What Is MSME Registration?
Formalization is vital for India’s Micro, Small, and Medium Enterprises (MSMEs), granting them legal recognition, access to credit, and inclusion in formal supply chains. It boosts competitiveness, innovation, and compliance with standards, driving growth and stability. However, many MSMEs remain informal due to complex regulations and limited awareness, creating a significant registration gap. Bridging this gap can unlock entrepreneurial potential, generate employment, and fuel economic growth. Collaborative efforts by policymakers, industry bodies, and financial institutions are essential to make formalization accessible. Let’s explore the process, eligibility, and benefits of formally registering MSMEs.
MSME Registration Eligibility
MSMEs are classified based on the following criteria delineated by the government:
| Enterprise size | Investment | Annual turnover |
| Micro | Less than Rs. 1 crore | Less than Rs. 5 crore |
| Small | Less than Rs. 10 crore | Up to Rs. 50 crore |
| Medium | Less than Rs. 20 crore | Up to Rs. 100 crore |
Businesses engaged in manufacturing, trading and service industries that fall into any one of these categories can apply for MSME registration.
Here are the organizations or businesses that are eligible for MSME registration:
- Entrepreneurs, startups, business owners
- Private and public limited companies
- Sole proprietorships
- Partnership firms
- Limited Liability Partnerships
- Self Help Groups
- Co-operative societies
Documents Required for MSME Registration
Udyam Registration is fully digital, providing a seamless experience for entrepreneurs. To register as an MSME, you’ll need the following documents:
- Aadhaar number of the owner or authorized signatory of the enterprise
- PAN card of the enterprise
- GSTIN, if applicable
- Business address proof, such as electricity or telephone bills or property tax receipt
- Bank account details
How to Apply for MSME Registration on the Udyam Registration Portal?
Given the myriad advantages of formalizing an MSME business, if you’re a small business owner, it’s time to get started on registering your business. The Udyam registration process requires the submission of a few documents, including personal information, company information, and so on. Here’s a step-by-step guide to go about registering your small business:
Udyam Registration for New Entrepreneurs Not Registered as MSME or those with EM-II
Step 1: Start by visiting the official Udyam Registration Portal at udyamregistration.gov.in.
Step 2: On the homepage, click on the ‘For New Entrepreneurs’ tab. This will direct you to the Udyam registration form.
Step 3: Enter your Aadhaar number and the name as per the Aadhaar card. Validate these details by entering the OTP sent to your mobile number linked to Aadhaar.
Step 4: Once Aadhaar is verified, input your PAN details. The system will auto-fetch linked business data. If you are a proprietor, partnership firm, or a company, ensure the authorized person’s Aadhaar and PAN details are used.
Step 5: Specify the type of organization (e.g., Proprietorship, Partnership, LLP, etc.) and complete other form sections, including:
- Business name and address
- Major business activity (Manufacturing or Services)
- NIC Code (to classify your business activity)
- Employee count and investment in plant & machinery/equipment
- Bank details (Account Number and IFSC code).
Step 6: Review all details carefully, as the form is self-declaratory. Once verified, click Submit. An OTP will be sent again to your registered mobile number for final confirmation.
Step 7: After successful submission, a ‘Thank You’ message will appear. You will receive the Udyam Registration Number and a confirmation message via your registered email and mobile number.
Step 8: You can now download and print your Udyam Registration Certificate for your records. Note that the process is instant for most applicants, but in rare cases, it may take up to 2-3 working days for completion.
Registration for Entrepreneurs Already Having Udyog Aadhaar Memorandum (UAM)
Step 1: Visit the official Udyam Registration Portal at udyamregistration.gov.in.
Step 2: On the homepage, click on the option ‘For those already having registration as UAM’ or ‘For those already having registration as UAM through Assisted filing.’
Step 3: Enter your Udyog Aadhaar Number (UAM) and validate it by selecting the option to generate an OTP. The OTP will be sent to your registered mobile number or email ID linked with your UAM.
Step 4: After OTP verification, you will be prompted to enter your Aadhaar Number linked to the entrepreneur’s name or the authorized signatory.
Step 5: Verify your Aadhaar details using the OTP sent to the mobile number linked with your Aadhaar.
Step 6: Once Aadhaar verification is successful, the portal will fetch your existing UAM details. Complete or update the necessary business information, including:
- Organization type
- PAN details
- Business activity (Manufacturing or Services)
- Investment and employee details
- Bank details.
Step 7: Review all the pre-filled and updated information carefully. Submit the form for final confirmation.
Step 8: After submission, you will receive your new Udyam Registration Number and confirmation via your registered mobile number and email.
Step 9: You can then download and print your Udyam Registration Certificate for your records.
How to Register an MSME Without an Aadhaar Card?
If an MSME owner does not have an Aadhaar card, Udyam registration can still be completed through the District Industries Centre (DIC). In such cases, the applicant must submit alternative identification documents like a PAN card, Voter ID, Passport, or Driving License. They can also use the Aadhaar of an authorized representative. The DIC officials will assist them in manually entering the required business details, including organization type, PAN verification, bank details, and investment data, into the Udyam Registration system.
Upon verification and successful validation, the Udyam Registration Number and certificate are generated and sent to the applicant’s registered email. Once the applicant obtains an Aadhaar card, they must update their details on the Udyam Registration Portal to complete the process. This ensures that MSMEs can initially access government benefits even without an Aadhaar.
Grow your MSME with collateral-free business loans
MSME Registration Number
The GST Application Reference Number, or GST ARN, is a unique 15-digit code generated when a GST registration application is submitted by a business owner on the government’s GST portal. This number acts as a reference for tracking your application as it moves through the verification stages. Every applicant receives the ARN via SMS and email after submitting their GST registration application. The ARN helps both you as the applicant and GST officials monitor the status of the registration and can also be used for filing amendments or cancellations, if needed.
ARN has been put in place to make it easy to track GST registration status. The ARN registration process is a fairly straightforward one to make it easily navigable for business owners from all backgrounds and levels of tech savviness. However, it can still be a challenge if you don’t know the steps to follow.
After completing and submitting the GST registration form, the GST ARN number is automatically generated by the GST portal. This number is linked to your application, and any correspondence regarding the status or required clarifications will be tied to this reference number. Once the ARN is issued, you can use it to track their ARN GST status or the status of the registration application in real time, ensuring they stay updated on its progress.
Step-by-step Guide on How to Check MSME Registration
Here are the steps you need to follow to check your MSME registration status:
Step 1: Visit the Udyam Registration Portal: Go to the official Udyam Registration website at udyamregistration.gov.in.
Step 2: Locate the Verification Section: On the homepage, find the option labeled “Verify Udyam Registration Number” in the menu bar and click on it.
Step 3: Enter the Udyam Registration Number: In the designated field, input the 19-digit Udyam Registration Number (URN) associated with the MSME you wish to verify.
Step 4: Provide the Captcha Code: A security captcha code will appear on the screen. Enter it correctly in the provided box to proceed, and click on ‘Verify’.
Step 5: View the Registration Details: The details of the MSME registration, such as the business name, registration date, and category, will appear on the screen if the URN is valid.
Benefits of MSME Registration
MSME registered business (Micro, Small, and Medium Enterprise) enjoy a multitude of advantages that not only promote growth but also ensure financial stability. The benefits of MSME registration include:
- Access to loans, in some cases collateral-free loans, from formal lenders.
- The benefits of the excise exemption scheme reduces direct tax liabilities.
- Special tax breaks, reducing the tax obligations.
- Subsidies for trademark filing, safeguarding the intellectual property rights of the enterprise.
- Ensures the credibility of your business, and facilitates easy access to global markets.
- Special rebates and concessions on patents and industrial setups.
- Registered MSMEs can be benefitted from a one-time settlement fee, in case of a debt scenario.
- A competitive edge in accessing various government contracts.
- Electricity bill concessions, further reducing operational costs.
- Government-backed credit guarantee programs are extended to registered MSMEs.
- Participation in international trade fairs, fostering global exposure.
- Barcode registration subsidies, streamline inventory management and product distribution.
In other words, a registered MSME enjoys multiple benefits which not only ensures the economic stability of the enterprise but also is instrumental in the growth and welfare of the enterprise.
How to Download MSME Registration Certificate?
Follow these steps to download your MSME registration certificate:
- Visit the Udyam Registration Portal and on the homepage, click on the option labeled “Print/Download Certificate.”
- Enter Your URN in the designated field.
- Choose how you want to verify your identity—through the mobile number or email ID linked to your Udyam account.
- An OTP will be sent to your registered mobile number or email. Enter the OTP in the verification box to proceed.
- After successful verification, the MSME registration certificate will be displayed on the screen. You can now download and save the certificate for your records.
Difference Between MSME and Udyam Registration
MSME registration is often used to mean the older Udyog Aadhaar system of registration for small businesses, whereas Udyam is the new and improved version of the registration process. The primary difference between Udyam and Udyog-Aadhaar Registration lies in the process and verification standards. Udyam Registration mandates PAN and GSTIN, replacing Udyog-Aadhaar’s self-declaration method. Fully digital and paperless, Udyam offers a seamless experience and integrates with GST and IT portals for data verification, unlike Udyog-Aadhaar’s partially manual system. Udyam allows a single registration linked to Aadhaar, issuing an e-certificate with a unique URN, whereas Udyog-Aadhaar permitted multiple registrations with a 12-digit unique number. With Udyog-Aadhaar now obsolete, businesses must re-register under Udyam, the current standard for MSME registration.
Accelerating uptake
The Udyam portal has seen a strong upsurge in registrations, surpassing 4.77 crore MSMEs as of July 2024, marking a significant milestone in formalizing India’s MSME sector. Of these, the Udyam Assist Platform (UAP), launched in January 2023, has onboarded micro-entrepreneurs, including those outside the GST framework. These efforts have contributed to creating approximately 17.94 crore jobs.
The digital portal integrates with GSTIN and PAN systems, simplifying compliance and formalization. However, with over 6.3 crore MSMEs in India, the registration process, while progressing well, highlights the need for continued efforts to ensure widespread formalization and unlock benefits for all MSMEs.
Conclusion
MSME registration is a pivotal step for small businesses, offering a gateway to a host of advantages. It also underscores a business’s credibility and adherence to governmental regulations, bolstering its reputation. The perks of registration encompass a wide spectrum, encompassing access to various government schemes, and the facilitation of credit access.
The process of securing credit facilities and business loans has been significantly streamlined through the Udyam Registration number. For entrepreneurs registered under Udyam, accessing unsecured loans, such as those offered by Kinara Capital, has become exceptionally swift. Non-Banking Financial Companies (NBFCs) like Kinara Capital are actively working to bridge the credit gap for MSMEs in India, enabling them to secure fast business loans without the need for property collateral, thereby facilitating their growth and development.
Kinara Capital’s digital process enables small business owners to check their eligibility in just 1 minute through the myKinara App. MSME entrepreneurs can avail of a collateral-free business loan from ₹1 lakh – ₹30 lakhs with doorstep customer services in their preferred vernacular language. With Udyam registration and minimum documentation, an MSME business owner can go from decision to disbursement within 24 hours. Also, we have a dedicated customer support team available between Monday – Friday (9.30 AM – 6.00 PM) at our toll free number 1800-103-2683 for any questions or assistance. This ensures that entrepreneurs can get the help they need throughout the loan process.
FAQs
1. Who is eligible for MSME registration?
There are three basic factors that make up the primary requirements for Udyam registration. Whether an MSME qualifies for the benefits of Udyam registration depends on the type of business, annual turnover, and investment:
- MSMEs must be micro, small, or medium-sized businesses.
- The benefits change according to the annual turnover of the MSMEs. Micro businesses with an annual turnover of up to 5 crores, small businesses with sales between 5 and 75 crores, and medium businesses with sales up to 250 crores are all eligible for registration and benefits.
- To be eligible for the benefits of Udyam registration, micro-enterprises must not have investments totalling more than Rs. 1 crore. Investments in small and medium-sized businesses cannot exceed 10 crores and 50 crores, respectively.
2. What is the cost of MSME registration?
MSME registration is a cost-free paperless process.
3. How long is MSME registration valid?
MSME registration does not have an expiry date. As long as the organisation is ethical and financially stable the MSME registration is also valid.
4. What is formalization of MSME in India?
Formalization of MSME in India refers to a process by which all informal businesses are brought under a regulatory framework of law. In other words, Through this process MSMEs are made a registered entity where they abide by a certain rule and regulations.
5. Can I register for MSME online?
Yes, MSME registration can be completed online through the Udyam Registration portal.
6. Are MSME registration and Udyog Aadhaar the same?
No, Udyog Aadhaar is the older system, while Udyam Registration is the updated and more streamlined process.
7. Which is better, Udyog or Udyam?
Udyam is better as it offers a fully digital, paperless process with enhanced verification through PAN and GSTIN integration.
