How to register as an MSME

How to register as an MSME

Starting and establishing a business is not easy and requires many factors, to make it a success. Right from the best-trained personnel, to easy and economical sourcing of raw materials, access to affordable finance and the latest technology, every factor plays an important role in the development of the business.

Large scale companies and industries have the advantage of huge cash flows and infrastructure, which makes it easy for them to price their products and services competitively and at a price that ensures maximum sales for them. In such a situation, small and medium-sized companies face a big disadvantage and are unable to compete or grow their business. To be competitive, it is important that all these companies and organisations get an equal chance to establish and run their businesses.

Recognising this need, the government of India established the MSMED (Micro, Small and Medium Enterprises) Act. to promote and facilitate the growth of all small companies and industries. The government offers many schemes, subsidies, and incentives to companies registered under this act so that they can create and offer world-class products and services to their customers. To ensure proper allocation of its benefits and support, it also classified all the small industries under three broad categories i.e.

 

Micro Enterprises

These are manufacturing companies with an investment of less than 25 lakhs in their plant and machinery or service oriented companies with an investment of less than 10 lakhs in their plant and machinery.

 

Small Enterprises

These are manufacturing companies with an investment of more than 25 lakhs, but less than 5 crores in their plant and machinery or service oriented companies with an investment of more than 10 lakhs but less than 2 crores in their plant and machinery.

 

Medium Enterprises

These are manufacturing companies with an investment of more than 5 crores, but less than 10 crores in their plant and machinery or service oriented companies with an investment of more than 2 crores but less than 5 crores in their plant and machinery.

 

MSME Registration Process

It is important for all companies to be registered to get the benefits under the MSMED act to avail of the benefits, subsidies, and incentives provided by the government. The government under Prime Minister Modi has also made the MSME registration process simple without the need for unnecessary forms and documents.

To help industries and companies register as an MSME, the government has created a website under the brand name Udyog Aadhaar. The Udyog Aadhaar website link is: https://udyogaadhaar.gov.in/UA/UAM_Registration.aspx

Before starting the MSME registration process, ensure that you have an Aadhar Card since it is compulsory to have the same.

 

The following details & documents are required for the registration process

  1. Aadhar number of the applicant
  2. Name, gender, PAN number, email id and mobile number of the applicant.
  3. PAN, location, and address of the organization.
  4. The number of employees you have and the date, you have started/are planning to start your business.
  5. Bank account number and IFSC code
  6. The basic business activity of the enterprise
  7. NIC 2 digit code
  8. Investment in plant and machinery/equipment
  9. MoA and AoA
  10. Copies of Sales Bill and Purchase Bill

 

Step by step registration process for MSME (As per MSME websites

 

    Step by step registration process for MSME (As per MSME website)

    1. Enter your Aadhaar Number
    12 digit Aadhaar number issued to the applicant should be filled in the appropriate field.

     

    2. Name of Owner
    The applicant should fill his/her name strictly as mentioned on the Aadhaar Card issued by UIDAI. E.g. if Raj Pal Singh has his name as Raj P. Singh, the same should accordingly be entered in the field. If the name does not match with the Aadhar Number, the applicant will not be able to fill the form further.
    You need to validate your Aadhar card before you can continue the registration
    To Validate your Aadhar Number

    1.Validate Aadhar- The applicant must click on Validate Aadhaar button for verification of Aadhaar after that only user can fill the form further.
    2.Reset- The applicant can click on reset button to clear the field of Aadhaar No and Name of the owner for different Aadhaar.

    An OTP will be sent to your mobile number registered with UIDAI. If your mobile number is not registered with UIDAI, please follow instructions given on Pop up window.

     

    3. Social Category
    The Applicant may select the Social Category (General, Scheduled Caste, Scheduled Tribe or Other Backward Castes (OBC). The proof of belonging to SC, ST or OBC may be asked by the appropriate authority, if and when required.

     

    4. Gender
    The applicant should select the appropriate gender here

     

    5. Physically Handicapped
    The Applicant can select the option of Physically Handicapped if applicable.

     

    6. Name of Enterprise
    The Applicant must fill the name by which his/her Enterprise is known to the customers/public and is a legal entity to conduct business. One applicant can have more than one enterprises doing business and each one can be registered for a separate Udyog Aadhaar and with the same Aadhaar Number as Enterprise 1 and Enterprise 2 etc.

     

    7. Type of Organization
    The Applicant may select from the given list the appropriate type of the organisation for his/her enterprise. The Applicant must ensure that he/she is authorised by the legal entity (i.e. enterprise being registered for Udyog Aadhaar) to fill this online form. Only one Udyog Aadhaar number shall be issued for each enterprise.

     

    8.PAN Number
    The Applicant will have to enter PAN Number in case of Co-Operative, Private Limited, Public Limited, and Limited Liability Partnership It. This is optional for other types of organisations.

     

    9. Location of Plant
    The Applicant may add multiple plant location in one registration by clicking Add Plant button.

     

    10.Official Address
    The Applicant should fill in the appropriate field the complete postal address of the Enterprise including State, District, Pin code, Mobile No and Email.

     

    11. Date of Commencement
    The date in the past on which the business entity commenced its operations may be filled in the appropriate field.

     

    12.Previous Registration Details (if any)
    If the Applicant’s enterprise, for which the Udyog Aadhaar is being applied, is already issued a valid EM-I/II by the concerned GM (DIC) as per the MSMED Act 2006 or the SSI registration prevailing prior to the said Act, such number may be mentioned in the appropriate place.

     

    13. Bank Details
    The Applicant must provide his/her bank account number used for running the Enterprise in the appropriate place. The Applicant must also provide the IFSC Code of the bank’s branch where his/her mentioned account exists. The IFSC code is nowadays printed on the Cheque Books issued by the bank. Alternatively, if the Applicant knows the name of the Bank and the branch where his/her account is there, the IFSC code can be found from the website of the respective Bank.

     

    14. Major Activity
    The major activity i.e. either “Manufacturing” or “Service” may be chosen by the enterprise for Udyog Aadhaar. If your enterprise is involved in both the type of activities and if major work involves in Manufacturing and small portion of activity involves in Service sector then select your major activity type as “Manufacturing” and if major work involves in Services and small portion of activity involves in Manufacturing then select your major activity type as “Services”.

     

    15. National Industry Classification Code (NIC Code)
    The Applicant may choose multiple National Industrial Classification-2008 (NIC) Codes to include all their activities. Which means a user can select multiple NIC code of Manufacturing and Service sector by clicking the “Add More” button. If you want to add Manufacturing then select “Manufacturing” radio button and keep on adding by clicking “Add More” button otherwise if you want to add Service then select “Services” radio button and keep on adding by clicking “Add More” button. The NIC codes are prepared by the Central Statistical Organisation (CSO) under the Ministry of Statistics and Program Implementation, Government of India.

     

    The Applicant may use National Industrial Classification-2008 (NIC) Codes searching facility to avoid 3 steps selection process.

     

    Example: User has to write matching keyword (2 or more characters) in the Search text box in Column No 11. Then all related NIC CODEs will be listed (including Nic 2 Digit, Nic 4 Digit & Nic 5 Digit) with code and description. If User selects NIC 5 Digit code, then automatically all the related fields (like NIC 2 Digit, 4 Digit, 5 Digit & Enterprise Type) at column 11 will be automatically filled. Same way, If a user selects NIC 4 digit, then the related field of 2 digit NIC Code will be filled, but the user has to select NIC 5 digit from drop down(In this case 2 steps are required).

     

    16. Persons employed
    The total number of people who are directly employed by the enterprise may be mentioned in the appropriate field.

     

    17. Investment in Plant & Machinery / Equipment
    While computing the total investment, the original investment (purchase value of items) is to be taken into account excluding the cost of pollution control, research and development, industrial safety devices, and such other items as may be specified, by notification of RBI. If an enterprise started with a set of plant and machinery purchased in 2008 worth Rs. 70.00 lakh has procured additional plant and machinery in the year 2013 worth Rs. 65.00 lakh, then the total investment in Plant & Machinery may be treated as Rs. 135.00 lakh.

     

    18. DIC
    The Applicant, based on the location of the Enterprise, has to fill in the location of DIC. This Column will be active and show the option only when there is more than one DIC in the district. In fact, if there is only one DIC in the district system will automatically register you in the same DIC.

     

    19. Submit
    The Applicant must click on Submit button to generate OTP which will be sent to the email id mentioned for registration.

     

    20. OTP
    The Applicant has enter OTP received on mobile (linked with Aadhaar) a second time.

     

    21. Enter Captcha
    The Applicant must enter Captcha before clicking on the Final Submit button.