MSME stands for Micro, Small, and Medium Enterprises. According to the MSMED or Micro, Small, and Medium Enterprises Development Act of 2006, enterprises are classified into two types which are as follows
- Manufacturing Enterprises are the enterprises that are engaged in the production or manufacturing of goods in the industry.
- Service Enterprises are the enterprises that are engaged in rendering or providing services.
MSMEs or Micro, Small, and Medium Enterprises contribute primarily to the socio-economic development of our country. MSMEs are governed by the Ministry of Micro, Small & Medium Enterprises in India. The Enterprises are required to be registered under the MSMED or Micro, Small and Medium Enterprises Development Act to avail benefits. The Registration of MSME is very important, as it allows these enterprises to avail benefits from the various schemes initiated by the government in various circumstances. The MSME sector enterprises contributes more than 5000 different types of products/services are manufactured/provided by these industries units as per the data provided on the official website of MSME. When these units grow, the economy of the country flourishes and grows. These industries are also known as small scale industries.
The Government of India has introduced ‘Udyog Aadhaar’ under Ministry of Micro, Small & Medium Enterprises, which is also known as Aadhaar for Business. It is a unique 12 digit Government identification number issued by the Ministry of MSME for all small and medium enterprises and small scale industries. These business entities are registered through this process as MSME with their Aadhaar Card Number.
On 13th May 2020, Finance Minister of India has announced the revision in classification of MSME Criteria with turnover along with the investment. The difference between the manufacturing and services enterprises are removed.
Benefits of MSME Registration
The benefits of MSME Registration in India are as follows:
- In India, bank loans provided to the MSMEs become extremely cheaper as the interest rate is very less. The interest rate on loans is much lower than interest on regular loans. In 2020, Finance Minister has introduced Atma-nirbhar Bharat Abhiyaan Economic Package. This scheme provided interest-free loans to the MSMEs.
- There is several tax subsidies offered to the MSMEs that are registered in India.
- There are several government tenders that are only available for the MSME Industries.
- The MSME industries get an easy access to credit under various scheme of Government of India.
- Once the MSME is registered, the cost of receiving a patent is reduced, or the cost of setting up of the industry is reduced and various other intellectual property rights can be applied by MSMEs as many reimbursements and concessions are available to these industries.
- The businesses registered under MSMEs are given higher preference for government certification and license.
- For all non-paid amounts of MSMEs, there is a One Time Settlement Fee.
Who can apply for MSME Registration?
Anyone who successfully accomplishes one or multiple of the criteria mentioned below is qualified and eligible to apply for MSME registration in India:
- Sole proprietor
- Hindu Undivided family
- Limited liability partnership
- Partnership firm having another party as his/her association
- One Person Company
- private limited company
- Production Company which is actively involved in the production of materials.
- Co-operative societies.
Documents Required for MSME Registration in India.
Following are the list of documents and information that one is required to provide as per the application form for MSME Registration in India.
- The applicants Aadhaar Card.
- The name of the Owner- in accordance with the Aadhaar Card.
- The Social category of the applicant- whether the applicant belongs to the General, SC, ST, or OBC category.
- Gender of the applicant.
- The Physical status of the applicant- whether the applicant is physically disabled or not.
- The name of the enterprise.
- The type of enterprise- select from list given in the form.
- The PAN Number.
- The Official Address of the enterprise’s plant.
- The Location of the enterprise’s plant.
- The Date of incorporation of the enterprise.
- Previous registration details of the enterprise, if any.
- Bank details associated with the enterprise.
- The activity of the enterprise- chooses between “Manufacturing” or “Service.”
- The NIC Code.
- The information related to Employment- total number of employees working in the organization of the applicant.
- The details of Investment in machinery and plant.