In this editorial author shall discuss about MSME,Criteria for Registration under MSME, Industries which are allowed to register under MSME and Process of Registration under MSME.

MSME stands for ‘Micro, Small & Medium Enterprises”. Earlier in India, there were the following Acts:

√ The Coir Industry Act, 1953

√ The Khadi and Village Industries Commission Act, 1956

√ The Micro, Small and Medium Enterprises Development Act, 2006

It was Act No. 27 of 2006. It came into force on October 02, 2006. vide notification No. S.O. 1154(E) dated July 18, 2006

Rules passed under this Act;

Year Description
26-09-2006 Rules of National Board for MSME, The National Board for Micro, Small and Medium Enterprises Rules, 2006.
26-10-2009 Rules of furnishing information on Plant & Machinery/ Equipments
29-07-2016 The Micro, Small and Medium Enterprises Development (Furnishing of Information) Rules, 2016
28-10-2016 MSME Fund Rules.2016

I. What are the new criteria for registration under MSME?

As per the MSME [2]Notification Dated June 01 , 2020, Following shall be criteria for Classification of MSME w.e.f. July 01 , 2020:

Investment in Plant & Machinery or Equipment AND Turnover
Classification Micro Small Medium
Manufacturing & Service Investment <1 Crore AND Investment <10 Crore AND Investment < 50 Crore AND
Turnover <5 Crore Turnover <50 Crore Turnover <250 Crore

II. What type of enterprise can apply for registration under MSME?

As per the MSME Act, 2006 All type of enterprises can be registered under MSME, whether:

Proprietary Hindu Undivided Family Partnership
Co-operative Private Company Public Company
Self Help Group Limited Liability Partnership Society
Trust Etc.

III. Which type of business activity eligible for registration under MSME?

As per the MSME Act, 2006 following business activities can register under MSME Either Manufacturer or Service provider can register under MSME.

The major activity i.e. either “Manufacturing” or “Service” may be chosen by the enterprise for Udyog Aadhaar. If your enterprise involves in both type of activities and if major work involves in Manufacturing and a small portion of activity involves in Service sector then select your major activity type as “Manufacturing” and if major work involves in Services and a small portion of activity involves in Manufacturing then select your major activity type as “Services”

IV. Whether Traders can register for MSME?

As per the MSME Act and MCA registration guidelines, Traders are not allowed to get registration for MSME.

However, if any enterprises are providing Service/ manufacture and trading activity also, then such enterprise can register under MSME.

V. Key Points about MSMERegistration:

  • Website for registration under MSME is following:

  • Above mentioned website is the actual government website for registration in MSME.
  • Newly incorporated entities are also eligible for registration under MSME.
  • There is no Government fee for registration under MSME.
  • Immediately on filing of application, MSME certificate shall be generated.

VI. Information Required for Registration under MSME:

Initial Requirement:

Aadhar No. is the first requirement for registration under MSME.12 digit Aadhaar Number issued to the applicant should be filled in the appropriate field.

*In case of registration of Company, it is required to mention Aadhar No. of any one Director.

* Mention only that Aadhar No. which is associated with active Mobile No. as MSME will send OTP for verification.

Other Requirement:

  • Social Category / सामाजिकवर्ग
  • Gender / लिंग
  • Physically Handicapped / शारीरिकरूपसेविकलांग
  • Name of Enterprise / उद्यमकानाम
  • Type of Organisation / संगठनकेप्रकार
  • PAN Number / पैनसंख्या
  • Location of Plant / संयंत्रकेस्थान
  • Official Address / आधिकारिकपता
  • Date of commencement /उद्यमकेप्रारंभकीतिथि(DD/MM/YYYY)
  • Previous EM1/EM2/SSI/UAM Registration Number, If Any / पिछले EM1 / EM2 / लघुउद्योग/UAM पंजीकरणसंख्या, यदिकोईहै
  • Bank Details / बैंकविवरण
  • Major Activity of Unit / इकाईकाप्रमुखगतिविधि
  • National Industry Classification (NIC) Code for Activities(One or more activities can be added)
  • Persons Employed / व्यक्तिनियोजित
  • Investment / Turnover निवेश
  • District Industry Centre / जिलाउद्योगकार्यालय

VII. If an enterprise having more than one unit, then whether entity wise registration is required?

As per MSME registration process, The Applicant may add multiple plant location in one registration by clicking Add Plant button. Therefore, one can opine that registration under MSME is entity wise registration instead of unit wise registration.

Therefore, only one registration will be granted to one enterprise.

National Industry Classification (NIC) Code for Activities (One or more activities can be added)

Enterprises have to mention the NIC code of activity. If enterprises are conducting more than one activity then they need to mention the NIC code for each activity.

Link NIC Code list is given hereunder:

VIII. Which Value of investment shall be taken at the time of registration under MSME?

Investment in Plant & Machinery / Equipment– While computing the total investment, the original investment( purchase value of items) is to be taken into account excluding the cost of Pollution control, Research and Development, Industrial safety devices, and such other items as may be specified, by notification of RBI. If an enterprise has started with a set of plant and machinery purchased in 2008 worth Rs. 70.00 lakh has procured additional plant and machinery in the year 2013 worth Rs. 65.00 lakh, then the total investment in Plant & Machinery may be treated as Rs. 135.00 lakh

List of Activities not allowed for registration under MSME:

Table.1 below would not be included in the manufacture or production of goods or providing or rendering of services in accordance with Section 7 of the Micro, Small and Medium Enterprise Development Act, 2006:-


NIC Code Activity
02 Forestry and logging
03 Fishing and aquaculture
45 Wholesale and retail trade and repair of motor vehicle and motorcycles
46 Wholesale trade except of motor vehicles and motorcycles 47
47 Retail Trade Except of Motor Vehicles and motorcycles
97 Activities of households as employees for domestic personnel
98 Undifferentiated goods and services-producing activities of private households for own use
99 Activities of extraterritorial organization and bodies

The NIC 2-digit activity 01- crop, animal production, hunting and related activities would also not be included as per Section 7 of the Act except for the sub-classes of activities at 5-digit level given in Table 2.:

Table. 2

NIC Code Activity
01462 Production of eggs
01463 Operation of poultry hatcheries
01492 Bee-keeping and production of honey and beeswax
01493 Raising of silkworms, production of silkworm cocoons
01612 Operation of agricultural irrigation equipment
01620 Support activities for animal production
01631 Preparation of crops of primary markets i.e. cleaning, trimming, grading disinfecting
01632 Cotton ginning, cleaning and bailing
01633 Preparation of tobacco leaves
01639 Other post-harvest crop activities, n.e.c
01640 Seed processing for propagation

Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at [email protected]). ‘



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One Comment

  1. Priya Malani says:

    Hi Divesh Ji,

    Very well written article with discussing the practical issues.

    Can you please share link of the circular wherein its mentioned that “Traders are not allowed to get registration for MSME.”.

    Also, can you share extract of the Act or an other documents from where it can be interpretation that MSME registration are not unit based.

    Thank You.

    Priya Malani

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