MSME Registration

Overview

MSME stands for Micro, Small, and Medium Enterprises. MSME registration is the process of registering a business or enterprise under the MSME Act, 2006 which governs the registration and regulation of Micro, Small, and Medium Enterprises, falls under the jurisdiction of the Ministry of Micro, Small and Medium Enterprises (MSME) in the Government of India. The Ministry is responsible for the promotion, development, and enhancement of competitiveness of MSMEs in the country. It formulates policies and implements various schemes and initiatives for the growth and welfare of MSMEs. The registration process and related activities are managed by the Ministry and its affiliated agencies at both the central and state levels.

Eligibility

Any business entity involved in manufacturing, processing, or providing services can apply for MSME registration. The entity’s investment in plant and machinery or equipment must fall under the specified limits based on its size – micro, small, or medium.

Classification

MSMEs are classified on the basis of their investment in plant and machinery or equipment, and their annual turnover. The classification criteria are as follows:

  • Micro Enterprise: Investment up to ₹ 1 crore and annual turnover up to ₹5 crore.
  • Small Enterprise: Investment between ₹1 crore and ₹10 crore and annual turnover between ₹5 crore and ₹50 crore.
  • Medium Enterprise: Investment between ₹10 crore and ₹50 crore and annual turnover between ₹50 crore and ₹250 crore.

Benefits

  • Easy access to credit and loans at a lower interest rate.
  • Preference in government tenders and procurement processes.
  • Protection against delayed payments from buyers.
  • Financial support for technology adoption and innovation.
  • Income tax and capital gains tax exemptions.
  • Subsidies for patent registration and reimbursement of ISO certification expenses.

List of Documents Required

  • Aadhar card
  • PAN card

This does not require proof of documents. PAN and GST-linked details on investment and turnover of enterprises will be taken automatically by the Udyam Registration Portal from the Government databases since the portal is integrated with Income Tax and GSTIN systems.

Process

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Use your AADHAR ,PAN, email id and mobile no. to fill out the details for new registration. Verify AADHAR Using your mobile no. linked with Aadhar with one time password(OTP). After that Validate PAN Using PAN No. After that application form will  appear fill in all required details.Select NIC code as per nature of activity and no. of employee . Preview the provided detail then click on submit button and Get the final One Time Password (OTP) and Submit Button. After submitting form you will receive UDYAM REGISTRATION CERTIFICATE on your email.

What is MSME Return/MSME Form-1?

MSME Form 1 is a form to provide half-yearly returns with the registrar regarding outstanding payment to Micro and Small Enterprises. Every specified company must file the MSME return to submit the half-yearly return to the Ministry of Corporate Affairs, including the below-mentioned information

  • Reason for delay in payment
  • Amount due for payments

What is the purpose of filing MSME Form-1?

The purpose of introducing the MSME-1 is to prevent losses, as companies who take goods and services won’t pay an amount after much delay. Thus, MSME return asks the companies to report the amount due for payment and the reason for the delay of the same after 45 days of receiving the goods and services.

Due Date of Filing MEME Return

 

Filing period Due date
From April to September 31st October
From October to March 30 April

What are the type of MSME Return ?

  • Initial Return:- The companies must file this return within thirty days of issuance of the MCA order in form MSME Form-1 revealing the outstanding amount towards MSMEs.
  • Half Yearly Return:- Each company must file a half-yearly return on or before the mentioned date revealing the outstanding amount towards MSMEs.

What Are The Documents Required For Filing MSME Return ?

Documents Required For Initial Return

  • Supplier’s PAN
  • Sum of the amount due
  • Supplier’s name
  • Reasons for payment delay
  • Amount due date
  • Date from which amount is due
  • Digital Signature Certificate (DSC)

Documents Required For Regular half-yearly return

  • Period of which file it belongs
  • Company’s PAN
  • Company’s E-mail address
  • Sum of due outstanding of a specific period
  • Information regarding supplier’s name and the sum of the amount due
  • Reasons for delay in payment
  • If any, include attachments

What is the penalty of non-filing MSME Form-1 ?

Suppose within thirty days a company fails to file or intentionally issue inaccurate information or statistics in any aspect. In that case, the company is liable to pay the fine, extending up to Rs 25,000 to Rs 3,00,000. Moreover, every involved officer could also be imprisoned for the same, which could increase up to six months, or both.