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|
|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|
|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|
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
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
B. For Those Who Already Have registered
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/-
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.
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.