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What is MSME Registration

What is MSME Registration?

All About MSME Registration

More than 74 lakh people have opted for MSME or Udyog Aadhaar registration from Sept 2015 till Sept 2019. Don’t you think this is something you shall know WHY so many people opted for it and how & why shall you opt for this UDYOG Aadhaar..?

So let’s get into ALL ABOUT this Udyog Aadhaar aka MSME.

MSME stands for Micro, Small and Medium Enterprises and is regulated by Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. 

That’s why it is called as MSME Registration!

Government of India enacted the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. It became operational on October 02, 2006. It was established to promote, facilitate and develop the competitiveness of the micro, small and medium enterprises. For deciding the applicability of the MSMED Act, the government has prescribed specific turnovers and investment limits to reckon whether an enterprise falls under the micro, small or medium category.

In terms of this Act definition of micro, small and medium enterprises is as under:

  • A micro enterprise is an enterprise where,

  • Manufacturing & Production Industry - the investment in plant and machinery does not exceed Rs. 25 lakh;

  • Service Industry - the investment in plant and machinery does not exceed Rs. 10 lakh

  • A small enterprise is an enterprise where, 

  • Manufacturing & Production Industry - the investment in plant and machinery is more than Rs. 25 lakh but does not exceed Rs. 5 crore;

  • Service Industry - the investment in plant and machinery is more than Rs. 10 lakh but does not exceed Rs. 2 crore.

  • A medium enterprise is an enterprise where, 

  • Manufacturing & Production Industry - the investment in plant and machinery is more than Rs.5 crore but does not exceed Rs.10 crore.

  • Service Industry - the investment in plant and machinery is more than 5 crore but does not exceed Rs. 10 crore


# All the micro, small and medium level business entities, as per above mentioned parametre, can apply for MSME registration. 

# Besides them, limited liability partnerships (LLP), private limited company (Pvt. Ltd.), one person companies (OPC), proprietorship firms and public companies can also apply for MSME registration.

# Even if the Company is in the manufacturing line or the service line, MSME registrations for both these areas can be obtained.

# Any entrepreneur having valid Aadhaar Number can apply for MSME Registration Online. At present Aadhaar Number is mandatory for issuance of MSME Certificate.


MSME registration is not mandatory but it is beneficial to get one’s business registered under this because it provides a lot of benefits in terms of taxation, credit facilities, loans, etc. Also, Rate of Interests on loans is lower for the registered ones as compared to other enterprises. 


Once you get MSME registration, you will receive a Certificate of the MSME registration wherein a 12 digit unique number is mentioned. Once you get this 12 digit Udyog Aadhar Number for your Micro, Small or Medium Scale Industry, you have MSME registration in your hands.


The MSMED Act was established to promote, facilitate and develop the competitiveness of the micro, small and medium enterprises. All new industrial units having MSME Registration and expansions are exempted from payment of Stamp Duty and Registration fees and Direct Tax Exemption in the initial year of business.

Besides these, there are various benefits that you would hardly get without MSME registration. Let’s know more benefits of MSME registration :


1. Various TAX rebates are offered to MSME.

2. There are many government tenders which are open only to the MSME 


3. Once registered as MSME many rebates and concessions are available and

thus the cost of getting on patent or trademark registration (for selected 

category), etc. or the cost of setting up the industry majorly reduces. (upto 50\\\% 


4. MSME gets easy access to credit. Public sector banks are permitted to

categorize their MSME general banking branches as specialized MSME branches.

This is to provide for a better service to this sector as a whole.

5. As per RBI Master Circular on lending to the MSME sector dated July 1, 2010, a

composite loan limit of Rs.1crore can be availed.

6. The bank loans become cheaper for Business registered under MSME. The 

interest rate goes much lower than interest on regular loans (around 1\\\% to 1.5\\\%)

7. Businesses registered under MSME are given higher preference for

government license and certification.

8. Business registered under MSME are also allowed credit for minimum 

alternate tax (MAT) to be carried forward for up to 15 years instead of 10 Years.

9. There is a One Time Settlement Fee for non-paid amounts of MSME.

10. MCA has recently introduced MSME forms to ensure that payment due to 

MSME registered entities is recorded properly and paid off within time.

Various SCHEMES for registered MSMEs :

  • Incubation: 

MSME Registration will help business entities with innovative ideas as the government of India can finance from 75\\\% to 80\\\% of the project costs of MSMEs registered under this scheme. 

  • Credit Facility: 

Having MSME registration benefits MSMEs by providing easily available loans, credit, and government subsidies. To get registered as MSME it is mandatory to have Adhaar Card.

  • Credit Linked Capital Subsidy Scheme: 

The MSMEs are given a capital subsidy so as to upgrade their business. To avail these subsidies, MSMEs registered under this scheme can approach banks directly. This will be very helpful for business entities registered as MSMEs to replace their old and obsolete technology.

  • Export Standard: 

If your business entity is into manufacturing and export some goods, it shall match the prescribed standards. This will enable their acceptance in foreign nations and keep them from being returned to India. MSME registration also help you avail some rebates and concessions for their exported goods.

  • Quality Management and New Technology: 

For registered MSMEs activities (seminars, campaigns, etc.) are conducted to enlighten businesses about new technology which is available in the market.

It will help the registered MSMEs to understand and maintain the required quality standards with new technology.

  • Women Entrepreneurship: 

Good news for the Ladies in Business!! 

The MSME scheme aims at facilitating women to manage and expand their businesses. Thus, if you register your business entity as MSME you get benefits like training, counselling, and teaching of delivery techniques by the government. Especially to the women-run MSMEs. 

  • Grievance Monitoring System: 

The business owners of the registered MSMEs can raise the complaints which are addressed as quickly as possible. The status of complaints can be checked by the owners and keep the complaints open in case the outcome is dissatisfactory.

Hopefully, now you have enough reasons to opt for at least MSME registration instead of running your business without any legal identity. It is the only license that can not only gives identity to your business entity but give much more benefits than any other license could give your entity.

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