You’ve arrived at the right site if you’re wondering if your firm is eligible for udyam registration. Before we get into the specifics of MSME registration criteria, let’s take a quick look at what MSMEs are.
MSME stands for Micro, Small, and Medium Enterprises.MSMEs are such an essential part of India’s rising economy that the government has set up a separate ministry to support and promote them. MSMEs benefit from the MSMED Act of 2006, which provides lower-cost loans, tax incentives, and a variety of programs and subsidies.
MSME registration can provide you with a number of benefits if you are an existing or aspiring entrepreneur. Registration as an MSME is not required. You should, however, take advantage of the government’s incentives for small enterprises and entrepreneurs if you are serious about doing so.
Who is eligible to apply?
Any business entity can register for an MSME or Udyog Aadhaar. Ownership firms, LLPs, public and private limited companies, Hindu Undivided Family (HUF), Partnership firms, One Person Companies, Co-operative Societies, Association of Persons, and any other type of business can apply for MSME registration. An Aadhaar number is required for MSME registration. Any entrepreneur who wishes to register his or her firm with the government must have a valid Aadhaar number.
The MSME Development (Amendment) Bill, 2018, established a new classification system. A company with a revenue of less than 5 crores is considered a micro-enterprise. Other slabs are 5-75 crores for small businesses and 75-250 crores for medium-sized businesses.
Documents required for MSME registration include the following:
MSME registration is available online as well as in person. There are no fees to register, and the process is quick and painless. The MSME registration documents you’ll require are as follows:
A possession letter, property tax receipt, lease deed, allotment letter, municipal license, utility bills, rent receipts, and a No Objection Certificate from the landlord would all suffice as proof of address.
Copies of Sale and Buy Bills: For each raw material used in the manufacturing process, a purchase bill must be filed. Every manufactured commodity or service must also be accompanied by a sales bill.
Legal Incorporation Documents: If the organization is a partnership firm, the partnership deed and registration certificate are required. If the entity is a corporation, a copy of the Memorandum and Articles of Association, as well as a certificate of incorporation, must be submitted. A copy of the board resolution authorizing the company’s MSME registration is also required.
Other Asked Documents: After filing an application, the applicant may be required to present a copy of an industrial license received from the Indian government. All invoices related to the purchase and installation of machinery and equipment must also be submitted.
The procedure for registering is as follows:
MSME registration may be done online. Although it is not required before beginning a business, it is strongly recommended due to the benefits it offers. You’ll need to fill out an application form with the following information:
- Aadhar number of the applicant
- The applicant’s name, gender, PAN number, email address, and mobile number
- The organization’s PAN, location, and address
- The number of people you intend to hire and when you intend to start your business
- IFSC code and bank account number
- The principal business activity of the company is
- NIC code (two digits)
- Plant and machinery/equipment purchases
Once the registration process is done, you will obtain the MSME certificate. The Ministry will not publish it in physical copy. A virtual certificate will be sent to you.
Suggested Read- Udyam Registration Portal
What are the benefits of having your small business registered?
There are various benefits to registering your small business. According to the government, the following are the top six primary benefits of MSME registration:
- To begin with, if you do so, you will be able to obtain bank loans with much cheaper interest rates. In fact, it could drop to as low as 1% or 1.5 percent. This is, as you may know, a much lower interest rate than is commonly paid on company loans.
- A number of tax advantages will also be available to you.
- If you just pay the bare minimum in alternate taxes, you can earn credit. This can be raised from the regular ten-year restriction to a maximum of fifteen years.
- As an MSME, you have sole authority to apply for a range of government contracts.
- There are also a lot more credit options available to you. You’ll also receive a number of discounts and rebates to aid in the start-up of your firm or the completion of business-related tasks such as patent registration.
- You’ll have an advantage over the competition when it comes to government-issued udyam certificates and licenses.