The Government of India has introduced MSME or Micro, Small, and Medium Enterprises in agreement with Micro, Small and Medium Enterprises Development (MSMED) Act of 2006. These enterprises primarily engaged in the production, manufacturing, processing, or preservation of goods and commodities. Micro Small and Medium Enterprise (MSME) registration (also known as “Udyam Registration”) The MSMED Act provides for the promotion, development, and enhancement of competitiveness of micro, small, and medium enterprises (MSMEs).
MSME registration offers various benefits and support measures to eligible businesses, including access to financial assistance, subsidies, schemes, and priority in government procurements. It also helps in availing certain statutory benefits and protections.
The criteria for classification as an MSME are based on the investment in plant and machinery or equipment for manufacturing enterprises, and on the investment in equipment for service enterprises. As of September 2021, the classification criteria are as follows:
Micro Enterprise:
Manufacturing: Investment in plant and machinery should not exceed INR 1 crore
Service: Investment in equipment should not exceed INR 10 lakhs
Small Enterprise:
Manufacturing: Investment in plant and machinery should be more than INR 1 crore but not exceed INR 10 crores
Service: Investment in equipment should be more than INR 10 lakhs but not exceed INR 2 crores
Medium Enterprise:
Manufacturing: Investment in plant and machinery should be more than INR 10 crores but not exceed INR 50 crores
Service: Investment in equipment should be more than INR 2 crores but not exceed INR 5 crores
To register as an MSME, the business owner can follow these steps:
Online Registration: The registration process for MSME can be done online through the Udyam Registration portal (https://udyamregistration.gov.in/). The portal requires the business owner to provide information about the business, including Aadhaar number, PAN number, bank account details, and other relevant details.
Self-Declaration: The business owner needs to provide self-declaration regarding the investment and turnover of the enterprise, based on the eligibility criteria mentioned earlier.
Verification and Registration: Once the information is submitted, the system will generate an Udyam Registration Number. No further documentation or verification is required at the time of registration. The registration certificate can be downloaded from the portal.
