MSME Registration
(Udyog Aadhaar)

The following are the major benefits given to registered MSMEs under the Micro, Small & Medium Enterprises Development (MSMED) Act:

• You can get collateral-free loans from banks under the credit guarantee fund scheme for micro and small enterprises (CGS)
• Some items have been earmarked to be manufactured only by small-scale enterprises
• Once you get the MSME certificate for your microenterprise, it gets much easier to get licenses, registrations, and approvals for the same. Being able to show your MSME certificate while making these applications will speed up the process
• You get special consideration for participating in international trade fairs, exhibitions, and buyer-seller meets. You can also hold international seminars and conferences which are in the interest of the MSME sector
• When you have MSME registration, you get many things done at a subsidised price: barcode registration, NSIC performance and credit ratings, industrial promotion subsidy (IPS) subsidy, ISO certification, electricity bill, and patent registration
• The interest rate charged by banks for MSME registered enterprises is lower than the normal interest rate
• To promote technological growth among the micro industries CLCSS scheme was introduced that provides a 15% capital subsidy up to 15 lakhs for the purchase of plant and machinery
• While applying for a government tender, the ministry of micro, small and medium enterprises gives the following benefits to a microenterprise:
  • Tender sets can be issued free of cost
  • They are exempted from paying the earnest money
  • Security deposit is waived up to a certain monetary limit.

There are many other benefits under the Act and benefits are introduced through annual budgets as well.

Provisional MSME Registration

This is given for entities which are yet to begin functioning. With provisional registration the MSME can:

• Obtain facilities for accommodation, land, etc.
• Obtain important approvals and NOCs
• Obtain clearances from regulatory bodies such as the pollution control board and labour regulations
• Obtain term loans and working capital from financial institutions and banks under priority sector lending.

A PRC (provisional registration certificate) is allotted to new enterprises without any field enquiry and is valid for 5 years.

Permanent MSME Registration

It is given to industrial units that are already functioning. All the benefits available to MSMEs can be availed by them.

The following conditions have to be met for getting a permanent registration:

• The unit has obtained statutory and administrative clearances as required
• The unit does not violate any regulation or restriction
• The value of plant and machinery in the unit does not exceed the prescribed limits
• There should be proof the enterprise is not owned, a subsidiary of or controlled by another industry.

The entities that fall under the following three categories can apply for MSME registration.

Micro Enterprises

Where the investment in plant and machinery is not more than ₹1 crore and the annual turnover is not more than ₹5 crores.

Small Enterprises

Where the investment in plant and machinery is not more than ₹10 crores and the annual turnover is not more than ₹50 crores.

Medium Enterprises

Where the investment in plant and machinery is not more than ₹50 crores and the annual turnover is not more than ₹250 crores.