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MSME Registration in India – Fees, Benefits & Documents
Udyam registration or MSME registration is a government certificate that is designed to encourage Micro, Small, and Medium Enterprises (MSMEs) in India. It provides financial support with tax benefits and government schemes to assist in business development and sustainability. The Udyam registration portal provides an easy and convenient method to complete MSME registration process. A business can obtain the certificate after registration if it meets the MSME classification requirements based on investment size and annual turnover. The MSME certificate offers business priority sector lending with lower interest rates and simplified compliance responsibilities.
The MSME classification is based on investment in plant and machinery and annual turnover of a business to provide financial support to various business types. MSME registration online requires businesses to submit documents like Aadhaar and PAN details. The MSME registration process does not impose any processing fees which enables all qualifying businesses to get this certificate. The Udyam certificate remains valid for the lifetime of a business. Businesses that get the MSME certificate can prove legal legitimacy, access public tenders and achieve legal protection against delayed payments.
Table of Content
What is MSME Registration?
MSME Registration is also known as Udyam Registration. The Government of India issues MSME certificate to Micro, Small, and Medium Enterprises (MSMEs). The MSME udyam registration assists MSMEs in redeeming several benefits from government schemes for their establishment and growth. The MSME Udyam registration has replaced the old Udyog Aadhaar memorandum (UAM) registration process. Enterprises can apply for MSME registration online through self-declaration and obtain a unique MSME registration number. The Udyam Registration certificate is issued digitally to allow access to subsidies, loans at lower interest rates, and priority sector lending. Enterprises can check their status through the MSME registration check or by PAN number.
Classification of MSME
The MSMEs are classified based on their investment in plant and machinery and annual turnover. The current revised MSME classification is structured below in which the annual investment and annual turnover determine whether a business should be considered as an MSME or not:
MSME Classification (Based on Investment & Turnover Limits)
Enterprise Category |
Investment Limit |
Turnover Limit |
||
|---|---|---|---|---|
1 |
Micro Enterprise |
Up to ₹2.5 crore |
Up to ₹10 crore |
|
2 |
Small Enterprise |
Up to ₹25 crore |
Up to ₹100 crore |
|
3 |
Medium Enterprise |
Up to ₹125 crore |
|
Benefits of MSME Registration
MSME Registration allows Micro, Small, and Medium Enterprises to redeem government schemes and subsidies such as Credit Linked Capital Subsidy, Public Procurement Policy, Credit Guarantee Scheme, and many more. The MSMEs are given loans from the banks as the Udyam registration assures priority sector lending.
Access to Government Schemes: Registered MSMEs can benefit from schemes like the Credit Linked Capital Subsidy, Public Procurement Policy, and Credit Guarantee Scheme.
Priority Sector Lending: MSMEs can easily access loans with lower interest rates (as low as 1% to 1.5%) through priority sector lending.
Easier Business Credit Approvals: Businesses with Udyam registration can easily take bank loans and government tenders.
Protection Against Delayed Payments: The MSME Development Act provides legal protection to MSMEs to ensure timely payments.
Reduced Compliance and Cost Benefits: Registered businesses benefit from lower MSME registration fees, simplified GST compliance, and lower electricity tariffs.
Who Can Apply for MSME Registration?
Proprietorships
Hindu Undivided Family (HUF)
Partnership Firms
One-Person Companies (OPCs)
Private Limited Companies
Limited Companies
Producer Companies
Limited Liability Partnerships (LLPs)
Any association of persons
Cooperative societies
Any other undertaking
Documents Required for MSME Registration
To apply for an MSME certificate, businesses must submit the following documents on the Udyam registration portal:
Aadhaar Card
PAN Card
Business Address Proof
Bank Account Details
Basic Business Activity
NIC 2-Digit Code
Investment Details (Plant/Equipment information)
Turnover Details (As per New MSME classification)
Partnership Deed
Copies of Sales and Purchase Invoice
Copies of Licences and Invoice of Purchased Machinery
How to Apply for MSME Registration Online
Follow the below-listed process to apply for and obtain the MSME certificate through the Udyam registration portal:
Step 1 – Visit the Udyam Registration Portal.
Step 2 – Click on ‘For new entrepreneurs who are not registered yet as MSME or those with EM-II’.
Step 3 – Enter your ‘Aadhaar number’ and ‘Name of the entrepreneur’, then validate via OTP.
Step 4 – Provide your PAN number, business details, and other required information.
Step 5 – Fill in details such as enterprise name, address, bank details, NIC code, and number of employees.
Step 6 – Enter investment and turnover details, then submit the declaration.
Step 7 – Validate using the final OTP and submit the form.
Step 8 – Receive the MSME registration number and download the online MSME certificate.
MSME Registration Fees
The government does not charge any fee for MSME registration. Businesses that wish to obtain the MSME certificate can apply through the Udyam registration portal for free.
Note: Professional Fee for MSME Registration is ₹1,000 (exclusive of GST).
MSME Registration Validity
The Udyam/MSME Certificate does not have an expiry date and it remains valid for as long as a business is ethical and profitable. The MSME registration remains valid for the lifetime of a business.
MSME Registration Renewal
Businesses do not need to apply for MSME renewal since it does not expire and has a lifetime validity. However, the MSME certificate must be renewed with updated Income Tax Returns (ITR) and Goods and Services Tax Returns (GSTR) details for the last fiscal year annually to ensure appropriate MSME classification based on the latest operation, investment, and turnover details. The renewal for MSME registration can be done online through the Udyam registration portal.
Businesses need to provide their Udyam Registration Number, PAN, GSTIN, ITR filed in the previous year, and registered mobile number to apply for MSME Registration renewal. There is no processing fee for MSME certificate renewal since it is free of cost by the government.
Conclusion
MSME registration, also known as Udyam registration, is very important for Micro, Small, and Medium Enterprises to get government benefits, subsidies, and financial assistance. The process for MSME registration online is easy, with minimum documentation and no government fees.
Registered businesses can benefit from priority sector lending, tax exemptions, quick loan approvals, lower interest rates, and protection against delayed payments. MSMEs do not need to renew the Udyam certificate as its validity remains for a lifetime but it needs to be updated every fiscal year with updated investment or turnover information. By getting an MSME registration certificate, businesses can assure long-term growth and eligibility for various government schemes and incentives aimed to support small businesses in India.