MSME Registration

For Micro, Small, and medium-sized enterprises, MSME Registration is beneficial to avail of various benefits like tax exemptions and capital investment, etc.

Business entities that fall under the category of MSME (Micro, Small, and Medium Enterprises) need to register under the MSMED (Micro, Small and Medium Enterprises Development) Act, 2006. Such enterprises form the backbone of any nation and spur their economic growth by providing income opportunities to all. To support MSM Enterprises, benefits are provided under the MSMED Act from the State or Central Government after an enterprise has been registered under the Act. Although the MSME Registration is not mandated by statute, it is beneficial for such enterprises to avail benefits such as exemptions for excise duty, subsidies on power tariff, lower interest rates, subsidies on tax, subsidies on capital investment to name a few. Criteria that need to be fulfilled by an enterprise for registration under the MSMED Act is as per the table below:

EnterprisesInvestment in plant & machinery Manufacturing SectorMicro EnterprisesDoes not exceed 25 lakh rupeesSmall EnterprisesMore than 25 lakh rupees but does not exceed 5 crore rupeesMedium EnterprisesMore than 5 crore rupees but does not exceed 10 crore rupeesEnterprisesInvestment in plant & machinery Service SectorMicro EnterprisesDoes not exceed 10 lakh rupeesSmall EnterprisesMore than 10 lakh rupees but does not exceed 2 crore rupeesMedium EnterprisesMore than 2 crore rupees but does not exceed 5 crore rupees

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Advantages of MSME Registration

• Tax subsidies – Many income taxes, as well as capital gain subsidies, are provided by the Government to MSMEs.

• Lower interest rates – Banks provide MSMEs with lower interest rates on bank loans to the tune of almost 1-1.5 %.

• Quicker approval – Enterprises registered under MSME are provided with quicker approvals from Government in terms of license and certifications.

• Special tenders – Many Government tenders are open only to MSMEs in order to encourage smaller businesses in the country.

• Cheaper facilities – Electricity, infrastructure, etc. are cheaper for MSME Registration business units.

Documents Required for MSME Registration

• Copy of MoA and AoA/Partnership Deed/Trust Deed depending on the business entity.

• A copy of licenses/clearance such as from Electricity Board, Municipal Corporation.

• Copy of purchase or sales bill.

• Bills of machinery.

• Business Address Proof.

For Business Address Proof:

• Telephone/Mobile/Electricity/Gas bill (Less than 2 months old); AND

• In case of rented premises a notarized copy of Rent Agreement with a No-Objection Certificate (NOC) for conducting business;

• In the case of self-owned premises registered title document.