What is MSME Registration
MSME Registration refers to the process of registering businesses categorized as Micro, Small, and Medium Enterprises. These classifications are determined by the scale of the business and the capital invested in machinery and equipment. MSMEs are vital to economic advancement, particularly in developing countries, as they foster job creation, spur innovation, and drive economic expansion.
Classification of MSMEs :
Micro Enterprises
Micro enterprises represent the smallest classification within MSMEs, often characterized by minimal employee counts and modest investments in machinery and equipment. They often operate at a local or community level, contributing significantly to grassroots economic development and employment generation.
Small Enterprises
Small enterprises are slightly larger than micro enterprises, with more employees and higher investment in machinery and equipment. These businesses are key players in several sectors, including manufacturing, services, and agriculture. They deliver goods and services to both local and regional markets, enhancing industrialization and contributing to value creation within the economy.
Medium Enterprises
Medium enterprises represent the upper end of the MSME spectrum, with more substantial investment, a larger workforce, and a broader market presence compared to micro and small enterprises. They often serve national or even international markets, driving competitiveness, innovation, and economic growth through their contributions to employment, exports, and technological advancement.
| Enterprise Type | Investment in Plant & Machinery/Equipment | Annual Turnover |
|---|---|---|
| Micro Enterprise | Up to ₹1 crore | Up to ₹5 crore |
| Small Enterprise | More than ₹1 crore and up to ₹10 crore | More than ₹5 crore and up to ₹50 crore |
| Medium Enterprise | More than ₹10 crore and up to ₹50 crore | More than ₹50 crore and up to ₹250 crore |
Frequently Asked Questions for MSME Registration
The previous system for MSME registration included completing forms known as EM-I and EM-II. In contrast, the current Udyam registration system simplifies the process for MSMEs, requiring only the Aadhaar and PAN details for registration. This newer method streamlines the registration steps and reduces the paperwork involved.
Your Udyam registration will be completed within two business days and you will be given the Udyam certificate on your registered email ID.
Udyog Aadhar was another procedure of registration for the Micro, Small, and Medium Enterprises. It was introduced to replace EM-I & EM-II. The unique identification number for Udyog Aadhar was known as Udyog Aadhar Memorandum. The Udyam registration is the latest procedure of registration for the Micro, Small, and Medium Enterprises. The unique identification provided for Udyam is known as the Udyam registration number.
No, a person cannot have 2 Udyam registration. A person can file for only 1 Udyam with his Aadhar. However, the other activities/ branches related to the enterprise must be mentioned under single Udyam registration.
Yes, the following are the turnover limit for Micro, Small, and Medium Enterprises :
(i) Micro enterprises: These enterprises must have turnover below Rs. 5 crores.
(ii) Small enterprises: These enterprises must have turnover below 50 crores.
(iii) Medium enterprises: These enterprises must have turnover below Rs. 250 crore.
There are various benefits of Udyam Aadhaar:-
- Collateral free loans
- Deduction in taxes
- Subsidy on patent registrations
- Credit facilities
- Financial support from the government
- ISO certificate reimbursement
Those enterprises that qualify under the prescribed definition of Micro, Small, and Medium Enterprises are eligible to apply for MSME registration.
Yes, the small retail/ wholesale shops also come under MSME and can get credit facilities from various financial institutions under MSME schemes.
Udyam certificate is valid for a lifetime. Once you have applied for Udyam registration with an Aadhar you can use it for a lifetime.
Yes, you can easily apply for a loan with your Udyog Aadhar certificate. Since the MSMEs are given the benefit of Primary Sector Lending by the government you can easily access the loans from various financial institutions without the need for collateral security and at low-interest rates.