What is MSME and How to get MSME Registration?

An MSME (Micro, Small and Medium Enterprise) is defined by RBI/GOI differently for the Manufacturing and the Services Sector, as follows:

Manufacturing Sector :

1. Manufacturing sector refers to enterprises engaged in manufacture or production, processing or preservation of goods.

2. The definition of Micro, Small and Medium Enterprises under the manufacturing sector is based on the Investment in plant and machinery [original cost excluding land and building] and the items specified by the Ministry of Small Scale Industries

Services Sector :

1. Services sector refers to enterprises engaged in providing or rendering of services.

2. These will include:

1. small road & water transport operators (owning a fleet of vehicles not exceeding ten vehicles),

2. small business (whose original cost price of the equipment used for the purpose of business does not exceed Rs.20 lakh) and professional & self employed persons (whose borrowing limits do not exceed Rs.10 lakh of which not more than Rs.2 lakh should be for working capital requirements except in case of professionally qualified medical practitioners setting up of practice in semi-urban and rural areas, the borrowing limits should not exceed Rs.15 lakh with a sub-ceiling of Rs.3 lakh for working capital requirements). The definition of Micro, Small and Medium Enterprises under the services sector is based on the enterprise’s investment in equipments.

 

Benefit of MSME Registration/why MSME Registration is necessary/Losses to start-ups in case MSME Registration is not taken

1. Benefits of MSME Registration to Micro and Small Enterprises

1. Easy Finance availability from Banks

2. Preference in procuring Government tenders

3. Stamp Duty and Octroi benefits

4. Concession in electricity bill

5. Reservation Policies to manufacturing/ production sector enterprise

6. Reimbursement of ISO Certification expenses

7. Excise Exemption scheme

8. Exemption under Direct Tax Laws

9. Subsidy on ISO Certifications

10. weightage in price preference (may vary on enterprises basis)

11. Reduction in rate of interest from banks

12. Free of cost Govt. tenders

Benefits of MSME Registration to  Medium Enterprises

1. Easy Finance availability from Banks

2. Preference in procuring Government tenders

3. Reservation Policies to manufacturing/ production sector enterprise

4. Time-bound resolution of disputes with buyers through conciliation and arbitration

Rebates available to an enterprise who has taken MSME Registration :

1. 1% exemption on interest rate in OD

2. 2% concession on interest rate of Term Loan

3. 15% CLCSS Subsidy on fully automatic machinery bought under Bank Term Loan

4. Up to 80-90% Refund of Octroi Under B,C, D, D+ & No industry zone

5. Electricity duty exemption for 15 years under C, D, D+ & No industry zone

6. 50% subsidy on the expenses incurred for patent registration.

Documents Requirement for MSME registration

1. Proof of ownership of premises i.e. Lease Deed/Property tax receipt/Rent agreement/NOC.

2. Three passport size photographs of proprietors/partners/Directors

3. Photocopy of constitution of Business

4. PAN Card and Aadhar Card of proprietors/partners/Directors

5. Valid E-mail ID and Mobile No.

6. Declaration required regarding Amount of Investment in Plant and Machinery on Letter Head

Guidelines for Filing the Online Udyog Aadhaar Form for MSME Registration:-

Note:

A. EM-I has been abolished. Need not file through Udyog Aadhaar.

B. Udyog Aadhaar (UA) is for running units. No need to apply for upcoming units.

1. Aadhaar Number – 12 digit Aadhaar number issued to the applicant should be filled in the appropriate field.

2. Name of Owner- The applicant should fill his/her name strictly as mentioned on the Aadhaar Card issued by UIDAI. The same should accordingly be entered if the name does not match with the Aadhar Number, the applicant will not be able to fill the form further.

To Validate Aadhar:-

• Validate Aadhar- The applicant must click on Validate Aadhaar button for verification of Aadhaar, after that only user can fill the form further.

• Reset- The applicant can click on reset button to clear the field of Aadhaar No and Name of the owner for different Aadhaar.

3. Social Category- The Applicant may select the Social Category (General, Scheduled Caste, Scheduled Tribe or Other Backward Castes (OBC). The proof of belonging to SC, ST or OBC may be asked by appropriate authority, if and when required.

4. Name of Enterprise- The Applicant must fill the name by which his/her Enterprise is known to the customers/public and is a legal entity to conduct business. One applicant can have more than one enterprises doing business and each one can be registered for a separate Udyog Aadhaar and with the same Aadhaar Number as Enterprise 1 and Enterprise 2 etc.

5. Type of Organization- The Applicant may select from the given list the appropriate type of the organisation for his/her enterprise. The Applicant must ensure that he/she is authorised by the legal entity (i.e. enterprise being registered for Udyog Aadhaar) to fill this online form. Only one Udyog Aadhaar number shall be issued for each enterprise.

6. Postal Address- The Applicant should fill in the appropriate field the complete postal address of the Enterprise including State, District, Pin code, Mobile No and Email.

7. Date of Commencement- The date in the past on which the business entity commenced its operations may be filled in the appropriate field.

8. Previous Registration Details(if any)- If the Applicant’s enterprise, for which the Udyog Aadhaar is being applied, is already issued a valid EM-I/II by the concerned GM (DIC) as per the MSMED Act 2006 or the SSI registration prevailing prior to the said Act, such number may be mentioned in the appropriate place.

9. Bank Details-

1. The Applicant must provide his/her bank account number used for running the Enterprise in the appropriate place.

2. The Applicant must also provide the IFS Code of the bank’s branch where his/her mentioned account exists. The IFS code is now a days printed on the Cheque Books issued by the bank. Alternatively, if the Applicant knows the name of the Bank and the branch where his/her account is there, the IFSC code can be found from website of the respective Bank.

10. Major Activity- 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 then

1. if major work involves in Manufacturing and small portion of activity involves in Service sector then select your major activity type as “Manufacturing”

2. if major work involves in Services and small portion of activity involves in Manufacturing then select your major activity type as “Services”

11. National Industry Classification Code(NIC Code)- The Applicant may choose multiple National Industrial Classification-2008 (NIC) Codes to includes all their activities.

12. Person employed- The total number of people who are directly been paid salary/ wages by the enterprise may be mentioned in the appropriate field.

13. investment in Plant & Machinery / Equipment- While computing the total investment , the original investment ( purchase value of items) is to be taken into account excluding tho cost of pollution control, research and development, industrial safety devices, and such other items as may be specified, by notification of RBI.

14. DIC- The Applicant, based on the location of the Enterprise, has to fill in location of DIC. This Column will be active and show option only when there are more than one DIC in the district. In fact if there is only one DIC in the district system will automatically register you in the same DIC.

15. Submit- The Applicant must click on Submit button to generate acknowledgment number.

Provisional Registration would be allowed in approved Industrial areas only after the unit has obtained consent to establish from Delhi Pollution Control Committee.

The central government hereby specifies the General Manager, District Industries Centre or any District Level Officer of equivalent rank in the Directorate or the Department dealing with Micro, Small and Medium Enterprises of the State Government or Union Territory Administration, as the Authority with which the memorandum shall be filed.