Documents Required for MSME Registration

1st Jun 2019 05:54 pm MSME Leave a comment

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:

Manufacturing units:

Micro – less than Rs. 25 lacs

Small – less than Rs. 50 lacs

Medium – less than Rs. 100 lacs

Service units:

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.

Quality control

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.

Product/project incubation

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.