MSMEs are very important for the growth of the Indian economy, as they play an important role by creating jobs, bringing new innovation, and economic growth. Recognizing their importance, the Indian government has established a robust framework to support and nurture these businesses. A crucial aspect of this support system is MSME registration, also known as Udyam Registration. This article will be a guideline for MSME business owners in India, highlighting the important information you need to know about the registration process of your MSME, the benefits you get with registration, and the criteria/s that make you eligible for getting formalized via MSME registration. Understanding these aspects is vital for getting various advantages offered by the government to MSMEs.
Explaining The Basics
MSME registration, now conducted through the official Udyam Registration portal (Online), is a government-recognized certification that recognizes and acknowledges a business as a MSME. Before Udyam Registration, businesses could register as either a Small Scale Industry (SSI) or obtain an Udyog Aadhaar Memorandum (UAM). The Udyam Registration portal was launched in 2020 and ever since getting formal recognition and becoming formalized has become easier than ever for new MSME businesses.
The goal of an MSME registration is to officially recognize and categorize MSMEs, making it easier for them to get eligibility for different government schemes, subsidies, and benefits which are specifically designed for their growth and development. This registration will make an MSME identifiable, making it easy to apply for an msme loan online, getting to engage government tender opportunities, and accessing other support programs. And since it is free of cost an MSME need not worry about cost involved compared to registering a private ltd company or an LLM as done by mainstream businesses.
On successful registration on the portal the MSME owner would get a digital certificate which is named Udyam Registration certificate, which is a digitally generated document that will be the official proof document to prove the formal existence of the MSME. It carries a unique registration number and a QR code, which can be used to verify its authenticity. This certificate doesn’t need to be renewed periodically as it has lifetime validity which makes it much much better than registration systems from the past.
Eligibility Criteria of MSME Registration
Several important points must be considered when determining your eligibility:
- Manufacturing or Service: Both manufacturing and service-based businesses are eligible for MSME registration.
- Composite Criteria: The classification is determined based on a composite calculation of both investment and turnover. If a business exceeds the limit for either investment or turnover, it will be classified in the higher category.
- Exclusions: Certain businesses, like those involved in primary production of agricultural produce, are not eligible for MSME registration.
- Existing Businesses: Businesses that were previously registered under EM-II or UAM are also required to migrate to the Udyam Registration portal.
The Registration Process
- Visit the Portal: Go to the official Udyam Registration portal.
- Enter Aadhaar Number: Provide your Aadhaar number, which will be used for authentication.
- Provide Business Details: Fill in the required details about your business, including the name, type of organization, PAN, address, investment and turnover details, and the NIC code (National Industrial Classification) that best describes your business activity.
- Verification: Verify the information provided.
- Generate Certificate: Once the information is verified, your Udyam Registration Certificate will be generated online. You can download and print it.
Benefits of MSME Registration
The following are the benefits an MSME would get if they would get formalized via Udyam registration:
- Priority Lending: MSMEs get unsecured business loan options from NBFCs and it is mandated by most lenders to atleast have an udyam registration to consider an MSME for loan lending.
- Credit Guarantee Schemes: CGTMSE and other gov based benefits can only be availed for registered MSMEs.
- Government Tenders: Getting tender opportunities need MSMEs to be formally acknowledged.
- Tax Benefits: If an MSME needs any benefits based on tax, they should be registered.
- Subsidies: The government has also come up with many subsidies on various aspects of business operations, such as technology upgrades, skill development schemes, and infrastructure development assistance all of which needs registration of business, a basic requirement.
- Support for Exports: MSMEs who are active in export business will also need registration for smooth flow and participation in export activities.
- Simplified Compliance: Certain compliance requirements are simplified for MSMEs.
- Access to Incubation Centres and Technology Centres: MSMEs can access incubation centres and technology centres to foster innovation and growth.
Conclusion
It is a very straightforward, easy online process that can be completed with minimal efforts and will open gates to a lot of benefits and opportunities for the growth of MSME. By understanding the eligibility criteria and the registration process, MSME owners will get government support, enhance their competitiveness, and contribute to the overall economic development of the country. Don’t wait any further to get your MSME registered via Udyam.
