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How to Register with MSME, Udyam Registration form link, Documents Required in India

Updated on : Feb. 13, 2023 - 6 p.m. 17 min read.

MSME Registration

What is MSME Registration?

MSME stands for Micro, Small, and Medium Enterprises and refers to a classification system for businesses in India. The MSME Registration is a process by which a business is registered with the Ministry of Micro, Small and Medium Enterprises (MSME) to avail benefits and incentives offered by the Government of India. This registration process helps the government in identifying and supporting the growth of MSMEs in India.

The MSME registration is mandatory for businesses that want to avail benefits like subsidies, easy loan facilities, tax exemptions, and other government schemes aimed at promoting the growth of MSMEs. The MSME registration can be done online through the MSME Ministry's website and is relatively quick and simple.

What is MSME classification?

The Indian government introduced MSME registration in 2006 and the original classification was determined by the investment in plant and machinery or equipment. However, the criteria have been revised to include both investment and annual turnover. The distinction between the manufacturing and service sectors under the MSME definition has also been eliminated. The current MSME classification is based on the consideration of both the investment and annual turnover of the entity.

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Eligibility Criteria

The following are the eligibility criteria for MSME registration in India:

  1. Investment in Plant and Machinery or Equipment: The investment in plant and machinery or equipment is the primary criterion to determine the MSME classification. A Micro Enterprise should have an investment in plant and machinery or equipment not exceeding INR 25 Lakhs, a Small Enterprise should have an investment of not more than INR 5 Crore and a Medium Enterprise should have an investment of not more than INR 10 Crore.
  2. Type of Ownership: The MSME registration is open to all forms of ownership such as sole proprietorship, partnership firm, limited liability partnership (LLP), private limited company, and public limited company.
  3. Type of Activity: The MSME registration is open to all types of activities, including manufacturing and service sector enterprises, except for a few restricted activities.
  4. Location of Enterprise: The MSME registration is open to all businesses located in India, regardless of their location, whether in rural or urban areas.
  5. Annual Turnover: The annual turnover of the enterprise should not exceed INR 5 Crore for Micro Enterprises, INR 5 Crore to INR 75 Crore for Small Enterprises, and INR 75 Crore to INR 250 Crore for Medium Enterprises.

Who can Apply for Udyam Registration?

In India, Udyam Registration, also known as Udyog Aadhaar Memorandum, is open to all Indian entities including individuals

  • Sole proprietorships
  • Partnership firms
  • Hindu Undivided Family (HUF)
  • Private limited companies
  • Limited liability partnerships (LLP)
  • Public limited companies
  • Cooperative societies
  • Trusts

The Udyam Registration is mandatory for businesses in India if they fall under the Micro, Small, and Medium Enterprises (MSME) classification.

The eligibility criteria for Udyam Registration include the following:

  1. Businesses should be located in India and should be in operation for profit.
  2. The business should be engaged in any manufacturing, trading, or service activities as defined by the Ministry of Micro, Small, and Medium Enterprises (MSME).
  3. The business should not be a subsidiary of any other company.
  4. The proprietor of the business should be a citizen of India.
  5. The business should be self-owned and not owned by any other company.

It is important to note that Udyam Registration is a one-time process and is valid for the lifetime of the business. The registration certificate issued by the MSME Ministry serves as an official recognition of the MSME status of the business and also helps the business avail of various government schemes and benefits.

Documents Required For MSME Registration

To register for MSME in India, the following documents are required:

  1. PAN Card of the proprietor/partners/directors of the company
  2. Aadhar Card of the proprietor/partners/directors of the company
  3. Address proof of the business like a utility bill, rent agreement, etc.
  4. Bank statement or canceled cheque of the company’s current account
  5. Proof of investment in plant and machinery/equipment
  6. GST Registration certificate, if applicable
  7. Memorandum and Articles of Association, in case of a private limited company or limited liability partnership
  8. Partnership Deed, in case of a partnership firm
  9. Proof of business commencement, such as a certificate of incorporation, in case of a private limited company
  10. Director Identification Number (DIN) for directors, in case of a private limited company

The procedure of MSME Registration on the Udyam Registration Portal

For New Entrepreneurs who are not Registered yet as MSME

To get MSME Registration in India, the following is the step-by-step process:

Step 1:

Visit the official Udyam Registration Portal: Visit the official Udyam Registration Portal (https://udyamregistration.gov.in/) to start the process.

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Step 2: Next, enter your Aadhaar number and name as the entrepreneur on the following page. Click on the "Validate and Generate OTP" button. After you receive and enter the OTP, the PAN Verification page will be accessible.

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Step 3: The next step involves selecting the type of organization and entering the PAN number. After clicking on the "Validate PAN" button, the portal will validate the PAN number by fetching the details from government databases.

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Step 4: Upon successful verification of PAN, the entrepreneur will be directed to the Udyam Registration form where they need to enter their personal information and details regarding their business entity.

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Step 5: The entrepreneur will then be prompted to enter details regarding their investment and turnover, and make a declaration by clicking on the “Submit and Get Final OTP” button. After receiving the OTP, it must be entered and submitted, resulting in the issuance of the Udyam Registration Certificate which will be sent to the registered email. The status of the MSME registration can also be tracked via the Udyam Registration Portal.

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Form for those who already have registration as UAM

For entrepreneurs who already have Udyam Registration, the process is simplified. The following are the steps to be followed:

Step 1: Visit the Udyam Registration Portal.

Step 2: Enter the Udyam Registration Number and click on the “Get OTP” button. The OTP will be sent to the registered mobile number.

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Step 3: Enter the OTP and click on the “Validate and Login” button.

Benefits of MSME Registration

MSME (Micro, Small, and Medium Enterprises) registration in India provides numerous benefits to businesses, some of which are:

  1. Easy access to credit: MSME-registered businesses are eligible for various government schemes and initiatives, including the credit linkages scheme, which provides easier access to credit at lower interest rates.
  2. Tax benefits: MSME-registered businesses are eligible for certain tax benefits and exemptions, such as lower indirect taxes and income tax exemptions.
  3. Government procurement: MSME-registered businesses can participate in government procurement processes and can supply goods and services to government departments and public sector units.
  4. Marketing assistance: MSME-registered businesses can participate in government trade fairs and exhibitions, which can provide them with an opportunity to showcase their products and services to a larger audience.
  5. Subsidy for technology upgradation: MSME registered businesses can avail of subsidies for technology upgradation, which can help them to improve their competitiveness and efficiency.
  6. Power tariff concession: MSME-registered businesses are eligible for a concession on power tariffs, which can reduce their operational costs.
  7. Protection of intellectual property rights: MSME-registered businesses can avail of the benefits of intellectual property rights protection, including trademark and patent registration.
  8. Relaxed norms for public procurement: MSME registered businesses can enjoy relaxed norms for public procurement, which makes it easier for them to participate in government procurement processes.
  9. Skill development and training: MSME-registered businesses can avail themselves of skill development and training opportunities, which can help them to improve their workforce capabilities and efficiency.
  10. Other benefits: MSME-registered businesses can also avail of other benefits, such as ease of doing business, priority sector lending, and more.

By Amit Pawar   
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