The micro, small, and medium-scale businesses (MSMEs) are big contributors to India's Gross Domestic Product (GDP). Actually, over 110 million people are employed in MSMEs as well. However, these businesses have been facing a set of problems and issues in expanding their influence or presence.
To locate and assist such MSMEs, an initiative was taken by the Indian Government on May 13, 2020, regarding introducing a new criterion for the classification of MSMEs in India. As per this criterion for classification, all MSMEs in India will be known by the name ‘Udyam’ and will have to necessarily undergo a registration process referred to as the ‘Udyam Registration’. The process of registration through ‘Udyam Registration’ is now made obligatory for all MSMEs from July 1, 2020.
MSME stands for Micro, Small, and Medium Enterprises. MSME registration is a government initiative aimed at providing benefits and support to small and medium-sized businesses in India. The registration is voluntary and enables businesses to avail various incentives and assistance offered by the government.
The primary purpose of MSME registration is to promote the growth and development of micro, small, and medium enterprises by facilitating access to credit, subsidies, and other government schemes. It also helps in creating a database of MSMEs for statistical and policy purposes.
To qualify for MSME registration, a business must meet the eligibility criteria based on its investment in plant and machinery or equipment for manufacturing enterprises, or investment in equipment for service enterprises. The specific criteria vary for micro, small, and medium enterprises.
MSME registration has benefits like easy government loans from banks, lower rates of interest, subsidy for patents and trademark registration, exemption in a few direct tax laws, no risk of delayed payments, priority sector lending, and government schemes.
The process of obtaining MSME registration typically involves filling out an application form with the required details and supporting documents. The registration can be done online through the Udyam Registration portal, which replaced the earlier Udyog Aadhaar registration system.
MSME registration is an important step for small and medium-sized businesses to gain recognition and access government support for their growth and development
As an MSME business owner, some advantages of registering your business under the Udyam category are as follows:
Other Benefits in Brief:
The Micro, Small, and Medium categories of enterprises as classified by MSME are eligible to apply for MSME registration. A person alone cannot apply for MSME registration. A proprietorship firm, partnership firm, company, trust, and society having investment not exceeding Rs.50 crore and turnover not exceeding Rs.250 crore are eligible to apply for MSME registration.
Investment
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Annual Turnover
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Classification
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< Rs. 1 Crore
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Upto Rs. 5 Crores
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Micro Enterprises
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< Rs. 10 Crore
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Upto Rs. 50 Crores
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Small Enterprises
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< Rs. 50 Crore
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Upto Rs. 250 Crores
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Medium Enterprises
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It is not mandatory to have a GST number for registering your MSME.
Once the application form is submitted, it can take 2-3 days for the approval and registration to complete.
The Turnover limit of MSME is Rs. 250 Crore.
Yes, details such as PAN card, Aadhaar card and latest bank account details of business or proprietorship are mandatory in udyam registration.
Udyam registration is the new process for registering MSME launched by the Ministry of Micro, Small & Medium Enterprises on July 1, 2020. The government of India initiated Udyam registration as a substitute to the earlier method of Udyog Aadhar to make it easier for MSMEs to register with the government portal.