must provide your Aadhaar card number as well as your PAN number.

Following the entry of these particulars, it is necessary to click the “Validate and Generate OTP Button” tab. The PAN Verification window will load when this button has been clicked, the OTP has been received, and it has been input.

The business owner is responsible for entering the “Type of Organisation” and the PAN Number, after which they must click the “Validate PAN” button. The PAN records are retrieved from the official databases through the site, and the PAN identity of the business owner is checked for accuracy.

The Udyam Registration screen will appear when the PAN is verified, and the businesses will need to fill in their personal data as well as the details of their firm.

Clicking the “Submit and Get Final OTP” button on the MSME application form should be done after all of the fields on the form have been filled out. Following the completion of the MSME online signup process, a notification of completing the registration process along with a reference number will be shown. It is possible that a few days will pass between the verification of the MSME registration form and the issuance of the Udyam Registration Certificate.

Registration for business owners already possessing UAM

Clicking the button labelled “For those already having registration as UAM” or “For those already having registration as UAM via Assisted filing” is required for individuals who already have UAM registration. This will open a new page that requires the user to input their Udyog Aadhaar Number and pick an option for an OTP.

The alternatives that are available are to acquire the OTP on your mobile device after the UAM has been typed in, or to receive the OTP on the email after the UAM has been typed in. The “Validate and Generate OTP” button has to be clicked on once the OTP Options have been selected. Following the input of the one-time password, the MSME application form must have the corresponding data filled out before the Udyam registration can be considered finished.

Details required on MSME application form

1. Aadhar number
2. Name of entrepreneur according to Aadhaar card
3. Type of institution

• Proprietorship
• partnership firm
• private or public limited company
• limited liability partnership
• co-operative society
• Hindu undivided family, 
• self-help group
• society or trust

4. PAN card

5. Social classification (General, OBC, SC/ST)

6. Gender

7. Name of the company

8. Plant or unit location

9. Address of the company’s office

10. Date of establishment, incorporation, or registration of the enterprise

11. Bank account and IFSC code for a bank

12 Enterprise’s commercial pursuits

13. NIC codes of the principal undertaking

14. Number of personnel

15. Sum invested on plant and equipment 

16. Turnover 

MSME registration certificate

When the online MSME registration form has been successfully submitted, a notification of successful registration along with a registration number will appear. After verifying the information provided on the application form that was uploaded to the site, the Ministry of Micro, Small, and Medium Enterprises (MSME) will send the Udyam Certificate of registration or the MSME credential to the email address provided by the entrepreneur.

Following the completion of the registration process and the passage of a few days, the Ministry will provide the MSME certificate. The MSME membership licence is valid for an individual’s whole lifetime. Therefore, there is no need to renew it.

How to get an online MSME certificate? 

The entrepreneur must visit the Udyam Registration site in order to get the MSME certificate online. Doing so will allow them to obtain the online MSME certificate. The following steps need to be taken in order to get an MSME registration certificate online:

• On the portal’s homepage, entrepreneurs must choose the ‘Print/Verify’ button and then the ‘Print Udyam Certificate’ option.
• Entrepreneurs must input their Udyam Registration Number, contact number, select the OTP option, and press the ‘Validate and Generate OTP’ button on the subsequent page.
• Click the ‘Validate OTP and Print’ option after entering the OTP sent to the cellphone number or email address.

You will then be capable of printing the MSME certificate of registration directly from the website when it has been displayed. An entrepreneur may determine their MSME registration number by referring to the reference number that is provided once the MSME application form has been submitted.

MSME registration advantages for small businesses

• MSME registration makes it possible for small and medium-sized enterprises to get bank loans at significantly reduced interest rates, between one and one and a half percent. 
• In addition to that, it allows the credit for minimum alternative tax (MAT) to be pushed forth for up to 15 years, up from the previous 10 years.
• After registration, the cost of obtaining a trademark or the cost of establishing a business in the sector will decrease since a greater number of discounts and concessions will be available.
• MSME registration makes it easier to procure government tenders because the Udyam Registration Platform is assimilated with the Government e-Marketplace and numerous other State Level portals. These portals provide immediate access to their respective marketplaces and e-tenders. MSME registration also helps small and medium-sized businesses.
• For MSME balances that have not been paid in full, a One-Time Settlement Fee will be assessed.
• The Udyam Registration will make it easier for micro, small, and medium-sized enterprises to take advantage of various government programmes and policies, including the Credit Guarantee Scheme, the Credit Linked Capital Subsidy Plan, the Public Procurement Policy, the Protective measures against Delayed Payments, etc.
• Small and medium-sized businesses are often considered priority borrowers by financial institutions.
• When participating in electronic tenders, micro, small, and medium-sized enterprises (MSMEs) have the advantage of not having to pay a security deposit to the government.
• It is possible to add or specify a lot of operations inside a single Registration, including either manufacturing as well as service activities, or both.
• Fee reduction for barcode registration.
• A programme that provides exemption from direct taxes
• ISO certification fees reimbursed.
• Reduction in the monthly cost of electricity.
• Particular attention while participation in international trade exhibitions.

How can I get a SME loan?

Individuals may simply apply for a loan via an MSME by following the procedures that are listed below:

• To apply for a SME or MSME loan, fill out the application form that is found online. 
• In order to finish the procedure, you will need to provide all of the necessary paperwork (KYC documents, proof of address, evidence that the company is owned by you, and financial data). 
• Get your money within the next day at any bank.

Important Atma-nirbhar Bharat Abhiyan announcements

• 3 lakh crore in collateral-free loans for SMEs
• Investing of Rs 50,000 crore via the MSME Fund of Funds.
• Rs 20 crore subsidiary debt for MSMEs
• Extension of RERA’s certification and completion deadlines for real estate projects
• Immediate release of pending reimbursements to all non-charitable organisations.
• Extending the ITR filing deadline for FY19-20 until November 30, 2020

Contact Details 

• Contact number for general MSME queries 

011-23063288

• Contact number for Udyam Registration or Udyam Registration Certificate for administration queries

011-23063800 

• Contact number for Udyam Registration or Udyam Registration Certificate for Technical queries

011-23062354

• MSME contact address

Ministry of Micro, 

Small and Medium Enterprises, 

Udyog Bhawan, Rafi Marg, 

New Delhi – 110011.

• MSME web information manager address 

Ministry of Micro, 

Small and Medium Enterprises, 

Room No 468 C, 

Udyog Bhawan, Rafi Marg, 

New Delhi – 110011. 

Also know

How do you determine the UAM number?

UAM is a licensing form that comprises a self-declaration style whereby the MSME would self-certify its establishment, bank account data, promoter/identification owner’s credentials, and other details that are necessary. The UAM number application does not have a cost associated with it.