MSME Registration


What is MSME?

Criteria Micro Small Medium

a micro enterprise, where the investment in Plant and Machinery or Equipment does not exceed one crore rupees and turnover does not exceed five crore rupees;

a small enterprise, where the investment in Plant and Machinery or Equipment does not exceed ten crore rupees and turnover does not exceed fifty crore rupees;

a medium enterprise, where the investment in Plant and Machinery or Equipment does not exceed fifty crore rupees and turnover does not exceed two hundred and fifty crore rupees.

MSME is the abbreviation for Micro, Small and Medium Enterprises. It is a scheme of government that mainly targets providing benefits to medium and small-scale entrepreneurs in order to boost their businesses in today’s very competitive world. MSME scheme provides loans to new entrepreneurs, thereby assisting them in setting up their new businesses by removing their financial crunch.

How to register with the MSME Act?

MSME registration is a simple process. You have to visit the scheme’s official website. When there, follow the instructions you see on the screen. Choose your category and do as per the instructions. Any venture that falls in the MSME category is eligible to register here. And the only document required here is your Aadhar card. You also need to upload your PAN and GST details on your investment and turnover. The portal will gather all other details from the database of the Government.

Check the Government portal, check the updates and furnish the documents accordingly. Registration of MSME is done through the portal of the Government of India According to the details given in this portal, there are two categories under which MSMEs can register themselves. Both these categories are given below –

  • 1. Entrepreneurs who have not registered themselves as MSME before and thus are registering themselves for the first time.
  • 2. Those Entrepreneurs who have already registered as UAM or EM-II and those having registered as UAM or EM-II through assisted filing.

For New Entrepreneurs who are not Registered yet as MSME

Entrepreneurs who are registering for the first time need to choose the button “For New Entrepreneurs who are not Registered yet as MSME” showing on the homepage of MSME portal and click it. The registration process requires entering Aadhar Card number in two ways listed below –

  • • Registration along with PAN Card details
  • • Registration without any PAN Card

Registration Along With PAN Card:

When we open the home page of the portal, the option “For New Entrepreneurs who are not Registered yet as MSME ” is to be chosen which in turn opens the next page for MSME registration. Here the applicant’s Aadhar Card number is asked. After giving an Aadhar Card number the Entrepreneur’s name is asked for.

Next step after giving these details is clicking on the button “Validate and Generate OTP ”. After generating and entering OTP, the next page opens that asks for PAN Verification.

If the applicant owns a PAN Card, the PAN Card details are automatically taken from the databases of the government and filled in thereby. The next step required is filing ITR details of the applicant entrepreneur.

Once all these details are filled, a message box appears which says “Udyam Registration has already been done through this PAN”. Now the entrepreneur has to click the “Validate PAN”.

After PAN is verified, the portal will show Udyam Registration box that asks the entrepreneur to fill in his personal details alongwith details of the industry or the plant he is going to set up. Once this details-filling process is over, the entrepreneur has to click “Submit and Get Final OTP”.

After getting and filling out this final OTP, the registration process is considered complete as the entrepreneur is now registered as MSME. What follows now is a successful registration message along with a reference number. Once the verification of registration is done (in a few days), the Udyam Registration Certificate is issued.

Document Required for the MSME Registration:

  • • Personal Aadhar number
  • • Industry name
  • • Address
  • • bank account details and some common information.
  • • The owner of the enterprise can provide self-certified certificates for the same.
  • • The owner will get a registration number upon filling and successful upload of the form.
  • • There are no registration fees required for this process.

Do also glance through the documents required for registration as below:

1. Address Proof of the Enterprise: In case the premise is owned by the owner of the enterprise, all you need is the allotment letter, possession letter, and property tax receipt or lease deed. Rent receipt and No Objection Certificate from the landlord would suffice in case your enterprise is operating out of a leased space.

2. Sale Bill or Purchase Bill: The enterprise needs to submit copies of the bill of the products/services it sold and a copy of purchase bills for the raw material it purchased.

3. Partnership Deed, MoA and AoA: If the business is a partnership firm, it must submit its partnership deed and registration certificate in case it is a registered entity. In case the enterprise is a company, a copy of Memorandum of Association and Articles of Association, and certificate of incorporation must be submitted. A copy of the resolution passed at the latest general meeting and a copy of the board resolution authorizing a director to sign the MSME application must also be submitted.

4. Licenses and Bills of Machinery: In few cases, the owner of the enterprise might have to submit a copy of industrial license received from the government. The owner may also have to submit copies of bills and licenses related to purchase and installation of machinery, equipment etc if required.

Types of MSME loan Options:

We will cover MSME Lending for private enterprises for you to get a gist of the loan options. The loan options available are:

1. Working capital loans: As the name suggests, this is required by enterprises that need instant capital to keep the business moving forward and to sustain their operations. They also need funds to bridge the gap between the delivery of finished products and pay for the same. As an MSME, they can avail such loans at better terms and have a repayment tenure of 1-2 years. The lending is collateral-free. The MSME enterprise should be in business for over a year and its annual turnover should be greater than INR 24 Lakhs. The documentation required for loan eligibility includes KYC documents, a business registration certificate and the Current Account statement for the last 6 months.

2. Merchant Cash Advance: This is a form of lending wherein disbursal is quick. The MSME receives a lump sum amount required and the repayment is done daily as per the sales done at the organization’s point of sale terminals. An MSME whose product or service is consumed by customers and instantly paid for through a point of sale terminal is aptly suited for such kinds of loans. Do you think this is a great method? Visit Lendingkart and help us arrange capital at very good rates for you.

3. Line of Credit: Line of credit enables enterprises to have credit options at their disposal for meeting their daily expenses. While the enterprise has access to a pool of funds here, the interest is charged only when they avail a loan. The enterprise can enjoy a revolving line of credit and get a reduced interest rate for their loan. Are you looking for such loans? Know more by clicking here. While the loan is not backed by collateral, users can avail loans in the range of INR 50,000 to INR 1 Crore. The repayment tenure is 1 year.

4. Invoice Financing:Invoice financing, as the name suggests, enables MSMEs to raise capital against invoices that are yet to be cleared. It helps them to maintain their cash flow better and manage day-to-day operations. In this model of financing, the lending organization takes a percentage of the invoice upon clearance wherein it covers the processing fee, the principal and the accrued interest. Any enterprise which has been operational for more than a year and has a turnover of over INR 24 Lakhs can avail of this type of financing. It should however have raised the invoice to a reputed corporate entity and should have valid invoices of work of at least INR 1 Lakh.