How to Register Your MSME Online FREE in India – Udyog Aadhaar Registration

What keeps the economic wheels running for a developing country like India? Of course, the micro, small and medium enterprise (MSME) sector of the nation. This sector prides itself as a primary contributor to employment, exports, manufacturing, and industrial units in India. 

But not all businesses fall under the MSME category because there’s a maximum revenue criterion set by the Government. A business has to hit the benchmark to qualify as an MSME.  

According to the MSMED Act, 2006, also known as Micro, Small and Medium Enterprises Development Act:
MSME are classified into two categories:

i. Manufacturing enterprise; and

ii. Service enterprise.

They are defined in term of investment in Plant and Machinery/ Equipment  as below

 

How to register an MSME online?

By registering with Udyog Aadhaar by MSME department businesses can benefit prevalent opportunities, and yes, you can also register offline. 

Follow the below steps to register online: 

·         Keep your Aadhaar card handy (Mandatory) 

·         File an online form using Udyog Aadhaar registration 

·         Use e-Aadhaar OTP for verification 

·         Provisional registration is issued, which is valid for five years

·         Temporary registration will make it easy to apply for loans from banks 

·         Post commencement you can apply for a permanent license

How to register an MSME without Aadhaar card?

First of all, the applicant who doesn’t have an Aadhaar card according to the section-3 act. Till the time the individual receives the Aadhaar, UAM registration shall be filed by the respective DIC or MSME-DE for the enterprise or business. 

Meanwhile, the individual can provide the below documents as an alternative for identification.

·         Aadhaar enrolment copy 

·         Aadhaar enrolment request copy 

Anyone of the following: Voter Id, passport, driving license, PAN card, employee ID, and bank passbook

What are the documents required for MSME registration?

·         Aadhar number 

·         PAN number

·         Address of the business

·         Bank account number

·         The basic business activity 

·         NIC 2 digit code 

·         Investment details (Plant/equipment details)

·         Partnership deed

·         Sales and purchase bill copies 

·         Copies of licenses and bills of purchased machinery

 

What are the benefits of MSME registration?

Registration of your MSME is not mandatory. If you choose to register, then your business can enjoy an excise exemption scheme from direct taxes avail special schemes from banks custom made for MSMEs and many more. 

Also, registered businesses with an MSME certificate will benefit from various government departments, including electricity.

Benefits of MSME Registration

To encourage the growth of MSME, both state and central governments have conceptualized it in such as a way as to provide maximum benefits to the enterprises falling under the MSME sector. Registration of an MSME is not legally mandatory but registering it will help you reap several benefits from the government including:

1.     Collateral Free loans from banks:

The Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGS) was launched by the Government of India to make available collateral-free credit to the micro and small enterprise sector. Both the existing and the new enterprises are eligible to be covered under the scheme. The Ministry of Micro, Small and Medium Enterprises, Government of India and Small Industries Development Bank of India (SIDBI), established a Trust named Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to implement the Credit Guarantee Fund Scheme for Micro and Small Enterprises. This scheme allows collateral-free loans of up to 50 lakhs for individual MSMEs.

2.     1% Exemption on the interest rate on overdraft:

Enterprises that have MSME Registration can avail the benefit of 1% exemption on the interest rate on Overdrafts as mentioned in the scheme.

3.     50% subsidy for Trademark registration:

Enterprises that have MSME Registration Certificate can avail 50% subsidy for trademark or patent registration by making an application to the respective authority.

4.     Eligible for Industrial Promotion subsidy:

Enterprises that have MSME Registration are eligible for Industrial Promotion Subsidy as may be prescribed by the government in this behalf.

5.     Concession in electricity bills:

Enterprises that have MSME Registration Certificate can avail Concession on electricity bill by making an application to the electricity department along with MSME Registration Certificate.

6.     Reimbursement of ISO Certification:

Enterprises that have MSME Registration Certificate can reimburse ISO Certificate Expenses by making an application to respective authority along with MSME.

7.     Protection against delayed payments:

The Ministry of Micro, Small and Medium Enterprises gives protection to MSME Registered Business against the delay in payments from Buyers and right of interest on delayed payment through conciliation and arbitration and settlement of dispute be done in minimum time. If any micro or small enterprise that has MSME registration, supplies any goods or services, then the buyer is required to make a payment on or before the date agreed upon between the buyer and the micro or small enterprise. In case there is no payment date on the agreement, then the buyer is required to make payment within fifteen days of acceptance of goods or services. Further, in any case, a payment due to micro or small enterprise cannot exceed forty-five days from the day of acceptance or the day of deemed acceptance. In case of failure by the buyer to make the payment on time, the buyer is required to pay compound interest with monthly interest rests to the supplier on that amount from the agreed date of payment or fifteen days of acceptance of goods or service.

8.     Special Consideration on International Trade Fairs:

Under the International Cooperation Scheme, financial assistance is provided to organizations associated with MSME for deputation of MSME business delegation to other countries for exploring new areas of MSMEs, participation by Indian MSMEs in international exhibitions, trade fairs, and buyer-seller meet and for holding an international conference and seminars that are in the interest of MSME sectors.

    9.     20 LacCrore Economic Package (Click link to know more):

 

What are schemes launched by the Government for MSMEs? 

Here are some of the schemes: 

·         Udyog Aadhaar memorandum scheme – Under this scheme, MSMEs can quickly get available loans for MSMEs, credit, and government subsidies 

·         Women entrepreneurship – This scheme was launched to boost and encourage women who wanted to create something or start their own business. Over here the The government provides financial help, counseling, and training to women to help them better manage their business

·         Zero defect zero effect – Here, the Government ensures goods that are produced by MSMEs adhere to a certain standard and are not returned to India. Also known as the ZED, the scheme helps MSMEs enjoy rebates and concessions for their exported goods

·         Quality management standards and quality technology tools – This scheme intends to draw in the consciousness of quality in the products manufactured by MSMEs. It encourages healthy competitiveness among different establishments to ensure better production of goods

·         Grievance monitoring system – This scheme was launched to monitor and cater to complaints and suggestions by business and MSME owners 

·         Credit linked capital subsidy scheme – Registered MSMEs can avail funds to replace their old machinery and upgrade their business with new technology. To benefit from this scheme MSMEs can directly approach banks 

The Government has always conceptualized a vivid MSME sector and has often pushed to march upwards. For example, Finance Minister Nirmala Sitharaman raised the turnover threshold for the audit of MSME accounts to Rs 5 crore.  

She also said a new scheme would be announced to provide subordinated debt to MSME entrepreneurs. Besides that, the Government has requested the reserve bank to stretch the debt restructuring window for MSMEs till March 31, 2021. 

The Finance Minister ended it with a promise to introduce an app-based invoice financing loan product that will deal with the problems of delayed payments and cash flow.