MSME Registration in India by Online XBRL

While acquiring MSME Registration in India is not required, it should be noted that entities or organizations with MSME Registration are entitled to partake in numerous schemes and advantages established by the Government. MSME Registration is obtained following the MSMED Act 2006.

MSME stands for Micro, Small and Medium Enterprises. It was a term introduced by the Government of India through the agreement with Micro, Small and Medium Enterprises Development (Act), 2006.

The Ministry of Micro, Small and Medium Enterprises has issued a notification dated 26th June 2020 regarding revising the definition of MSMEs and process registration. Apart from the old criteria of classification of MSMEs based on investment in Plant and Machinery / Equipment, an additional criterion of turnover has been included.

On Wednesday, delivering the economic package, part of the Aatma nirbhar Bharat Abhiyaan, FM Nirmala Sitharaman, announced revisions in the definition of Micro, Small and Medium Enterprises (MSME). Earlier, MSMEs were defined based on investments, but from now, turnover will also be included in the company's definition.

FM Sitharaman stated that there would be no more difference between Manufacturing and Service MSMEs.

“Earlier, the criteria for manufacturing units and service units were different. Now those distinctions between Manufacturing and Service MSMEs are being removed. They will all be defined similarly,” she said.

Existing and Revised Definition of MSMEs

Existing MSME Classification
Criteria: Investment in Plant & Machinery or Equipment
Classification Micro Small Medium
Manufacturing Enterprises Investment < INR. 25 lakhs Investment < INR. 5 crore Investment < INR. 10 crore
Services Enterprise Investment < INR. 10 lakhs Investment < INR. 2 crore Investment < INR. 5 crore

New MSME Classification
Criteria: Investment and Annual Turnover
Classification Micro Small Medium
Manufacturing & Services Investment < INR. 1 crore OR Turnover < INR. 5 crore Investment < INR. 10 crore OR Turnover < INR. 50 crore Investment < INR. 20 crore OR Turnover < INR. 100 crore

Benefits of MSME Registration

  1. Udyam/MSME Registration has many benefits: availing Government benefits/ MSME/ Subsidies/ Low-Interest Loans/ Collateral Free Loans, etc., just registering under the new Udyam scheme. Ex- Direct tax laws rules exemption, Patent registration subsidy, Interest rate Subsidy on Bank loans, Collateral free loans from banks, Ease of obtaining registrations, licenses and approvals etc.
  2. There will be no need for renewal of the Registration
  3. Registration procedure is all digitized and based on self-declaration
  4. Any number of activities, including manufacturing, service, or both, may be added to one Registration.
  5. Less paperwork and less cumbersome procedure
  6. Far from the regular Minimum Alternate Tax (MAT) period of 10 years for credit, MSMEs are enabled to move further this limit to 15 years for credit against MAT.

Requirement for MSME Registration

1.Only Aadhar Number is required

In case of Proprietorship Aadhar of Proprietor
In case of Partnership firm Aadhar of managing partner
In case of Hindu Undivided Family (HUF) Aadhar of Karta
In case of Company/ Limited Liability Partnership/ Cooperative Society/ Society/ Trust Aadhar of Authorized Signatory

Having PAN & GST Number is mandatory from 01.04.2021

Procedure for MSME Registration:

Every organization or person having EM-II or UAM registration or any other registration issued by any authority under the Ministry of MSME will have to re-register.
An enterprise cannot file more than one Udyam Registration.

A. For Registering As A New Entrepreneur

  1. New entrepreneurs will click on the option “For New Entrepreneurs who are not Registered yet as MSME or those with EM-II,” as shown on the home page.
  2. After clicking “For New Entrepreneurs who are not Registered as MSME or those with EM-II,” a registration page opens.
  3. After that person needs to enter the Aadhar number and name of the enterprise in the box provided and click “Validate & Generate OTP.”
  4. After clicking the validate button, PAN card details are to be filled in, and after verification of PAN and filling in all asked udyam registration details, Registration will be completed.

B. For Those Who Already Have registered

  1. For those already having UAM registration and want to migrate to Udyam or Re-Register UAM, click the button “For those already having registration as or “For those already having registration as UAM through Assisted filing.”
  2. For those already registered, click on “For those already having registration as EM-II or UAM” or “For those already having registration as UAM through Assisted filing,” as shown on the home page.
  3. After clicking “For those already having registration as EM-II or UAM” or “For those already having registration as UAM through Assisted filing,” a registration page opens.
  4. After that person needs to enter Udyog Aadhar number and select the OTP option. Option to obtain OTP on mobile or email. And then click on “Validate & Generate OTP”.
  5. After clicking the validate button, fill in all udyam registration details, and Registration will be completed.

Post MSME Registration Process

  1. A permanent registration will be allotted after Registration
  2. After completion of the Registration, a fresh registration certificate will be allotted, which can be downloaded by clicking on “Print/Verify,” or you can also print the certificate by clicking on “Print Udyam Registration Certificate,” as shown on the home page.

Penalty in case of misrepresentation of facts :
Penalty in case of misrepresentation or attempting to suppress the facts and figures shall be punishable :

In case of 1st Conviction Fine upto Rs. 1000/-
In case of 2nd or subsequent Conviction Min – Rs. 1000/-
Max – Rs. 10,000/-

Frequently Asked Questions

MSMEs play an important important role in economic and national development. They generate jobs and work together to develop backward and pastoral communities.

Yes, MSME/ Aadhar Udyog will be replaced with Udyam Registration on 26th June 2020. Udyam Registration is a whole new procedure of MSME registration launched by the Ministry of Micro, Small and Medium Enterprises effective from 1st July 2020 and came to be known as Udyam Registration according to a notification published by the Ministry of MSME on 26th June 2020.

This Act enables the promotion and development and enhances the competitiveness of micro, small and medium enterprises.

Udyam registration is a process by which MSMEs can avail various benefits from the Government, for example- reimbursement in electricity bills, government preferences in tender and international trade fairs, Subsidies in patent fees and bar code registration and many more.

Yes, traders are also eligible to register in Udyam registration and get credit facilities for their business requirements from various Banks and financial institutions.

No, one cannot have 2 Udyam registration on one Aadhar card. If your organization is involved in more than one activity or has more than one branch, all the branches and activities related to the business must be stated under the single Udyam Registration.

  1. Click on “Print/Verify” as shown on the home page
  2. After clicking the drop-down button, click on " Print Udyam Certificate.”
  3. A page will open, and now enter the Udyam Registration number and the registered mobile number. And then, choose the OTP option; then click on “Validate & Generate OTP.”
  4. After entering the OTP, click the download button, and the certificate will be downloaded.

According to the new registration portal, it is nowhere mentioned in the Act or the notification issued by the Ministry about the validity period of the Udyam Registration Certificate.

Therefore, it can be assumed that the Registration is valid until the organization's existence, so there is no requirement for renewal.

In terms of the RBI circular, banks are instructed not to accept collateral security in the case of loans up to Rs 10 lakh extended to units in the MSE sector. Additionally, banks may based on good track record and fiscal position of MSME units, increase the limit of releasing the collateral requirement for loans up to Rs.25 lakh with the prior approval of the appropriate authority.

The Government gave the new Udyam Registration Portal, which is the MSME Department's other action to enlist the new way for enrollment in MSME. The main aim of introducing the new Udyam Registration portal is to simplify the procedure and save time. Now small organizations can easily register themselves on the new portal.

Udyam registration replaces the old process of Udyog Aadhar, which was very confusing, complex and time consuming as well. It required a lot of paperwork. But now, under Udyam Registration, it is an easier, less time consuming and paperless process.

There is no fee billed for Registration under Udyam. Charging the registration fee will dampen the spirit of MSME to register and also affect the financial health of this sector.

Online XBRL is just few clicks away, yes, it is the best platform where you get MSME registration certification now.