An Overview: MSME Registration for Private Limited Company

What is MSME (Micro, small and medium enterprises)?

MSMEs (Micro, small, and medium enterprises) are integral to the economy, providing output, employment, and export opportunities. MSMEs significantly support the manufacturing sector by supplying a diverse range of products, raw materials, and components to larger industries. The Ministry of MSMEs' report 'MSME at a Glance' highlights that 36 million MSME units are currently in the country, which employs over 80 million people. These entities produce more than 6,000 products, contributing 8% towards the country's GDP and 45% of the total manufacturing output, and 40% of the exports. The significant contribution of MSMEs to the economy cannot be exaggerated, and it is essential to continue supporting and promoting these enterprises in the future.

What is MSME Classification?

When MSME registration was introduced in the year 2006, MSMEs were classified on the basis of the investment in plant and machinery or equipment. Later, the classification of MSMEs was revised, and annual investment was added as a criterion. The table below shows the classification of entities for MSME registration between micro, small and medium classes -

What is MSME Udyam Registration?

MSME registration can also be called Udyam registration, as Udyam is the government portal used for MSME registration. Although it is not mandatory to register, registering as an MSME can provide various benefits to the business in terms of taxation, credit facilities, loans, and setting up the business.

Which Entities are Eligible for MSME Registration?

All entities engaged in manufacturing, service, retail, or wholesale trade fulfilling the revised classification criteria are eligible for MSME registration. Given below is a list of entities eligible for registration -

• Individuals, start-ups, businesses and entrepreneurs.
• Private and public limited companies.
• Partnership firm
• Sole proprietorship firm
• Self-help groups (SHGs)
• Co-operative societies
• Trusts
• Limited Liability Partnerships (LLPs)

What are the Benefits of MSME Registration?

While MSME registration is not mandatory, MSME registration can have various benefits. Here are the advantages of registering as an MSME -

• MSMEs get bank loans at interest rates as low as 1-1.5%, which is much lower than regular loans.
• MAT credit can be carried forward for upto 15 years instead of 10 years.
• Cost of getting patents and setting up industry is lesser for MSMEs as MSME registration provides various concessions and rebates.
• MSME registration makes it easier to secure government tenders, as the Udyam Registration Portal is linked with the Government e-Marketplace and various state government portals, providing easy access to marketplaces and e-tenders.
• A One Time Settlement Fee applies for unpaid MSME dues.
• With MSME registration, businesses can take advantage of government schemes like the Credit Guarantee Scheme, Credit Linked Capital Subsidy Scheme, Public Procurement Policy, and protection against delayed payments. MSMEs are also eligible for priority sector lending from banks and benefit from a waiver of security deposits when participating in e-tenders.
• Additionally, MSMEs can include multiple activities, such as manufacturing or services, under one registration. Other benefits include subsidies for barcode registration, exemption from direct taxes, ISO certification fee reimbursement, electricity bill concessions, and special consideration in international trade fairs.

What are the Components of an MSME Registration Application?

The MSME Application for MSME Registration requires the following information:

• The applicant's name or the entity's name as per their Aadhar card.
• Social category (general, OBC, SC/ST) • Gender
• Physically demanding
• The organization's name and type.
• PAN Cards for individuals and entities
• Plant location
• Country, State, District, City, Tehsil, PIN Code, Proof of Office Address
• Applicant's phone number and email address.
• The date of establishment of the entity
• Bank account number and IFSC code
• The Business Activity of the Entity
• 2-digit NIC code based on the main activity
• Any other details about the entity.
• The number of employees
• The investment in plant and machinery

What are the Documents Needed for MSME Registration?

To register as an MSME, you need to provide the following documents along with the information mentioned above:

• The applicant's Aadhar Card
• PAN Card
• MSME registration is free and does not require any proof of documents. The PAN and GST-linked details are auto-populated on the Udyam portal.
• Businesses that are mandatorily required to register under GST must provide their GSTIN for MSME registration or Udyam registration on the Udyam portal.

What are the Steps for Obtaining MSME Registration?

To avail of the benefits announced by the Government for MSMEs, it is necessary to register your business on the Udyog Aadhar Memorandum (UAM) portal. Fortunately, the registration process is simple and completely free of cost for all.

For New Entrepreneurs Not Registered as MSME

• Step 1. New entrepreneurs and those having EM-II registration are required to select the “For New Entrepreneurs who are not Registered yet as MSME or those with EM-II” option on the Udyam portal.
  
  
• Step 2. Enter ‘Aadhaar number’ and ‘Name of Entrepreneur.’ Click on ‘Validate and Generate OTP’. Upon entering the OTP received on your registered mobile number, you can see a PAN verification page.
  
  
• Step 3. Now, enter the type of organization, PAN number and click on ‘Validate PAN’ button.
  
  
• Step 4. Fill out the Udyam registration form with your personal and enterprise details.
  
  
• Step 5. Enter the details of investment and turnover, select the declaration, and click on ‘Submit and Get final OTP’ button. After entering the OTP and submitting the form, the Udyam registration certificate is sent through email. You can also check the MSME registration status on the Udyam registration portal.
  
  

MSME Registration Process for Entrepreneurs Already Having UAM

• First of all, visit the Udyam portal. For those who already have UAM registration, click on ‘For those having registration as UAM.’ On the following page, enter the Udyog aadhaar number and select the OTP method.
• You can choose to receive OTP on either the mobile number associated with the UAM or the email Id entered. Now click on ‘Validate and Generate OTP.’
• Enter the OTP and fill out the Udyam registration form to complete the Udyam registration process.

How to Check MSME Registration Status?

An applicant can check the MSME Registration status by reference number and name using the following steps:

• Step 1: Visit the MSME Registration portal to track your application status.
• Step 2: Enter the 12-digit UAM number and the verification code as shown in the Captcha image.
• Step 3: Click the ‘Verify’ button after entering the 12-digit UAM number.
• Step 4: The MSME registration status of a business owner can be viewed.

Steps to Download MSME Registration Certificate

MSMEs receive an e-certificate known as a Udyam registration certificate from the Ministry of MSME. The MSME certificate, also known as Udyam or Udyog Aadhaar Certificate, is valid for a lifetime. To download your MSME certificate from the Udyam Registration website, simply follow these easy steps. To avail of the benefits announced by the Government for MSMEs, it is necessary to register your business on the ‘Udyog Aadhar Memorandum (UAM) portal’. Fortunately, the Udyog Aadhaar Registration process is simple and completely free of cost for all.

1. Step 1: Go to the Udyam link https://udyamregistration.gov.in/ and complete your MSME login.
2. Step 2: On the top right corner of the home page, you will see a Print/Verify drop-down menu.
3. Step 3: From the drop-down menu, choose the option Print Udyam Certificate. This will take you to the Udyami Login page.
4. Step 4: Fill in the details on the login page, such as your 16-digit Udyam Registration Number (URN) (format: UDYAM-XX-00-0000000) and the mobile number you used for the MSME registration application.
   Below these fields, choose one of the OTP options.
   • OTP on Mobile
   • OTP on Email
   Choose the option that suits you better and click Validate & Generate OTP.
5. Step 5: In the next step, enter the OTP and click Validate OTP & Print.
   You can now see your Udyog Aadhaar Certificate data on the home screen.
   To get a printed certificate copy, choose either Print or Print with Annexure from the top center of the page.
   If you select only the Print option, you will get only the MSME certificate.
   If you select Print with Annexure, you will also get the Udyam Aadhaar Memorandum (UAM) application along with the certificate.

MSME certificate can be saved on your computer or smartphone for future reference.

Are you eligible for MSME registration? If the answer is Yes, make sure you obtain your MSME registration and start availing of the various benefits it provides. Still, have queries or need assistance? Contact our tax experts!