How to get a business registered under MSME? Step-by-Step process

The resourceful and risk-taking trends in India have been witnessed across history and seen to be rapidly growing, particularly in recent times. All this has paved the way for the growth of Small and mid-size enterprises (SME) and the Micro, Small & Medium Enterprises (MSME) sectors. The government has also strived to promote them through special schemes whereby a business, when registered under the MSME scheme, is eligible for various benefits. So it's imperative for small businesses to register under MSME to avail these benefits. Let's run through the process of registering under MSME and understand the benefits associated with it.

Documents Requirements for MSME Registration

The following are the details of the documents required for MSME registration:

For proof of business address of a self-owned property, a property tax slip, letter of allotment, and letter of possession are required.
For proof of rented property, agreement and NOC from the owner of the property and rent receipts are required.
For proof of company registration, a copy of the sale bill and the purchase bills are required.
For a partnership firm, the partnership deed and the registration certificate are required.
For a company, a copy of the Memorandum of Association and Articles of Association, along with a certificate of incorporation, is required to be submitted.
Other documents needed are copy of licenses and bills of machinery purchased, Aadhaar card, cancelled cheque, PAN, documents showing the social category of the applicant (whether a General, SC, ST or OBC), and a document showing physical fitness or disability.

Process of Registering Business Under MSME

Firstly, the applicant who is the business owner is required to fill a single form, which can be done online or offline.
If the application is for more than one industry, then too they can go ahead with individual registration.

The applicant has to visit the website https://www.msmeregistration.org/, keeping the necessary documents handy.

Registration fees are not collected.
After the form is completed with the required details, then the registration number is obtained.
The application process can be completed through:

Registration with PAN card
Registration without PAN card
Registration for applicants previously having EM-II or UAM

1. Registration with PAN card

On clicking the ‘For New Entrepreneurs who are not Registered yet as MSME’ key located on the portal homepage, you can navigate to the page for the registration. Here, the details of Aadhaar number and the entrepreneur’s name are to be entered.
On filling the above details, click on the key ‘Validate and Generate OTP Button’.
On clicking the button, an OTP is generated and received; on entering the passcode, a page opens for PAN verification.
The PAN card of entrepreneurs in the portal receives the details through the previously filled details.
The applicant has to fill the ITR details.

On entering PAN details, a message is displayed: ‘Udyam Registration has already been done through this PAN’, after which the applicant is required to click on the button ‘Validate PAN’.
The box of ‘Udyam Registration’ appears after the PAN verification, and the applicant needs to fill in the details of the enterprise.
On filling these details, click on ‘Submit and Get Final OTP’. The registration of the MSME is thereby done, and a message of registration success will be displayed, including a reference number. The certificate of Udyam Registration is issued following registration verification, which may take a few days.

2. Registration without PAN card

The key which says ‘For New Entrepreneurs who are not Registered yet as MSME’ has to be clicked; this is located on the homepage of the government portal.
It navigates to the registration page, and then the details of Aadhaar number and the applicant name have to be filled. Then, click ‘Validate and Generate OTP’. On entering the OTP received, the ‘Verification of PAN’ page is seen. When the applicant does not have a PAN card, the ‘No’ option in the key ‘Do you have PAN?’ has to be clicked, following which the ‘Next’ key has to be clicked.
With the click of the ‘Next’ button, the Udyam Registration page comes up, wherein the applicant is required to fill personal details and that of the plant or industry.
On filling the above details, ‘Final Submit’ has to be selected, following which the message of ‘thank you’ appears according to the registration number. With the receipt of PAN and GSTIN, the details in the portal are to be filled within a specified time frame to avoid suspension of Udyam Registration.

3. Registration for applicants previously having either EM-II or UAM

Applicants who have already registered with EM-II or that of UAM are required to select the button ‘For those having registration as EM-II or UAM’ displayed on the government portal homepage. This will navigate to a page which requires entering the details of Udyog Aadhaar Number, following which the ‘OTP’ choice should be clicked. This is for obtaining email OTP with completed UAM. Following this, the tab ‘Validate and Generate OTP’' has to be clicked. After filling OTP details, the registration is required to be completed, and then the Udyam registration is said to be complete.

Businesses Covered Under MSME Scheme

There are eligibility criteria for any business to be covered by the MSME Scheme. The maximum and minimum revenue of the business, whether manufacturing or service, are considered for this. Let us understand these criteria.

a) For manufacturing, the eligibility is assessed by the amount invested in plant and machinery.

For micro enterprises: The investment requirement is up to Rs. 1 crore and turnover of less than 5 crores in plant and machinery.
For small enterprises: The investment requirement is up to Rs. 10 crores and turnover is less than 50 crores in plant and machinery.
For medium enterprises: The investment requirement is up to Rs. 20 crores and turnover of less than 100 crores in plant and machinery.

b) For the service sector, the eligibility is decided by the amount invested in equipment.

For micro enterprises: The investment requirement is up to Rs. 1 crore and turnover of less than 5 crores.
For small enterprises: The investment requirement is up to Rs. 10 crores and turnover of less than 50 crores.
For medium enterprises: The investment requirement is up to Rs. 20 crores and turnover of less than 100 crores.

Advantages of MSME Registration

The various benefits of MSME registration are:

Lower interest on loans, from 1% to 1.5%
Advantage of license and certificates issued by the government
Ease of access to credit
Advantage of various tax exemptions
Possibility of the minimum alternate tax extended to 15 years
Rebates and concessions
A special advantage with regard to several tenders of the government

Some of the MSME Schemes Launched by the Government

The Women Entrepreneurship scheme, as the name suggests, is especially for women who are aspiring to launch their own business. The government helps with all the training, investment support, and advisory to launch and promote the business.
Udyog Aadhaar memorandum is a number of twelve digits provided by the government. It aids in getting loans, subsidies, and other facilities.
Quality management standards and tools, as the term suggests, help in the standardisation of the organisation.
Grievance monitoring system helps in formulating a grievance redressal mechanism by addressing various complaints with a standardised procedure.
Incubation scheme helps with government aid of up to 70 to 80 percent of financing and aid with product development and designing.

Also read:

1) MSME – Industries that form a Foundation for a Robust Economy
2) How is the Government helping Small Businesses & Startups fight the financial crisis?
3) What are Some Beneficial Government Policies for Small Home-Based Businesses in India?
4) What is Business Loan? A Complete Guide.

FAQs

Q. Is it mandatory for companies to register under MSME?

Ans. No, but as discussed above, MSME registration has many benefits, so it can help a business.

Q. An MSME registration certificate is proof of what?

Ans. It is proof that the business is registered as an MSME. A business receives it when the process of registration is complete.

Q. What is the validity of the MSME certificate?

Ans. As long as the business is operational or functioning, but most often for up to 5 years.

Q. Do individuals or companies register for MSME status?

Ans. It is for companies or enterprises and businesses and not for any individual, except in the case of a one-person enterprise.