The last few years have witnessed how the contribution of Micro, Small, and Medium Enterprises (MSMEs) in India has grown tremendously. Contributing a substantial 30% of the country’s GDP they generate thousands of job opportunities every year. This way, they have revived the rural and urban ecosystems across the country.
To further strengthen and encourage MSMEs, recently, the Government of India revised the MSME license procedure. In this article, we will talk about the ins and outs of the MSME License online. Read on to know all about MSME License and how to generate it online.
What is MSME License Online?
MSME license online ensures that enterprises in the MSME (Micro, Small, and Medium Enterprises) category have the ultimate right to enjoy government-facilitated MSME benefits. The main aim of this online license is to encourage people to launch new startups or MSMEs.
What is MSME Classification?
The Government of India initially introduced the MSME registration process under the MSME Act of 2006. At that time, the MSME classification criteria were based on investment in plant, machinery, or equipment.
However, the revised MSME definition came into effect from 01.07.2020. A noteworthy point is that the GOI revised the MSME classification by eliminating the difference between manufacturing and service enterprises. Also, it made the annual turnover and investment limits essential factors to determine if an entity is an MSME.
Here’s how the revised definition classifies the MSMEs:
| Size of the Enterprise | Investment Limit | Annual Turnover |
| Micro Enterprises | Investments of less than ₹1 crore | Annual turnover of less than ₹5 crore |
| Small Enterprises | Investments of less than ₹10 crore | Turnover up to ₹50 crore |
| Medium Enterprises | Investments of less than ₹50 crore | Turnover up to ₹250 crore |
What is MSME Udyam Registration?
MSME Udyam registration is a kind of e-certification that provides established businesses or new establishments the recognition of MSME (Micro, Small, and Medium Enterprises) from the Indian government. This registration ensures that the firm is legal and operational. In recent years, the Ministry of Micro, Small, and Medium Enterprises has simplified the MSME license procedure by making it online.
Any entrepreneur may complete the procedure online via the Udyam Registration Portal to benefit from the government. Under this registration, a unique identification number that is permanent and called the ‘Udyam Registration Number’ is issued to the eligible company. Additionally, entrepreneurs get a registration certificate that certifies the enterprise as an MSME. This way, registered MSME enterprises enjoy plenty of benefits provided by the government for their establishment and expansion.
MSME Registration Eligibility
Now that you have learned how the revised MSME classification has made specific investment limits and annual turnover deciding factors for micro, small, and medium enterprises. Let’s explore the entities that are eligible to apply for the MSME registration procedure through the following pointers:
- Sole proprietorship
- Partnership firm
- Limited Liability Partnership (LLP)
- A private limited company (Pvt. Ltd.)
- One-person companies (OPC)
- Public companies
- Individuals, business owners, entrepreneurs, and start-ups
- Self Help Groups (SHGs)
- Co-operative Societies
- Trusts.
- List.
Documents Required for MSME Registration
To be successfully registered with the Udyam registration portal, you do not need to upload many documents. Only the following documents are sufficient to complete the application procedure:
- Aadhar Card
- For the Proprietorship Firm, the Aadhar card of the proprietor is mandatory
- For the Partnership Firm, the managing partner’s Aadhar card is vital
- For a Public or Private Company/Cooperative Society/Trust/Limited Liability Partnership, the Aadhar Card of the organisation or authorised signatory is a mandatory requirement
- And, for a Hindu Undivided Family (HUF), the Aadhar Card of the Karta is to be filled in the Udyam Registration form.
- PAN Card
- GSTIN or GST Identification Number (Applicable only when the enterprise needs to be registered under the GST law.)
Note: Enterprises not registered with the GST law can obtain an MSME license online without the GSTIN number. Conversely, entrepreneurs who mandatorily require GST registration must complete the GSTIN document requirement while applying for the MSME license.
How to Apply for MSME Registration on the Udyam Registration Portal?
The good thing is that the procedure of applying for MSME registration on the Udyam Registration Portal is easy and quick. All you need is a computer system and a robust internet connection to register your organisation as an MSME. Once you visit the official portal, you will see the following two categories to choose from:
- New entrepreneurs who have not yet registered as an MSME or those with EM-II
- Those who have already registered as UAM and for those who already have registration as UAM through assisted filing
New Entrepreneurs Who Are Not Registered as an MSME / Those with Em-II
Follow the following steps to complete the MSME License or registration procedure:
- First off, head over to the official portal Udyamregistration.gov.in
- Select the tab For New Entrepreneurs Who Are Not Registered as an MSME or Those with Em-II to go to the next page
- Enter Aadhar Number
- Then, enter the entrepreneur’s name
- Click on the option Validate to Generate OTP
- Input the OTP in the specific column
- After OTP verification, enter the GSTIN number along with the Type of Organisation and PAN card number if your enterprise comes under the category of the GST regime
- Then, click the Validate PAN button to verify the entered PAN card details
- After PAN card verification, the entrepreneur needs to fill in the personal details, such as name as per Aadhar/PAN, mobile number, email ID, and other key information of the enterprise
- Then, enter the investment details as well as annual turnover using the self-declaration
- Click the option ‘Submit and Get Final OTP’
- Enter the received OTP number and click the option Submit
- Finally, the concerned authority will send the OTP to your email address within a few days.
For MSME Re-registration
Go over the following steps for successful MSME re-registration:
- Visit the official portal Udyamregistration.gov.in
- Select the tab For Those Already Having Registration as UAM and For Those Who Already Having Registration as UAM Through Assisted Filing
- Enter Udyog Aadhar Number
- Select the OTP option
- Then, click Validate and Generate OTP button
- After OTP verification, provide registration details on the online MSME registration form
- This way, you can complete the re-registration procedure in no time.
Here are some FAQs that you may have about MSME procedures.
- What are MSME registration fees in India?
There are no MSME registration fees charged in India. The entrepreneurs can apply for it on the official Udyam registration portal without paying any fee.
- How should I apply for an MSME registration certificate?
To apply for an MSME registration certificate, visit the Udyam registration portal. Here, you will find two categories- one is applying for the first time and the other one is the MSME re-registration. Then, complete the on-screen instructions for the successful registration. Remember that you need to provide the GSTIN if this is mandatory for you as per the GST law.
But, if your company is not bound to follow the GST regime, you can apply for the MSME registration without it. Once you submit all the details, an online MSME registration certificate will be delivered to your email address.
- What is the MSME registration number?
The MSME registration number is a unique and permanent identification number. Most importantly, this number makes your enterprise unique amongst other MSMEs.
- How should you check the MSME registration status online?
With a few easy steps, you can check the MSME registration status online. Hence, consider the following steps:
- Head over to the official Udyam registration portal
- Click on the option Print/Verify
- Then, click the option Verify Udyam Registration Number
- Input the reference number and enter the captcha code
- Finally, click the verify button.
- How can you enable the MSME registration certificate download on the portal?
Take a look at the following steps to enable the MSME registration certificate download:
- Go to the official portal of Udyam registration
- Hit the option Print/Verify
- Select the option Print Udyam Certificate
- Then, enter the Udyam registration number and mobile number
- Choose the OTP option and click the ‘Validate and Generate OTP’ button
- Enter the received OTP in the given column
- Click the option ‘Validate OTP and log in’
- Once you log in, take a printout of the Udyam registration certificate.
- What are the MSME registration benefits?
Check out the following MSME registration benefits to know how it can be a lucrative opportunity for your business growth:
- You can easily get approval on collateral-free loans from banks and other financial institutions
- One-time settlement fee for non-paid amounts on MSMEs
- Discount offers on utility bills
- Low interest rates (1-1.5%) on bank loans
- Subsidy on barcodes and patents
- Acquire government tenders
- Extra time to pay off delayed payments to vendors
- Reimbursement of the ISO certification charges
- Avail the benefit of special exemptions in all kinds of direct taxes
- Can be the beneficiary of many government schemes, such as Credit Guarantee Scheme, Credit Linked Capital Subsidy Scheme, Public Procurement Policy, etc.
- Can leverage the benefit of government security deposit while applying for e-tenders.
- How can you check MSME registration by name?
It is not possible to check the MSME registration by name.
Conclusion
Generating the MSME license online is a matter of a few easy steps. With zero registration fees, it has transformed many small business enterprises. It helps them on various fronts and offers opportunities such as funding financial assistance, technological advancement, subsidy on power supply, and global expansion.
