MSME or Udyog Aadhaar Registration or Udyam Registration
Micro, Small and Medium Enterprises (MSME) sector has emerged as a highly vibrant and dynamic sector of the Indian economy. MSMEs not only play a crucial role in providing large employment opportunities but also help in industrialization of rural & backward areas, thereby, reducing regional imbalances, assuring more equitable distribution of national income and wealth. MSMEs are complementary to large industries as ancillary units and this sector contributes enormously to the socio-economic development of the country.MSMEs need assistance and help from the Government as they are not equipped with technology and resources like big companies. Hence, the government provides schemes, incentives and rebates to this sector of the economy.
We at Balakrishna and Co., Bangalore help the entities to obtain new registration, amendment of existing registrations, reregistration as Udyam Registration, consulting on benefits, etc. Our team is well versed with MSME matters. In case, you need these services, we would be glad to assist you. Secondly, based on our past experience, we have short listed the most commonly asked questions by the companies regarding MSME. We are sure the following FAQs will answer most of your questions!
+ How are the enterprises classified as Micro, Small and Medium Enterprises?
As announced on May 13, 2020, now a composite criterion of investment and turnover shall apply for classification as MSME, as against earlier investment criterion. New criteria for classification of MSMEs are as follows:
| Micro | Small | Medium | |
|---|---|---|---|
|
Both Manufacturing and Service Sector |
Investment up to Rs. 1 cr. and Turnover up to Rs. 5 cr. | Investment up to Rs. 10 cr. and Turnover up to Rs. 50 cr. | Investment up to Rs. 50 cr. and Turnover up to Rs. 250 cr. |
- Exports of goods or services or both shall not be considered for the purpose of computation of turnover limit.
- The new definition as above is applicable from July 01, 2020.
- Turnover and investment calculation for the purpose of classification as MSMEs shall be linked to the income tax and goods and services tax (GST)
- If an enterprise does not have PAN, the turnover related figures will be considered on self-declaration basis for a period up to 31st March, 2021 only. After the expiry of said period, PAN and GSTIN shall be mandatory.
All the existing MSMEs will have be re-classified as per new criteria and required to re-register as per new procedure. However, a transition period of up to March 31, 2021 has been specified for them, which implies that if an existing enterprise was registered prior to June 30, 2020, their registration shall be valid up to March 31, 2021. Post March 31, 2021, such entity needs to be registered as per new registration process in order to continue to hold the status of MSME.
+ What is Udhyog Aadhar?
The salient features of Udhyog Aadhar Memorandum (UAM) are:
- The one page simplified registration form would constitute a self declaration format under which the MSME will self certify its existence, bank account details, promoter/ owner Aadhaar details, other minimum basic information required, etc.
- There shall be no fee for filing the UAM.
- Udyog Aadhaar Acknowledgement shall be generated and mailed to the email address provided in the UAM which shall contain unique Udyog Aadhaar Number.
- No supporting document is required to be uploaded or submitted while filing the UAM.
Changes in the registration procedure called as Udyam registration:
A new registration, referred as Udyam registration, has been specified for MSMEs under the Notification. Similar to earlier Udyog Aadhaar Registration, this process is also online and based on self declaration with no documentation upload requirement.
On filing of application for registration, an enterprise shall be assigned a permanent identity number, referred as 'Udyam Registration Number' simultaneously. However, registration certificate, referred as 'Udyam Registration Certificate' will be issued on completion of registration process, i.e., after back-end processing of information submitted.
+ What are the benefits of registering under MSME Act?
- Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) - Collateral free loans up to a limit of Rs.200 lakhs.
- Credit Linked Capital Subsidy Scheme for Technology Upgradation - aims at facilitating technology up-gradation by providing 15% up-front capital subsidy to MSME units.
- ISO 9000/ISO 14001 Certification Reimbursement Scheme - Scheme envisages reimbursement of charges of acquiring ISO9000/ISO-14001/HACCP certifications to the extent of 75% of expenditure subject to a maximum of Rs.75,000 in each case.
- Micro Finance Programme.
- MSME Market Development Assitance (MDA).
- Easy recovery of Debts
- Support from CGTMSE in COVID 19 pandamic
Other registration required to start the business :
- GST Registration
- Registration under Karnataka Shops and Establishment Act
- Profession Tax Registration
- Employee Provident Fund Registration (PF Registration)
- Employee State Insurance Registration (ESI Registration)
- STPI Registration or Non-STPI Registration
- Import Export Code (IEC)
- Trade License from BBMP