MSME stands for Micro, Small and Medium Enterprises. The Micro, Small, and Medium Enterprise (MSME) sector are considered as the backbone of a developing economy like India. It was created to promote the development of micro, small, and medium enterprises. This sector is a prime contributor to manufacturing, employment, exports, and industrial units in India. The economy’s growth is dependable on the growth of the MSME sector. The MSME industries are also referred to as the Small Scale Industries (SSIs).

The MSME sector contributes to fifty percent of India’s Total Exports, forty-five percent of India’s Total Industrial Employment, and ninety-five percent of all industrial units of the country, and more than six thousand kinds of products are manufactured in these industries (According to msme.gov.in). When these industries grow, the economy of the country grows as a whole and flourishes.

Even if the Company is in the service line or the manufacturing line, registrations for both these parts can be procured through the MSME act. This registration is not yet made compulsory by the Government but it is beneficial to get one’s business registered under this because it provides a lot of benefits in terms of setting up the business, taxation, loans, credit facilities, etc.

The MSME became operational on 2nd October 2006. It was established to facilitate, promote, and develop the competitiveness of the micro, small, and medium enterprises.

The government of India has crafted the Micro, Small and Medium Enterprises Development Act or MSMED in the year 2006. According to the definition, the investment in machinery and plant for the micro should not exceed Rupees Twenty five lakh, and in the service industry, the investment should not exceed Rupees Ten lakh.

For the smaller companies, the investment in manufacturing and production industry should not exclude Rupees five crore and for the service industry, it can be over ten lakh rupees but not more than Rupees two crore. Lastly, for the medium-sized businesses, the investment in machinery and plant under production and manufacturing can be over five crore rupees but not more than ten crore rupees and for the service industry, it must not exceed ten crore rupees as well.

Entities that can benefit under MSMED Act through MSME Registration are the following as under:

1. Proprietorship firms,
2. Partnership firms,
3. LLPs,
4. Private Limited Company’s
5. Public Limited Companies

MSME Registration Process

Earlier MSME registration was known to be as a Small Scale Industry registration or SSI. The registration is not compulsory but necessary to enjoy various schemes run by the government. To get your business registered, you need to follow certain steps. Any businessman having a valid Aadhaar card number can apply for MSME Registration online. The steps to be followed are mentioned below:

1. Firstly the medium and small scale industry owner needs to fill a single form at the website, either online or offline.
2. If an individual wants to get more than one industry registered, he/she can do individual registration.
3. Once the form is filled and uploaded with relevant details, a registration number is provided. The MSME Registration Certificate will also be issued immediately at email.
4. The person can also offer self-certified certificates.
5. There is no registration fee required for this process.
6. As the government believes in environmental protection, there is no need for a physical copy of the MSME Certificate.

Documents Required

The following documents required for the MSME Registration process are as under:

1. Business Address Proof: In case the premise is owned by the owner of the enterprise, all you need is the possession letter, allotment letter, and property tax receipt or lease deed. In case the premise is rented then Rent receipt and a no-objection certificate from the landlord are needed. Also, any document evidencing the landlord’s ownership or any utility bill is to be submitted.
2. Copies of Sale Bill and Purchase Bill: The enterprise requires to submit copies of the bill of the products or services it sold and a copy of purchase bills for the raw material is purchased.
3. Partnership Deed/ MoA and AoA: In case the enterprise is a company, a copy of Memorandum of Association and Articles of Association, and certificate of incorporation must be submitted. If the business is a partnership firm, it must submit its partnership deed and registration certificate in case it is a registered entity.
4. Copy of Licenses and Bills of Machinery Purchased: In some cases, the applicant has to submit a copy of an industrial license which is to be acquired by giving an application to the Government of India. Moreover, all receipts and bills related to purchasing and installation of plant and machinery have to be kept safe and needed to be submitted on demand.

Benefits of MSME Registration

Some of the following benefits of MSME Registration are mentioned as under:

1. Low Bank Interest Rates.
2. MAT Carry forward for 15 years instead of 10 years.
3. Access to more Tenders which are open only to the MSME sector.
4. More preference for government license and certification.
5. Credit Access.
6. Subsidy on Patent Registration.
7. Barcode Registration Subsidy.
8. Exemption from Stamp Duty and Registration Fees.
9. Subsidy on NSIC Performance.
10. Protection Against Buyers.