MSME REGISTRATION

MSME stands for Micro, Small and Medium Enterprises. The MSMEs are key contributors to the socio-economic development of the country. The MSMEs cover almost 95% of industrial units, 50% of exports and 45% of employment. Opting for MSME registration is not a statutory mandate; however, it is advisable to obtain the benefits of the Mirco, Small and Medium Enterprises Act. The initiative of MSME started functioning in 2006 to create a competitive environment and encourage small businesses to ensure speedy development and boost the economy.

The MSMEs are categorized in manufacturing sectors and service sectors. These two sectors have been further classified based on the investment. The classification has recently been reset based on investment and annual turnover to create a greater scope of growth for the MSMEs. Below is the reset classification of the micro, small and medium enterprises.

 

Criteria	Micro Enterprises	Micro Enterprises	Medium Enterprises
Investment	Less than Rs. 1 Cr	Less than Rs. 10 Cr	Less than Rs. 50 Cr
Annual Turnover	Less than Rs. 5 Cr	Less than Rs. 50 Cr	Less than Rs. 250 Cr

In the earlier classification, manufacturing sectors and service sectors were allotted different investment limits. The maximum limit of investment was higher for manufacturing sectors than service sectors. However, the previous differences have been removed in the new classification. The classification given in the above table is for both manufacturing sectors and service sectors.

MSME Registration Benefits
The reason behind MSME registration being appealing is the wide-ranged benefits. Here are the MSME registration benefits.

1. MSME registered enterprises can avail loans at lower interest rates than regular loans. Loans can be availed at an interest rate of as low as 1% to 1.5%.
2. MSME certificate holders can enjoy tax exemption under the MSME Act.
3. MAT or minimum alternate tax can be extended to 15 years from the regular 10 years.
4. MSME registered enterprises gets preference for government-issued license and certificates.
5. By getting registered under MSME, the cost of patenting and industry set up reduces due to various rebates and concessions.
6. Many government tenders are given to only MSME registered enterprises.
7. An MSME gets easy access to credit.

DOCUMENTS REQUIRED FOR UDYOG MSME REGISTRATION
The important documents that are mandatory for MSME registration are given below:

1. Address Proof (of Business)

2. GST Number
3. Rented Property: NOC from the landlord, Rent receipt, and a utility bill or its equivalent are mandatory as a proof of landlord’s ownership
4. Self-owned Office: For self-owned offices, one must have allotment letter, possession letter, property tax receipt, or lease deed. If a municipal license exists against the business name or its proprietor, director or partner, then no need of a possession document
5. Receipts/copies of every sale and purchase bills
6. Bills of machinery purchased and the copy of important licences
7. Articles of Association (AoA) and Memorandum of Association (MoA)/Partnership Deed along with the copy of board resolution and incorporation certificate