Micro, Small, and Medium Enterprises also known as MSMEs constitute an important part of the Indian economy. The MSME sector, known as the backbone of India’s industrial sectors, makes a significant contribution to employment opportunities, export promotion, and overall economic growth. The Ministry of Micro, Small, and Medium Enterprises envisions a vibrant MSME sector by promoting MSME growth and development.
What are MSMEs?
The Micro, Small, and Medium Enterprises Development Act of 2006 governs the classification of MSMEs in India. The act establishes investment and annual turnover limits for each type of business based on the establishment.
In Micro Enterprises the Investment in plant and machinery or equipment should not exceed INR 1 crore. And annual turnover should not exceed INR 5 crore.
In Small Enterprises the Investment in plant and machinery or equipment should be more than INR 1 crore but should not exceed INR 10 crore. And annual turnover should be more than INR 5 crore but should not exceed INR 50 crore.
In Medium Enterprises the Investment in plant and machinery or equipment should be more than INR 10 crore but should not exceed INR 50 crore. And annual turnover should be more than INR 50 crore but should not exceed INR 250 crore.
MSMEs’ growth, foster entrepreneurship and contribute to India’s job creation and economic development.
As part of India’s digital transformation, the MSME registration process in India has been made completely online via Udyam registration to make it easier for entrepreneurs to do business.
What is Udyam Registration?
MSME Udyam Registration refers to the process that allows any enterprise to be classified as Micro, Small, or Medium. Complete the registration online through the Udyam Registration Portal using self-declaration and only your Aadhaar or PAN card. Once done, you’ll receive an Udyam Registration Number and an e-Certificate known as the Udyam Registration Certificate.
Importance of Udyam Registration for MSMEs
There are some primary advantages of MSME registration through Udayam Registration Portal:
- Bank financing without the requirement of collateral
- Plans for development by the central government
- Subsidies and government programs aimed at specific industries
- MSMEs have exclusive rights to manufacture certain products.
- Bank interest rate cut
- Taxation exemption
- Payment protection against late payments
- Preference in government procurement tenders
- Stamp duty advantages
- Electricity bill reductions and trademark registration
- ISO Certification Expenses Reimbursement
- Foreign business expo facility
- Modernization of technology
- Infrastructure development capital grant
Who should opt for Udyam Registration?
According to the revised definition of Micro, Small, and Medium Enterprises, all industries classified as manufacturing, service, wholesale, and retail trade that meet the annual turnover and investment criteria for enterprises can apply for MSME registration. As a result, MSME registration eligibility is determined by the enterprise’s annual turnover and investment.
How to Apply for Udyam Registration Online?
The MSME registration process is available online via the government portal –
https://udyamregistration.gov.in/Government-India/Ministry-MSME-registration.htm
The process is quick and painless, paperless, and self-declaration-based, and it is carried out for MSMEs under the Ministry of MSME. And it is possible in the following two ways:
Firstly, For new entrepreneurs who still need to be registered as an MSME or those who have Entrepreneurs Memorandum part II.
Secondly, Those who have registered as Udyog Aadhaar Memorandum(UAM) or who have already registered as UAM through assisted filing.
If you are an entrepreneur, you can register on the Udyam portal to take advantage of all the benefits available to MSMEs. After completing the registration process, you will be eligible for business loans to help you grow your company. The government-launched MSME schemes that you can consider include the Scheme for Technology and Efficiency Upgradation, Credit Linked Capital Subsidy Scheme, Incubation, and others.
It is advised to consult any professionals for assistance to ensure accumulating the updated information, as government regulations are subject to change.
