MSME Udyam Registration
The MSME sector is the backbone of the Indian economy, contributing significantly to employment, manufacturing output, and exports. Udyam Registration is the government's initiative to support and empower small businesses through various benefits and schemes.
What is MSME Classification?
Initially, when the government introduced the MSME registration in 2006, the MSME classification was based on the investment criteria in plant and machinery or equipment. Later, the government revised the MSME classification by inserting annual investment and annual criteria. Also, the distinction between the manufacturing and the services sectors under the MSME definition was removed.
| Criteria | Micro | Small | Medium |
|---|---|---|---|
| Previous Investment & Annual Turnover | Up to Rs. 1 crore | Up to Rs. 10 crore | Up to Rs. 50 crore |
| Revised Investment & Annual Turnover | Up to Rs. 2.5 crore | Up to Rs. 25 crore | Up to Rs. 125 crore |
| Previous Turnover Limit | Up to Rs. 5 crore | Up to Rs. 50 crore | Up to Rs. 250 crore |
| Revised Turnover Limit | Up to Rs. 10 crore | Up to Rs. 100 crore | Up to Rs. 500 crore |
What is MSME Udyam Registration?
MSME registration is also called Udyam registration. The entities that fulfil
the MSME
classification can
apply for MSME registration from the government portal, the Udyam portal. The
MSME
registration is entirely
online and can be obtained from the Udyam registration portal.
It is not mandatory for MSMEs to obtain this registration, but it is
beneficial to get one’s business registered under
this because it provides a lot of benefits in terms of taxation, setting up the
business, credit facilities, loans etc.
Over 1 crore registered MSMEs, employing 7.5 crore people, contribute 36% to
India's manufacturing and 45% to exports,
establishing the country as a global manufacturing hub with their high-quality
products.
1 Crore+
Registered MSMEs
7.5 Crore
People Employed
36%
Manufacturing Contribution
45%
Export Contribution
MSME Registration Eligibility
All manufacturing, service industries, wholesale, and retail trade that fulfil the revised MSME classification criteria of annual turnover and investment can apply for MSME registration. Thus, the MSME registration eligibility depends on an entity's annual turnover and investment.
Individual Entities
- Individuals, startups, business owners
- Entrepreneurs
- Sole proprietorship
Business Entities
- Private and public limited companies
- Partnership firms
- Limited Liability Partnerships (LLPs)
Group Entities
- Self Help Groups (SHGs)
- Co-operative societies
Other Entities
- Trusts
Documents Required for MSME Registration
Mandatory Documents
- Aadhaar card
- PAN card
Important Information
No fees or proof of documents required
PAN and GST-linked details auto-fetched from government databases
GSTIN required only for GST-registered enterprises
MSME Registration Fees
No Registration Fees
Completely free on the official Udyam Portal
MSME Registration Certificate
- The Ministry of MSME issues an e-certificate known as the Udyam Registration Certificate to MSMEs in India. The Udyam registration certificate is known as the MSME registration certificate. The entrepreneurs receive the MSME registration certificate upon completion of the MSME registration process. The certificate will contain a QR Code, from which the enterprise details can be accessed.
- An enterprise having an MSME registration is known as Udyam, and the permanent identity number assigned to by the Ministry of MSME is known as the ‘Udyam/MSME Registration number’. The MSME Registration Certificate will contain the 19-digit MSME/Udyam Registration Number.
MSME Registration Benefits
- Due to MSME Registration India, bank loans become cheaper as the interest rate is very low, around 1-1.5%, much lower than interest on regular loans
- It also allowed credit for minimum alternate tax (MAT) to be carried forward for up to 15 years instead of 10 years
- Once registered the cost of getting a patent done, or the cost of setting up the industry reduces as many rebates and concessions are available
- MSME registration helps to acquire government tenders easily as Udyam Registration Portal is integrated with Government e-Marketplace and various other State Government portals which give easy access to their marketplace and e-tenders
- There is a One Time Settlement Fee for non-paid amounts of MSME
- The MSME registration will help the MSMEs in availing the benefits of government schemes such as the Credit Guarantee Scheme, Credit Linked Capital Subsidy Scheme, Public Procurement Policy, Protection against delayed payments, etc.
- MSMEs are eligible for priority sector lending from banks.
- MSMEs get the benefit of a government security deposit waiver that is helpful while participating in e-tenders.
- Any number of activities, including service or manufacturing or both, may be added or specified in one MSME registration.
- Barcode registration subsidy.
- Exemption scheme from direct taxes.