Brief Procedure of MSME Registration in India with key Benefits

Posted by Corpbiz adviser on December 9th, 2020

The Ministry of Micro, Small & Medium Enterprises is the governing body of MSMEs in India. MSME Registration is done according to the provisions stated under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. MSME Registration is essential, as it allows the establishment to benefit from the various schemes offered by the Government of India.

Overview of MSME Registration

Micro, Small and Medium Enterprises or MSMEs contribute mainly to the country's socio-economic development. The Ministry of Micro, Small & Medium Enterprises is the governing body of MSMEs in India. MSME Registration is done according to the provisions stated under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. MSME Registration is essential, as it allows the establishment to take benefits from the various schemes offered by the Government of India.

The Micro, Small and Medium Enterprises contributes to 45% of the total industrial employment of India, 95 % of all the industrial units of the country, 50 % of Total Exports of India and more than six thousand different types of merchandise are manufactured in these industries as per the official data available on msme.gov.in.

The growth of MSMEs is crucial for the growth and development of the economy for our country. MSMEs are also known as SSIs (Small Scale Industries).

What is MSME?

Micro, Small, and Medium Enterprises or MSMEs. As per the provisions stated under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, the establishment are classified into two categories, which are as follows:

Manufacturing Enterprises are the enterprises that are involved in the manufacturing or production of goods in the enterprises.

Service Enterprises are enterprises that are involved in providing or rendering services.

What is the eligibility criterion for Registering an MSME?

The distinction between the service and manufacturing enterprises is removed by the recent Atma-nirbhar Bharat Abhiyaan Economic Package introduced by the finance minister of our country Nirmala Sitharaman. The yearly turnover and speculation amount are made analogous for enterprises involved in both the manufacturing and service sectors.

Benefits of MSME Registration

The benefits of MSME Registration in India are as follows:

• The bank loans offered to MSMEs become very cheap as the interest rate is very low 1 to 1.5% for registered MSMEs in India. The low-interest rate for MSMEs helps them to grow and take calculated risks.
• There are several tax subsidies offered by the government to the registered MSMEs in India.
• Minimum Alternate Tax (MAT) is also allowed the registered MSMEs to be carried forward for the period up to 15 years instead of 10 years;
• Numerous government tenders are only accessible for the MSME Industries.
• The registered MSME gets easy access to credit.
• After MSME registration, the cost of receiving a patent is made, or setting up the industry is abridged as many concessions and reimbursement are available to MSME industries.
• The industries registered as MSMEs are given higher preferences for government licenses and certification.
• For MSMEs all non-paid amounts, there is a one-time settlement Fee.

Necessary Documents for MSME Registration

Following are the list of necessary information and documents essential to provide as per the application form for MSME registration:

• Aadhar Card of the applicant;
• The name of the applicant as per the Aadhar card;
• The social category of the applicant, whether the applicant belongs to the OBC, SC, ST, or General Category;
• Applicants Gender;
• The applicant's physical status, whether he/she is physically disabled or not;
• The name of the Enterprise;
• Type of enterprise;
• PAN card number
• The registered address of the Emprise's unit.
• The Date of Incorporation of the MSME.
• If any, preceding registration details of the enterprise.
• Bank details of the enterprise.
• The activities of the enterprise, whether it is a Service or Manufacturing.
• The NIC code;
• The details regarding Investment in plant and machinery.  

Who is Eligible to Apply for MSME Registration?

Any individual who completes multiple or any one of the criteria can apply of MSME Registration:

• Someone who is a part of HUF (Hindu Undivided Family).
• Someone who owns an LLP (Limited Liability Partnership).
• Any individual who is the owner of a partnership firm having another entity as his/her association;
• Someone who is a sole proprietor;
• Someone who is an owner of an OPC (One Person Company).
• Someone who owns a PLC (Private Limited Company).
• Someone who is the owner of the Production Company that is actively indulged in the production of materials.
• Someone who is having Co-Operative societies.

The procedure of MSME Registration

Fill the Application Form  for MSME Registration

The first step for the applicant entity is to fill the essential details required in the registration application form for the registration of Micro, Small, and Medium Enterprises. Then the application form is submitted to the concerned authorities. The registration application form for MSMEs can be filled online or offline.

Prepare All Necessary Documents

The applicant has to collect all the required documents, as mentioned in the registration application form for MSME. Generally, gathering or collecting all the required documents takes about one to two working days.

Filing of the MSME Application

The applicant has to upload all the necessary documents and submit the registration application form to the Registrar of Micro, Small, and Medium Enterprises (MSMEs). The concerned regulatory authorities do the verification and processing of the validity or authenticity of the documents submitted by the applicant. The processing and verification process is not very lengthy; it usually takes two to three working days.

Application Approval and Certificate Issuance

After the concerned regulatory authorities are satisfied with submitted documents and other information provided by the applicant, the authorities issue certification, and the applicants MSME is registered.

Conclusion

Micro, Small and Medium Enterprises or MSMEs contribute mainly to the socio-economic development of the country. The Ministry of Micro, Small & Medium Enterprises is the governing body of MSMEs in India. MSME Registration is done according to the provisions stated under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. The growth of MSMEs is crucial for the growth and development of the economy for our country. MSMEs are also known as SSIs (Small Scale Industries).