MSME Registration

What is MSME?

MSME stands for Micro, Small, and Medium Enterprises. According to the MSME or Micro, Small, and Medium Enterprises Development Act of 2006, enterprises are classified into two types which are as follows:

Manufacturing Enterprises are the enterprises that are engaged in the production or manufacturing of goods in the industry.

Service Enterprises are the enterprises that are engaged in rendering or providing services.

MSME Classification:

The distinction between the manufacturing and services enterprises has been removed by making the investment amount and annual turnover similar for enterprises engaged in both the sectors.

MSME – Merged Criteria: Investment and Annual Turnover
Sector/Enterprise TypeMicro EnterpriseSmall EnterpriseMedium Enterprise
Manufacturing & Services Sector, BothInvestment less than Rs. 1 crore Turnover less than Rs. 5 croreInvestment less than Rs. 10 crore Turnover up to Rs. 50 croreInvestment less than Rs. 50 crore Turnover up to Rs. 250 crore
Key Takeaways of New MSME Definition introduced in Aatma Nirbhar Bharat Abhiyan‘ or Self-reliant India Scheme 2020 by Government of India.
  • Collateral Free Loans to MSMEs
  • MSME Loans worth of Rs. 3 lakh crore
  • Moratorium period offered is 12 months
  • Manufacturing and Service MSMEs shall be considered as same entities
  • Repayment Tenure of 48 months
  • 100% Credit Guarantee

To benefit approx. 45 lakh units

Understanding Key Benefits of MSME Registration:

1. Loans without collaterals:

The Government has introduced various initiatives for MSME/SSI that allow them to avail credit without collateral. One of the best MSME registration benefits, the initiative to provide collateral-free loan is undertaken by GOI (Government of India), SIDBI (Small Industries Development Bank of India) and the Ministry of Micro, Small and Medium Enterprise under the name The Credit Guarantee Trust Fund Scheme. This is by far the best MSME registration benefits for small business owners.

2. Subsidy on Patent Registration & Industrial Promotion:

Business enterprises registered under the MSME Act are given a hefty subsidy of 50 per cent for patent registration. This can be availed by sending an application to the respective ministry. In addition to this, one of the great MSME registration benefits is to get subsidy for industrial promotion suggested by the Government.

3. Overdraft facility along with Interest Rate Exemption:

Businesses or enterprises registered as MSME/SSI under the MSME Act are eligible to avail a benefit of 1% on the overdraft as part of the Credit Guarantee Trust Fund Scheme. Although this can vary from bank to bank.

4. Concession on Electricity:

One of the simplest MSME registration benefits, businesses registered under the MSME Act can avail a concession on electricity bills. All they have to do is submit the bills along with an application and a copy of the registered certificate by MSME.

5. Protection against Delayed Payments:

Understanding the ambiguity lying with business revenues, the Government has extended a helping hand by providing a layer of protection against payments. As of now, the Ministry of Micro, Small and Medium Enterprise has given business owners and enterprises to collect interest on payments delayed by the buyer.

Under the MSME registration benefits, a buyer is expected to make a payment for the goods/services within 15 days of the purchase. If the buyer delays, the payment for more than 45 days, the enterprise is eligible to charge compound interest which is 3 times the rate notified by RBI.

6. ISO Certification Charges Reimbursement:

A registered small or medium enterprise can claim the expenses for reimbursement that were spent on ISO certification.

Registration Process:

Government has organised a full system of Facilitation for Registration Process:

  • An enterprise for the purpose of this process will be known as Udyam and its Registration Process will be known as ‘Udyam Registration’
  • A permanent registration number will be given after registration.
  • After completion of the process of registration, a certificate will be issued online.
  • This certificate will have a dynamic QR Code from which the web page on our Portal and details about the enterprise can be accessed.
  • There will be no need for renewal of Registration.
  • Our single window systems at Champions Control Rooms and at DICs will help you in the process.

Registration Process is totally free. No Costs or Fees are to be paid to anyone.

Documents Required for MSME Registration

Following are the list of documents and information that one is required to provide as per the application form for MSME Registration in India:

  • The applicants Aadhar Card;
  • The name of the Owner- in accordance with the Aadhar Card;
  • The social category of the applicant- whether the applicant belongs to the General, SC, ST, or OBC category;
  • Gender of the applicant;
  • The Physical status of the applicant- whether the applicant is physically disabled or not;
  • The name of the enterprise;
  • The type of enterprise- select from list given in the form;
  • The PAN Number
  • The Official Address of the enterprise’s plant
  • The Location of the enterprise’s plant
  • The Date of incorporation of the enterprise
  • Previous registration details of the enterprise, if any;
  • Bank details associated with the enterprise;
  • The activity of the enterprise- choose between “Manufacturing” or “Service.”
  • The NIC Code;
  • The information related to Employment- total number of employees working in the organization of the applicant;
  • The details of Investment in machinery and plant.
Must Follow

MSME Registration is free, paperless and based on self- declaration:

  • MSME registration process is fully online, paperless and based on self-declaration.
  • No documents or proof are required to be uploaded for registering an MSME.
  • Only Adhaar Number will be enough for registration.
  • PAN & GST linked details on investment and turnover of enterprises will be taken automatically from Government data bases.
  • Our online system will be fully integrated with Income Tax and GSTIN systems.
  • Having PAN & GST number is mandatory from 01.04.2021.
  • Those who have EM-II or UAM registration or any other registration issued by any authority under the Ministry of MSME, will have to re-register themselves.

No enterprise shall file more than one Udyam Registration. However, any number of activities including manufacturing or service or both may be specified or added in one Registration.

MSMEs or Micro, Small, and Medium Enterprises contribute primarily to the socio-economic development of the country. MSMEs are governed by the Ministry of Micro, Small & Medium Enterprises in India and are also required to be registered under the MSMED or Micro, Small and Medium Enterprises Development Act to avail benefits. Registration of MSME is very important, as it allows these enterprises to avail benefits from the various schemes initiated by the Government mentioned above. 


As such, with the introduction of the changes in the union budget, it mainly focuses on the improvement of the MSMEs, due to the potential they hold for economic growth.