MSME Registration Certificate in India

MSME stands for Micro, Small, and Medium Enterprises and is the central backbone of a country like India. The Indian economy is a developing one and is in need of elements that would assure the success and growth of the economy. MSME is also known as Small-Scale Industries and help generate a lot of employment opportunities in the country.

A company or entity seeking MSME registration can belong to either the manufacturing or production sector or the service industry. MSME registration is optional as of the current date, and entities should understand that registering under MSME will provide them with various benefits, including tax advantages, loan and credit facilities, and other factors that aid in business development.

Understanding MSME

MSME registration is a combination of Micro, Small, and Medium enterprises. The basis for determining the category to which an entity essentially belongs in MSME would be based on the investment made in plant and machinery and the turnover earned during the year.
The following are the category and their investments:

1. Micro Enterprise – For an entity to be classified as a micro-enterprise, the investment made in plant and machinery should not exceed INR 1 crore. Also, the turnover earned during the year should not exceed INR 5 Crore.
2. Small Enterprise – For an entity to be classified as a small enterprise, the investment made in plant and machinery should not exceed INR 10 crore. Additionally, the turnover earned during the year should not exceed ₹50 Crore.
3. Medium Enterprise – For an entity to be classified as a medium enterprise, the investment made in plant and machinery should not exceed INR 50 crore. Also, the turnover earned during the year should not exceed INR 250 Crore.

Prior to this, the threshold limit for exemption was different for entities based on the sector they belonged to, which included manufacturing and services. The following were the classifications or categories that existed:

– In the case of an entity belonging to the manufacturing sector:

1. Micro Enterprise– Less than INR 25 Lakhs
2. Small Enterprise – Between INR 25 Lakhs and INR 5 Crores
3. Medium Enterprise – Between INR 5 Crore and INR 10 Crore

– In the case of an entity belonging to the service sector:

1. Micro Enterprise– Less than INR 10 Lakhs
2. Small Enterprise – Between INR 10 Lakhs and INR 2 Crores
3. Medium Enterprise – Between INR 2 Crore and INR 5 Crore

Online Registration Procedure for MSME

To avail of the MSME Registration Certificate, an entity must first obtain registration under the MSME scheme. The following shall be the procedure or steps that the entity should follow to avail of such registration.
The MSME registration shall be done online by visiting the portal of the government, namely, ‘udyamregistration.gov.in’. For these, the following two categories shall be made available:

1. Registration of new entrepreneurs, i.e., holding EM-II (Entrepreneurship Memorandum – II) or entities not registered as MSMEs yet.
2. Registration of those having UAM (Udyog Aadhar Memorandum) and the ones with UAM acquired through Assisted Filing.

Registration of new entities, i.e., holding EM-II (Entrepreneurship Memorandum – II) or entities not registered as MSMEs yet

1. The applicants falling under this category shall click on, ‘For New Enterprises who are not Registered yet as MSME or those with EM-II’ provided on the homepage of the website.
2. This will lead to a page where the form requests details of the Aadhaar number and the name of the business owner or entrepreneur.

iii. Once the details are entered, now press the ‘Validate and Generate OTP’, which would generate OTP to the mobile number registered with the Aadhar Card.

1. A page for PAN verification shall appear upon successful validation of the details using OTP.
2. Nowhere shall the ‘Type of Organization’ and PAN details of the business be entered, after which the validation button shall be applied. The portal would now retrieve the PAN details from the Income Tax Portal or the government database and validate them.
3. Once the PAN has been successfully verified, a Udyam Registration form will appear. Here, the details, including mobile number and email address, should be given. After this, the details of the plant will also be provided.

vii. Along with this, the turnover details shall also be filled out. The number of employees and such other information shall be furnished.
viii. When all the necessary details are filled out, the button named ‘Submit and Get Final OTP’ shall be clicked. This will complete the MSME registration process, and a message stating the same, along with a reference number, will be generated automatically.

1. Now, on the basis of the completion of the verification of details furnished, the registration certificate shall be issued by the MSME authority.

Registration of those having UAM (Udyog Aadhar Memorandum) and the ones with UAM acquired through Assisted Filing

1. The applicants falling under this category shall click on ‘For those having registration as UAM’ or ‘For those already having registration as UAM through Assisted filing’ on the website homepage.
2. Now, the applicant can choose to receive the OTP for validation using the email address or mobile number provided under the UAM.

iii. A page where the Udyog Aadhar Number shall be entered would be opened, along with two options for generating OTP. Enter your Aadhaar number and select an option for OTP.

1. After choosing an appropriate option, click on ‘Validate and Generate OTP’, which will initiate the action. The OTP shall be generated, and the applicant shall fill it out on the website.
2. On validation of the details filled in using OTP, registration details are to be filled out on the MSME registration form, and this will mark the completion of the MSME registration with Udyam.

Documents Required

There are specific documents that must be provided to complete the registration of an MSME successfully and obtain a certificate. This mainly includes the Aadhaar and PAN card details. No additional documents or certificates are required as proof. The whole process can be initiated and completed online.

Upon entering the PAN details pertaining to the investment and turnover, they will be automatically fetched by the Udyam website or portal from the GST database. This is possible because the Udyam Portal for Registration is fully integrated with or linked to the Income Tax and GST information systems.

Any person or entity that should mandatorily acquire GST registration as per the GST Law should have taken registration under GST prior to taking registration under MSME. The registration fees for MSME registration are nil, and no registration fees will be charged for MSME registration.

Registration Certificate of MSME

Once the entrepreneur completes the registration procedure, a message will be automatically generated, along with a reference number pertaining to the application. The Udyam Officials, upon receipt of the registration form, shall verify it and also retrieve data from the GST and Income Tax systems.

Upon successful completion of the verification, the Ministry of MSME shall issue the Udyam Registration Certificate or the MSME Registration Certificate to the entrepreneur, which will be sent to their email address. This shall be valid for a lifetime and does not require any renewal.

To get the certificate online, the entrepreneur should do the following:
– Visit the website or the online portal and click on the ‘Print/Verify’ tab.
– Now, click on the ‘Print Udyam Certificate’ option that is made available.
– A page asking for the Udyam registration number, mobile number, and OTP option.
– Now, click on the Validate and Generate OTP button.
– Enter the OTP generated and validate it. Now, the MSME certificate will appear; please print it.

Hence, we can now conclude that the Udyam shall issue the MSME registration certificate upon the successful completion of the registration process. The MSME registration would open doors and simplify many processes for an entrepreneur and their entity, including taxation, availing of credits or loans, and various other benefits.

Conclusion

In India, any business or enterprise that falls under the category of micro, small, or medium-sized enterprises (MSMEs) can apply for MSME registration. The eligibility criteria for MSME registration are based on the investment made in plant and machinery or equipment for manufacturing or service enterprises. MSME registration provides several benefits to businesses, including easy access to credit, tax exemptions, and government subsidies, among others.