How can an MSME Registration boost Your Business?

The pandemic may have hit hard but getting back on track is not as difficult as people believe. Proprietors of micro, small and medium enterprises witnessed a drop in their operations and sales, but there is a way of getting back up from there. With the world turning digital in a large way, instead of shutting down or stalling working, entrepreneurs were able to move various aspects of their businesses online and find ways to keep these businesses alive.

Understanding Where you Stand

Knowing what category your business falls under is very important to understand the options and benefits you can enjoy. For instance, the enterprises that fall under the micro and small category can reap the benefits of the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), which provides them with useful credit options. The three broad classifications one should be aware of are:

  • Micro Enterprises – These are enterprises having an investment of fewer than 25 lakhs
  • Small Enterprises – These enterprises carry investment between INR 25 lakhs to 5 crore
  • Medium Enterprises – Enterprises with investment crossing INR 5 crore but not exceeding ten

These classifications are based only on plant and machinery investment and do not include land and building costs. After obtaining this clarity about your business, the next important step is registering the MSME.

Procedure to Register the MSME

MSME industries contribute substantially to India’s economy. Research indicates that about 6.11 percent of the manufacturing GDP, almost 25 percent of the GDP from the service sector, and more than a quarter of India’s manufacturing output is provided by MSMEs. As of 2020, India had a total of 63 million micro, small and medium enterprises.

The registration process is essential when starting something on such a scale. Not only will this legalize the efforts being put in but will also result in several benefits in terms of credit, taxation, and loans, and will not leave you open to fines and penalties. Companies falling under the manufacturing, production, or service sector can all register themselves in the same way.

To register the MSME, the applicant needs to head over to the government portal and choose the option they fall under. The options are

  • New Entrepreneurs who haven’t registered yet or those with EM-II

New applicants can register by entering their Aadhar and PAN numbers. The entrepreneur’s name will need to be filled in, after which an OTP is generated. On entering this, the PAN verification page will show. Details such as ‘Type of Organisation’, ‘PAN Number’, and other personal details about the industry need to be filled in subsequent steps. Once done, it is submitted and the applicant obtains a message of ‘successful registration’ with a reference number. If everything is done properly till here, within a few days, the Udyam Registration Certificate will be provided.

  • Those with UAM Registration and already having UAM registration through Assisted filling

For people falling in this category, you need to fill in your Udyog Aadhaar Number. An OTP will then be generated, after which you can proceed to fill in the registration details. With this, the process is complete.

Registering the MSME is not a tedious process but comes with a host of benefits. Some of which are as follows:

  • Reduced interest rates for bank loans
  • Carrying forward of credit for MAT (Minimum Alternate tax)
  • Rebates and concessions

Apart from these, registering your MSME also helps you receive government tenders. Being registered on the Udyam Portal provides easy access to the state and center’s e-marketplace and e-tenders.

It should be mentioned that the primary parts of the process are quite similar but there are a few regional differences. The food licence in Haryana, although costs the same as a major part of the country, they are planning on making some changes with the digitisation process to create a better system.

Things to know about your MSME Registration

The good news is that your PAN card and Aadhar card are the only documents needed to register your MSME. Since the process is online, there is no additional documentation proof needed. The GST-linked details about the turnover and investment of the enterprise shall be taken automatically by the portal on providing the PAN details as the portal is integrated with the TAX and GST IN system.

There are several schemes launched by the Government to assist in micro, medium, and small enterprises. Some of these are as follows:

  • Credit Guarantee Trust Fund for Micro and Small Enterprises
  • Prime Minister Employment Generation Programme (PMEGP)
  • Interest Subsidy Eligibility Certificates
  • Market Promotion and Development Scheme
  • Coir Vikas Yojana
  • A Scheme for Promoting Innovation, Rural Industry and Entrepreneurship (ASPIRE)
  • Credit Linked Capital Subsidy for Technology Upgradation
  • Marketing Assistance Scheme

This is just the tip of the iceberg – there are several other schemes and benefits that one can avail of. So even enterprises that witnessed a bit of a slump due to the pandemic can revive their business by simply obtaining an MSME registration and receiving not just financial assistance but assistance in various forms.

Although many people still refer to it as an MSME registration, the term was recently revised to Udyam Registration. However, the process continues to remain the same. The Aadhar card is compulsory to have a business registered on the Udyam Portal. After all, it helps streamline the process. Since there is no bar against existing businesses applying for the MSME registration, as long as the criteria of registration are met, all businesses- new and existing- can register themselves for this. UAM registration will have to be re-done to enjoy MSME benefits. The

certificate once obtained does not expire, but it is important to remember that only manufacturing and service companies are covered under MSME. People who possess plants or units in different cities will be provided a single certificate but need to ensure that information about all the branches is furnished.

Just like the MSME registration, food business operators also need to get a license when starting a business. The FSSAI license is mandatory for most as it is meant to ensure a certain standard of quality and safety in the food production and distribution process. Unfortunately, much like more registration processes, this is a recurring document that has to be constantly updated. When there are changes to the business, they have to be made to the registration as well. Fortunately, like the registration, the FSSAI renewal can be done online as well, allowing applicants to get through the process in a few minutes if they have the right documents.

With the pandemic heading towards a decline, getting one’s business back on track will not be difficult. But one needs to remember that proper registrations and licenses need to be obtained   so that there are no complications later. With a plan to move aspects of your business online and knowledge of the registration process to guide you, paving the path towards a more fruitful future for your business will no longer be a daunting task.

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