All the Information you Should Know Before the MSME Registration.

Defining MSME (Micro, Small and Medium Enterprises)

The MSME, also known as small-scale enterprises, is the establishment of the industrial structure brought into place by the government in agreement with the micro, small, and medium enterprises development (MSMED) act, 2006. These enterprises are significantly engaged in the manufacturing, production, preservation, and processing of goods and commodities.

MSME is one of the most crucial sectors of the Indian economy and has contributed a lot in developing the socio-economic structure of the vital role in energizing the Indian economy. If you want to start your business as MSME, then it becomes pertinent to conduct registration under MSME in India.

The MSME sector contributes to the employment sector by offering jobs to semi-skilled and unskilled individuals in rural areas. Still, it has worked for the development of the semi-urban and rural regions of India.

Before 2018, the MSMEs were defined as per their annual amount invested but later, after the government via notification mentioned to change the MSME definition based on their yearly turnover irrespective of whether they belong to the manufacturing or service sector.

The insufficiency of financial support is the major challenge that the MSME sector is facing in general. To obtain financial support such as low-interest bank loans, financial aid, collateral security free loans, the enterprises will have to get themselves registered via the new process.

Who can apply for it?

Apart from the MSME level business firms, a private company, OPC, LLP, proprietorship firm, and public companies can apply for it. The government has given turnover and investment limits to decide whether an enterprise comes under the MSME category or not.

Micro category – if the investment of the manufacturing industry does not go beyond Rs. Twenty-five lacs or a service industry investment does not go beyond Rs. 10 lacs; then, one can apply for micro category registration.

Small category – if the manufacturing industry’s investment does not go beyond Rs. 5 crores or a service industry investment does not go beyond Rs. 2 crores, then one is eligible for it.

Medium category – if the manufacturing industry’s investment does not go beyond Rs. 10 crores or a service industry investment does not go beyond Rs. 5 crores, then one is eligible for it.

The registration process of the MSME

– Any type of business entities regardless of their business scale or type, can choose to follow process for MSME certification or Udyam Aadhar. However, it is not compulsory registration, and it is the sole volition of the business owner or head of the business to apply for it. It is suggested to acquire SSI/MSME/Udyam Aadhar right after its registration to benefit from the MSME act.

– Anyone who wants to register and get benefits under the MSME might apply on the Udyam registration portal, which is cost-free and based on self-declaration, with no separate documental papers, proof, or certificate to be uploaded according to the latest notification issued by the MSME ministry on this regard.

– Earlier, MSMEs were registered with the assistance of Udyog Aadhar registration, but after the 1st of July, 2020, Udyog registration and Udyog Aadhar have become the same. Also, Udyog Aadhar registration converts into the Udyam registration process.

– Udyam registration has been wholly based on the income tax and good sales tax systems. Although, old businesses that have been registered with the MSME act by using the EM-II (memorandum of entrepreneurs) or Udyog Aadhar memorandum or any other registration issued by the MSME ministry are obliged to re-register their business as per the law.

Document required for the registration of the MSME

– Purchase bill and sales bill’s copies. 

– Machinery purchased and required licenses’ Copies. 

– Memorandum of association and articles of association/partnership deed.

– Address proof of the business.

Step-by-step registration process

– The enterprise should register itself on the Udyam registration portal with required documents as per the stated guidelines.

– Aadhar number is compulsory for registration on the Udyam registration portal.

– A PIN will be generated after the E-certification completion.

– Enterprise should submit income tax return/GST return on the Udyam Aadhar portal.

– Based on GSTR/ITR uploaded, reclassification within categories of MSME might be made.


MSMEs are growing leaps and bounds in the country due to their overexpanding reach and support from the central government. The new classification process that helps in advancing this sector and it would also make it quicker, easier and simpler for entrepreneurs to register themselves under this act, and all the information would be linked under the income tax act and GST, which would help in keeping a check on the veracity of the given information. It would help entrepreneurs and the government in a significant way in the foreseeable future.


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