MSME Registration in India

What is MSME-Micro, Small and Medium Enterprises ?

MSME is the short form for Micro Small Medium Enterprises and it is also called as Small Scale Industry (SSI). It is an Act called as MSMED Act, also Micro, Small and Medium Enterprises Development Act, 2006 for the growth of the small business upto the investment for 10 crores in manufacturing sector and 5 crores in case of service industries. The Government of India through various subsidies, schemes and incentives promote MSMEs through the MSMED Act. To avail the benefits under the MSMED Act from Central or State Government and the Banking Sector, SSI or MSME Registration is required.

Definition of MSME-Micro, Small and Medium Enterprises

In accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified in two Classes:

1. Manufacturing Enterprises – The enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the first schedule to the industries (Development and regulation) Act, 1951) or employing plant and machinery in the process of value addition to the final product having a distinct name or character or use. The Manufacturing Enterprise are defined in terms of investment in Plant & Machinery.

2. Service Enterprises:- The enterprises engaged in providing or rendering of services and are defined in terms of investment in equipment.

The limit for investment in plant and machinery / equipment for manufacturing / service enterprises, as notified,vide S.O. 1642(E) dtd. 29-09-2006 are as under

Manufacturing Sector
Enterprises Investment in plant & machinery
Micro Enterprises Does not exceed twenty five lakh rupees
Small Enterprises More than twenty five lakh rupees but does not exceed five crore rupees
Medium Enterprises More than five crore rupees but does not exceed ten crore rupees
Service Sector
Enterprises Investment in equipments
Micro Enterprises Does not exceed ten lakh rupees:
Small Enterprises More than ten lakh rupees but does not exceed two crore rupees
Medium Enterprises More than two crore rupees but does not exceed five crore rupees

Who can Apply for MSME Registration?

Both new and existing business can apply for MSME registration and get the certificate. Micro, Small and Medium sized enterprises in both the manufacturing and service sector can obtain MSME Registration under the MSMED Act.

Benefits of MSME Registration

SSI or MSME registration is not statutory, however it is beneficial for business because it provides a range of benefits such as eligibility for lower rates of interest, excise exemption scheme, tax subsidies, power tariff subsidies, capital investment subsidies and other support.

Document and Information Required for MSME Registration

  • Aadhar No. of applicant entrepreneur
  • PAN of the business entity
  • Social Category of the applicant entrepreneur (General, Scheduled Caste, Scheduled Tribe or Other Backward Castes (OBC)
  • Physically handicapped status of applicant entrepreneur
  • Name of enterprise
  • Type of legal entity
  • Location of plant
  • Official/correspondence address of the enterprise
  • Date of commencement
  • Bank details
  • Major activity
  • Person employed
  • Investment in plant & machinery/equipment

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