What is the definition of MSME ?

The existing MSME classification was based on the criteria of investment in plant and machinery or equipment. Existing MSME Classification are given as below:

SECTOR CRITERIA MICRO SMALL MEDIUM
Manufacturing Investment < Rs 25Lakh < Rs 5 crore < Rs 10 crore
Service Investment <Rs 10Lakh <Rs 2 crore <Rs 5 crore

Now, the government revised the MSME classification by inserting composite criteria of both investment and annual turnover. The following is the revised MSME classification, where the investment and annual turnover, both are to be considered for deciding an MSME.

Criteria MICRO SMALL MEDIUM
Investment

And

Turnover

< Rs 1 Crore

and

< Rs 5 Crore

< Rs 10 Crore

and

< Rs 50 Crore

< Rs 50 Crore

and

< Rs 250 Crore

BENEFITS OF MSME REGISTRATION

  • MSME registration helps in getting government tenders 
  • Collateral Free and Cheaper loan under Credit Link Guarantee Scheme. 
  • 1% less Interest on OD. 
  • Easier and Cheaper License. 
  • Protection on delayed payment. 
  • Cheaper Electricity. 
  • Upto 50% off on Patent and trademark 
  • Registered MSMEs gets tariff subsidies and tax and capital subsidies. 
  • Gets exemption under Direct Tax Laws

DOCUMENT REQURIED FOR MSME REGISTRATION

  • Business Address Proof : 
  • For self-owned premise: Lease deed, property tax receipt, possession letter, allotment letter, etc.
  • For rented premise: NOC from the landlord, rent receipts, utility bills or document evidencing the landlords ownership, etc
  • Copy of Sale and Purchase bills 
  • Partnership Deed
  • AOA and MOA

FAQ’S

Q 1. How can I apply for MSME registration?

Ans: Any type of business can apply for MSME registration.

Q 2.  Is Aadhaar number mandatory for online MSME registration?

Ans: For MSME registration, Aadhaar card is mandatory.

Q 3.  Can MSME borrowers get collateral free loans from financial institutions?

Ans: Yes MSME borrowers get collateral free loans from financial institutions

Q 4.  Is credit score necessary for MSMEs?

Ans: No, credit score is not required for MSMEs.

Q 5.  Do I get a hard copy or physical copy of the MSME certificate?

Ans: Government has initiated paperless work, so no physical copy is issued. However, the authority emails the certificate instead.

Q 6.  Do I need multiple registrations for manufacturing plants in different cities?

Ans. No. The MSME/Udyog Aadhar certificate is for a single entity irrespective of multiple branches or plants. However, information about multiple branches or plants must be furnished.

Q 7.  Can existing and new businesses both apply?

Ans. Yes, an existing and new business can apply for MSME/Udyog Aadhar registration.

Provided the existing unit is functioning and meets the threshold limits for registration.

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Author Bio

Qualification: Post Graduate
Company: UMESH AGRAWAL AND CO
Location: GHAZIABAD, Uttar Pradesh, IN
Member Since: 08 Jun 2020 | Total Posts: 1

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One Comment

  1. MUNISH JAIN says:

    I WANT TO CLEAR ONE POINT THAT IF A PERSON HAS TWO MANUFACTURING UNITS IN THE SAME NAME BUT IN DIFFERENT STATES DOES MSME REGISTRATION FOR BOTH THE UNITS CAN BE DONE IN ONE NUMBER OR DIFFERENT REGISTRATIONS NEED TO BE DONE

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