What Does MSME Stand For?
Micro, Small, and Medium
Enterprises (MSME) are governed by the Micro, Small, and Medium Enterprises
Development Act of 2006. MSMEs, according to this act, are businesses that
specialise in the processing, production, and storage of goods and commodities.
MSME Characteristics
Let us look at the
characteristics of MSMEs:
● MSMEs
help businesses gain better access to domestic and international markets.
● MSMEs
promote product development, design innovation, intervention, and packaging as
business elements.
● MSMEs
are working to improve this sector’s technology and infrastructure.
● MSMEs
provide employment opportunities as well as loans.
●
MSMEs provide credit limits or funding assistance to
various banks throughout the country.
MSME Classification Restructure
Any business with an investment
of up to Rs 1 crore and an annual revenue of less than Rs 5 crore is classified
as “Micro.”
Any enterprise with an
investment of up to Rs 10 crore and an annual revenue of up to Rs 50 crore will
be classified as “Small.”
Any enterprise with an
investment of up to Rs 20 crore and an annual revenue of less than Rs
100 crore will be classified as
“Medium.”
MSME Loan Schemes Launched by the Government of India
The following MSME
schemes are offered by financial institutions and initiated by the Indian
government:
● Credit
Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) ● CLCSS stands for Credit Linked
Capital Subsidy Scheme.
● Credit
Guarantee Program
● PMMY’s
MUDRA Yojana
● Subsidy
from the National Small Industries Corporation (NSIC)
● The Prime Minister’s Employment Generation Programme (PMEGP)
● Prime
Minister’s Rozgar Yojana (PMRY)
● Loans
from PSB in 59 minutes
● India
Standup
●
India Startup
Characteristics of the Ministry of MSME (MoMSME)
● Works
to improve the lives of artisans and workers.
● Banks
provide credit limits or funding assistance.
● Promotes
entrepreneurship development and skill enhancement through specialised training
facilities
● Supports
technological advancement, infrastructure development, and modernization.
● Aids
in improving access to domestic and export markets.
● Modern
testing facilities and quality certification are available.
● Packaging,
product development, and design intervention are all supported.
The following are the key entities that work under the MoMSME:
● A
Program to Encourage Innovation, Rural Industries, and Entrepreneurship
(ASPIRE)
● Village
Industries and Khadi Commission (KVIC)
●
Mahatma Gandhi Rural Industrialization Institute
(MGIRI)
●
Micro, Small, and Medium
Enterprises National Institute (NIMSME)
● National
Small Business Administration (NSIC)
●
Funding Scheme for Traditional Industry Regeneration
(SFURTI)
Required Documents for MSME Registration
The only documents required for
MSME registration are an Aadhaar Card and a PAN Card.
MSME registration is entirely
online, and no documentation is required. The Udyam Registration Portal will
automatically retrieve PAN and GST-linked information on enterprise investment
and turnover from government databases. The Income Tax and GSTIN systems are
fully integrated with the Udyam Registration Portal.
GST is not required for
businesses that do not need to register for GST under the GST law. However,
enterprises that are required to obtain GST registration under the GST regime
must have GST registration in order to obtain Udyam Registration.
Those who have a UAM
registration or any other registration issued by any authority under the
Ministry of MSME must re-register in the Udyam Registration Portal by clicking
on the “For New Entrepreneurs who are not yet Registered as MSME or those
with EM-II” link.
Enterprises with UAM
registration must migrate to Udyam Registration by June 30, 2022. If
entrepreneurs with UAM registration do not migrate to Udyam Registration by
30/06/2022, their UAM registration will be null and void, and they will no
longer be eligible for the benefits provided to MSMEs.
Questions and Answers
1. Has MSME registration been transferred to Udyam Registration?
Yes, MSME registration, also known as Udyog Aadhaar
Registration, has been replaced by Udyam Registration. If any micro, small, or
medium-sized enterprises want to start a business, they can apply for
MSME/Udyam registration. The MSME/Udyam registration process is entirely
online. This registration entitles the company to numerous benefits and
subsidies.
2. Is MSME registration required?
No, enterprises that fall under the MSME category are not
required to apply for MSME registration. However, it is preferable to obtain
MSME/Udyam registration because the government provides many benefits to
enterprises that have MSME registration, such as loan facilities, easy access
to credit, low-interest rates, eligibility to many schemes, and so on.
3. Is an Aadhar card required?
Yes. An Aadhaar card is required to obtain Udyam
registration. If the applicant is not the proprietor, the partner’s and
director’s Aadhaar cards will be required.
4. Is it possible for both existing and new businesses to apply?
Yes, both existing and new businesses can apply for
MSME/Udyam Registration, as long as the existing unit is operational and meets
the registration threshold limits. Enterprises with a UAM Registration must
re-register for Udyam registration in order to take advantage of the MSMEs
benefits.
5. How long is the MSME registration certificate valid?
The Udyam Registration Certificate has no expiration date.
The certificate will not expire as long as the entity is ethical and
financially sound.
6. Can trading companies apply for MSME status?
Yes. Previously, MSME
registration only applied to the manufacturing and service industries.
The scheme does not apply to
trading companies. However, the government announced in July 2021 that the
wholesale and retail trades will fall under the MSME classification, and that
those businesses can apply for MSME registration. For the purposes of priority
sector lending, the Ministry of Micro, Small, and Medium Enterprises decided to
include retail and wholesale trade as MSMEs.
7. Do I need to register multiple manufacturing plants in different cities?
No, the MSME/Udyam Registration Certificate is only valid
for a single entity, regardless of how many branches or plants it has. However,
details about multiple branches or plants must be provided.
8. Whose Aadhaar number must be entered when completing the MSME registration form?
In the case of a company, the authorised signatory must
provide the PAN and Aadhaar number when completing the MSME registration form.
9. In the case of a partnership firm applying for MSME registration, whose Aadhaar number should be entered?
In the case of a proprietorship firm, the proprietor’s
Aadhaar number and PAN number must be entered. In the case of a partnership,
the managing partner must supply the PAN and Aadhaar number. In the case of a
partnership firm, the enterprise details on the MSME registration form will be
the details of the managing partner, and the entrepreneur details will be the
details of the entrepreneur.
10. Can I register a second MSME after registering the first?
When the enterprises are
distinct, i.e. founded under different names and registered or incorporated
separately, the proprietor of the enterprise may apply for MSME registration.
An enterprise, on the other hand, cannot apply for more than one Udyam
Registration. All activities, whether manufacturing or service, should be specified
or added to a single Udyam Registration. By clicking on the ‘Update Details’
option on the homepage, an entrepreneur can add additional activities to the
Udyam Registration.
11. Who can apply for an MSME registration?
The following
entities can obtain MSME registration if they meet the revised MSME
classification criteria of annual turnover and investment:
● Individuals,
businesses, startups, and entrepreneurs
● Limited
liability companies, both private and public,
● Solitary
proprietorship
● Partnership
corporation
● Partnerships
with Limited Liability
● Self-Help
Organizations
● Cooperative
organisations
● Trusts