SSI MSME REGISTRATION

From the past until 2006, Small Scale Industries played a crucial role in the Indian economy. However, the government decided to replace SSI registration with Micro, Small and Medium Enterprises (MSME) registration to help small businesses thrive. The objective was to establish a more organized and well-structured system to encourage the growth of small businesses. To access various government schemes and incentives, businesses need to go through the MSME registration process.

This article will examine MSME registration in detail, including its advantages and the process of registering.

WHAT IS MSME REGISTRATION?

The MSME registration is a program offered by the government that grants a distinct identification number to small businesses. The identification number is determined by the yearly revenue and investment in plant, machinery, or equipment. While the registration is not required, it is encouraged for companies seeking access to beneficial programs and incentives provided by the government.

BENEFITS OF MSME REGISTRATION:

Enrolling your company in the MSME program comes with numerous advantages. A few examples of such benefits are outlined below:

Small and medium-sized enterprises (MSMEs) are granted access to a range of government incentives and schemes, like tax exemptions, subsidies, and credit guarantees, once they register with the government.
Small and medium-sized enterprises (MSMEs) have priority access to bank loans, resulting in reduced interest rates and simplified loan processes.
The government has implemented a regulation that aims to guarantee that MSMEs receive compensation for their goods or services within 45 days of the invoice’s issuance. If the payment is postponed, the purchaser must pay an interest rate three times higher than the existing interest rate set by RBI.
Obtaining licenses and registrations necessary for setting up and running a business becomes easier through MSME registration.
The government has introduced several programs to aid MSMEs in gaining entry into both national and worldwide markets. One of these is the Public Procurement Policy, which requires a specific percentage of government purchases to come from MSMEs.
Being registered as an MSME enables businesses to qualify for government tenders, which can be a substantial source of income for small enterprises.
To advertise and enhance the products produced by MSMEs, the government has initiated various initiatives including the Zero Defect Zero Effect (ZED) plan that has the objective of improving the quality of MSME items.

TYPES OF MSME REGISTRATION:

The MSME Act of 2006 permits MSMEs to register in two ways.

Udyog Aadhaar Memorandum (UAM) is a process of online registration that allows MSMEs to acquire a unique identification number known as Udyog Aadhaar Number (UAN). The procedure is straightforward and can be completed by entering some fundamental information on the internet.
The Entrepreneur Memorandum (EM) procedure entails submitting an application with the District Industries Center (DIC) to register one’s business. This method necessitates more comprehensive data and paperwork in comparison to that of the Udyam Aadhaar Memorandum (UAM).

HOW TO REGISTER FOR MSME:

Registering your business under the MSME scheme is a process that is uncomplicated and easy to understand. The steps to complete this registration are listed below.

First, go to the MSME’s official website, which can be accessed at https://udyogaadhaar.gov.in/UA/UAM_Registration.aspx.

Secondly, enter the necessary information including the name of the establishment, its location, banking particulars, and the category of the business organization.

In the third step, you need to furnish the PAN and Aadhaar details of either the business promoter or the owner.

In step four, input the amount of money invested in the company’s equipment, machinery, or infrastructure, as well as the business’s annual revenue.

Step 5: Submit the application.

After submitting the application, the business will be given an MSME registration number which can be utilized to avail government incentives and schemes.

PROCESS OF MSME REGISTRATION:

The procedure for MSME registration differs based on the type of registration selected. Nevertheless, the fundamental steps for both UAM and EM are the same.

Collect the essential papers: You must acquire the needed records, such as PAN card, Aadhaar card, and business registration papers.
Select the registration type: Determine which one, UAM or EM, suits your business requirements and apply for it accordingly.
Complete the application form: Ensure that all the necessary details are filled in the application form and then submit it via the internet (for UAM) or deliver it to the DIC (for EM).
The relevant authority will review and check the accuracy of all the information provided in the application to verify its authenticity.
Once the application for MSME registration is given the green light, a certificate for the registration will be provided.

The documents that are necessary to obtain MSME registration are:

To register for MSME, the necessary papers are needed.

The Aadhaar card belonging to either the owner or promoter of the business.
The PAN card belonging to the individual who owns or promotes the business.
Documents related to the registration of businesses, such as Partnership Deed, Memorandum of Association (MOA), Articles of Association (AOA), and so on.
Evidence that confirms the ownership of the business location may include documents like a lease agreement or a property tax receipt.
A document that shows financial activity within a bank account, such as deposits, withdrawals, and balances, is known as a bank account statement. Another document that can be used to provide proof of bank account ownership and financial activity is a cancelled cheque, which has been marked as void and cannot be used for payment.

COST AND TIME INVOLVED:

The cost of registering as an MSME is very low and can differ based on the state where the business is registered. The charges for UAM enrollment are commonly less than the fees for EM registration. The duration required to complete the registration procedure is influenced by the type of registration and the state of registration. Broadly speaking, the UAM registration process is quicker than the EM registration process.

ADVANTAGES OF MSME REGISTRATION:

There are several benefits associated with registering for MSME, such as:

Accessing government programs and benefits
Priority lending from banks
Protection from delayed payments
Licenses and registrations can be acquired without difficulty.
Eligibility for government tenders
The ability to enter and conduct business in both domestic and global markets.
Branding and promotion of MSME products

DISADVANTAGES OF MSME REGISTRATION:

Registering for MSME does not pose any major drawbacks. Nonetheless, some enterprises may perceive the registration procedure as overwhelming, and there could be insignificant expenses implicated in the registration procedure.

Legal prerequisites for registration of MSME:

Registration for MSME is not compulsory. Nonetheless, particular licenses or authorizations may be necessary for certain companies, based on the type of their enterprise. It is recommended to seek guidance from a legal specialist to guarantee that all statutory obligations are fulfilled.

RULES FOR MSME REGISTRATION:

Registration of the business in India is required.
According to the MSME Act of 2006, the enterprise must meet the criteria to be classified as an MSME.
The enterprise should not involve itself in any illicit or restricted operations.
The enterprise is obligated to adhere to all applicable statutes and rules.

CONCLUSION:

Getting oneself registered under MSME is a crucial measure for companies that aim to benefit from a variety of government schemes and rewards. Enrolling is an easy and transparent process, and the positive outcomes of enlisting are innumerable. Subscribing to MSME plan guarantees progress and provides opportunities to reach out to diverse markets, making it an ideal choice for small businesses.