Overview

The MSME Certification in India stands for Micro, Small, and Medium Enterprises Certification, which is a registration process to certify and recognize businesses that fall under the MSME sector. The MSME sector in India comprises micro, small, and medium enterprises that play a crucial role in the country's economic growth and development. The MSME Certification was introduced by the Government of India under the Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006, which was enacted with the objective of promoting and facilitating the development of MSMEs in the country. The MSME Certification provides several benefits to businesses that fall under the MSME sector, such as access to various schemes and subsidies provided by the government, easier access to credit facilities from banks, and protection against delay in payment from buyers. Some of the salient features of the MSME Certification in India are:

• Classification: The MSMEs are classified based on their investment in plant and machinery or equipment for manufacturing units and on turnover for service providers.
• Eligibility: Businesses that fall under the MSME sector and meet the eligibility criteria can apply for the MSME Certification.
• Online registration: The MSME Certification can be obtained through online registration, which is a simple and hassle-free process.
• Unique identification number: Once the MSME Certification is granted, the business is issued a unique identification number known as Udyog Aadhaar, which is used for availing various benefits provided by the government.
• Validity: The MSME Certification is valid for the lifetime of the business unless there is any change in the profile of the enterprise.

MSME Eligibility Criteria

The latest classification of MSME in India was announced on June 1, 2020, by the Ministry of Micro, Small, and Medium Enterprises. As per the revised classification, the MSMEs are classified based on their annual turnover and investment in plant and machinery or equipment. The new classification is as follows:

• Micro Enterprises: Micro enterprises are defined as businesses with an annual turnover of up to Rs. 5 crores and an investment in plant and machinery or equipment of up to Rs. 1 crore.
• Small Enterprises: Small enterprises are defined as businesses with an annual turnover of up to Rs. 50 crore and investment in plant and machinery or equipment of up to Rs. 10 crores.
• Medium Enterprises: Medium enterprises are defined as businesses with an annual turnover of up to Rs. 250 crores and investment in plant and machinery or equipment of up to Rs. 50 crore.

What are the various benefits of an MSME Registration in India?

MSME registration in India offers several benefits to businesses operating in the micro, small, and medium enterprise sectors. Some of the major benefits of MSME registration in India are:

• Easy access to credit: MSME registration is a key factor in getting easy access to credit facilities from banks, financial institutions, and other lenders. Most lenders offer loans at lower interest rates and with less collateral security to MSMEs that have valid registration.
• Tax benefits: MSMEs that have registered under the MSME Act are eligible for various tax benefits such as exemption from certain direct taxes, lower rates of interest, and excise duty exemptions.
• Preference in Government Tenders: The Government of India has set a target of procuring at least 25% of its total purchases from MSMEs. MSMEs that have registered under the MSME Act are given preference in government tenders and contracts.
• Protection against delayed payments: MSMEs that have registered under the MSME Act are entitled to prompt payment for their supplies of goods or services. In case of delay in payment beyond 45 days, the buyer is liable to pay interest at a rate which is three times the prevailing bank rate.
• Technology Upgradation: MSMEs that have registered under the MSME Act can avail of various schemes and subsidies offered by the government for technology upgradation, marketing assistance, and infrastructure development.
• Branding and Intellectual Property Protection: MSMEs that have registered under the MSME Act can avail of financial assistance for branding and quality certification. Additionally, the government provides support for the registration of trademarks and patents to protect the intellectual property rights of MSMEs.
• Subsidies and Grants: MSMEs that have registered under the MSME Act can avail of various subsidies and grants offered by the government for power, water, and other utilities.

Documentation required for MSME Registration

The documentation required for MSME registration in India may vary depending on the type of business and the state in which it is located. However, some of the commonly required documents for MSME registration in India are:

• Aadhaar card of the proprietor or the authorized signatory
• PAN card of the business
• Business address proof (ownership or rent agreement)
• Proof of ownership of the premises (if owned)
• Details of the bank account of the business
• Information related to the business activities
• A copy of the Industrial License obtained from the government (if applicable)
• A copy of the sale bill and purchase bill of the business

Process of MSME Registration

The process of MSME registration in India is now simplified and can be done online through the Udyam Registration portal. The steps involved are:

• Visit the Udyam Registration Portal
• Enter Aadhaar number and validate through OTP
• Enter business details such as name, type, PAN number, address, bank details, and business activities
• Validate the information provided
• Submit the application and receive a unique Udyam Registration Number
• Provide additional information such as employees, investment, and turnover
• Complete the registration process and receive a certificate of registration containing the Udyam Registration Number and other details.

Which entities are eligible for MSME Registration?

As per the revised definition of MSMEs introduced by the Government of India in 2020, the following entities are eligible for MSME registration:

• Sole Proprietorships
• Partnership Firms
• Limited Liability Partnerships (LLPs)
• Private Limited Companies
• Public Limited Companies
• One-Person Companies (OPCs)
• Hindu Undivided Family (HUFs)

Why approach LAWYASA?

• Expert guidance: Lawyasa provides expert guidance and assistance throughout the registration process, ensuring that all legal requirements are met.
• Online platform: Lawyasa is an online platform, which means that you can access their services from anywhere, anytime.

How can LAWYASA assist?

Lawyasa is an online platform that provides a wide range of legal services, including MSME registration. Here's how Lawyasa can help in the MSME registration process in India:

• Expert Consultation: Lawyasa can provide expert consultation and guidance on the process of MSME registration, including the eligibility criteria, documents required, and other important aspects of the registration process.
• Document Preparation: Lawyasa can help prepare the necessary documents required for MSME registration, such as the PAN card, Aadhaar card, bank statement, and other relevant documents.

Frequently Asked Questions