Documents Required for MSME Registration
What are Micro, Small and Medium Enterprises (MSME)?
In India, MSMEs are the backbone of the economy. As per estimates of the MSME Ministry of the Government of India, 95 per cent of industrial units are MSMEs. In addition, MSMEs are responsible for 50 per cent of total exports and 45 per cent of industrial output and together they manufacture nearly 6000 different products. The upshot is that the MSME sector contributes to nearly 70 per cent of the GDP. The government actively promotes the growth of this sector to enable the economy, as a whole, to flourish. By identifying and registering a unit as an MSME, the government finds it easier to ensure that they receive the full benefits of various schemes.
How are MSME identified?
MSMEs are of two categories – manufacturing and service units. Whether they are classified as micro, small or medium depends on the level of investment in equipment and/or plant and machinery. The detailed breakup is mentioned below:
Micro – less than Rs. 25 lacs
Small – less than Rs. 50 lacs
Medium – less than Rs. 100 lacs
Micro – less than Rs. 10 lacs
Small – less than Rs. 20 lacs
Medium – less than Rs. 50 lacs
Why should you register yourself as an MSME?
If you qualify in the above investment criteria, you should register as an MSME as soon as possible to avail the following benefits:
Bank loans are offered to MSMEs at significantly lower interest rates than the prevailing market rates
Several government tenders are offered only to MSMEs so your business opportunities will expand
MSMEs are allowed to carry forward MAT credit for 15 years instead of the usual 10 years for non-MSMEs
Applications for certification or license are fast-tracked for MSMEs on a priority basis
MSMEs are allowed to pay a onetime Settlement fee for unpaid amounts due to the government
What are the government schemes for MSMEs?
Udyog Aadhaar Memorandum
Government subsidies and loans are easily accessible by linking the owner/proprietor’s Aadhaar number to the MSME registration.
Registered MSMEs are able to implement world-class quality standards, knowhow and technology through government learning opportunities. For this purpose, several seminars, trade fairs and campaigns are held from time to time.
Up to 80 per cent of the design cost of MSME start-ups can be financed by the state.
Credit linked capital subsidy
MSMEs can avail subsidies from banks when they are in the process of replacing obsolete technology and upgrading to more effective means.
What is the registration process?
The entire process can be completed online by filling a single form, although there is an offline process as well. Every business requires a separate registration. There are no registration fees. Once all the details are filled and uploaded, a unique MSME registration number is issued.
What are the documents required?
Business address proof
Possession letter/property tax receipt/lease deed/allotment letter/municipal license/utility bills/rent receipts and a No Objection Certificate from the landlord.
Copies of purchase and sales bills
A copy of a purchase bill has to be produced for each raw material procured in the production process. In addition, a sale bill must be submitted for every product/service supplied.
Documents of legal incorporation
In case of partnership firms, the partnership deed and registration certificate must be submitted. If it is a company, copies of the Memorandum and Articles of Association must be submitted. Along with this, a copy of the board resolution authorizing registration of the company as an MSME is also needed.
Other essential documents
Since MSME registration is largely determined by the amount invested in plant and machinery, all bills documenting the purchase and installation of machinery and plant equipment must be produced. In some cases, the industrial license is also needed.
All these documents must be self-attested.
When is registration complete?
All MSME certificates need to be downloaded from the online portal and no separate hard copy is mailed by the government.
Can a registration be cancelled?
Registration cannot be cancelled once the process is initiated.