India’s economy relies significantly on small and medium-sized enterprises (MSMEs). MSME Registration for Private Limited Company empower them and contribute to social justice by creating job opportunities. The contribution of MSME Register Company to India’s economic growth is outlined in the Micro, Small, and Medium Enterprises Development Act 2006.
These businesses are essential for the manufacturing sector as they supply a diverse range of products, materials, and components to larger industries. According to the Ministry of MSMEs’ report titled “MSME at a Glance,” India is home to 36 million MSME units, employing more than 80 million people. These units manufacture over 6,000 products, making up 8% of the country’s GDP, 45% of the total manufacturing output, and 40% of the exports. The impact of MSMEs on the economy is substantial, underscoring the need to continue supporting and promoting these enterprises in the future.
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What Does MSME Classification Entail?
When MSME registration was first introduced in 2006, the government used investment in plant, machinery, or equipment as the main factor for classifying MSMEs. Later on, they updated the classification by adding annual investment and annual turnover criteria. They also removed the distinction between manufacturing and service sectors in the MSME definition.
Now, the eligibility criteria for MSME Registration for Private Limited Company follow this revised MSME classification, taking into account both investment and annual turnover to decide if an entity qualifies as an MSME Register Company.
|Revised MSME Classification|
|Investment & Annual Turnover||< Rs.1 cr & < Rs.5 cr||< Rs.10 cr & < Rs.50 cr||< Rs.50 cr & < Rs.250 cr|
To get MSME Registration for Private Limited Company, companies must satisfy the specified investment and turnover limits assigned to their particular categories.
What Information Is Required for Application of MSME Registration for Company?
To apply for MSME Registration for Company, you’ll need to provide the following information:
- Your name or the entity’s name as it appears on your Aadhar card.
- Social category (general, OBC, SC/ST).
- Physical disability status.
- Organization’s name and type.
- PAN Cards for both individuals and entities.
- Plant location.
- Country, State, District, City, Tehsil, PIN Code, and proof of office address.
- Your phone number and email address.
- Date of establishment of the entity.
- Bank account number and IFSC code.
- Business activity of the entity.
- 2-digit NIC code based on the primary activity.
- Any other relevant information about the entity.
- Number of employees.
- Investment in plant and machinery.
Documents required for Company MSME Registration
To successfully complete your Company MSME Registration, you need to provide certain documents in addition to the information mentioned earlier. These include:
- A valid photo ID and address proof for the applicant.
- A recent passport-size photograph of the applicant.
- The applicant’s Aadhar Card.
- Relevant documents related to the business.
- Proof of the working premises, such as a sale deed for property owners or a rent agreement and a no-objection letter from the property owner for renters.
- Documents pertaining to your bank accounts.
- Partnership firms must submit a Partnership Deed.
- Companies need to provide the PAN card, MOA (Memorandum of Association), AOA (Articles of Association), and Certificate of Incorporation.
- For enterprises requiring GST registration, it’s mandatory to provide the GSTIN when obtaining MSME Registration or Udyam Registration.
How to Get MSME Registration for Private Limited Company?
To access government benefits for MSME Register Company, you need to get MSME Registration for Private Limited Company by registering on the ‘Udyog Aadhar Memorandum (UAM) portal.’ The good news is that it’s a simple and free process. There are two categories for online MSME Company Registration:
For new entrepreneurs or those with EM-II:
- Choose “For New Entrepreneurs who are not Registered yet as MSME or those with EM-II” on the Udyam Registration Portal’s homepage.
- Enter your Aadhaar number and name, then click “Validate and Generate OTP” to receive and enter the OTP.
- On the PAN Verification page, specify the “Type of Organisation” and provide the PAN number, then click “Validate PAN” for verification.
- After successful PAN verification, fill in your personal and enterprise details on the Udyam Registration form.
- Share your investment and turnover details, make the necessary declaration, and click “Submit and Get Final OTP.”
- Enter the final OTP, submit the form, and receive the Udyam Registration Certificate via email.
- Track your MSME Certificate for Private Limited Company status on the Udyam Registration Portal.
For those with existing UAM registration:
- On the portal’s homepage, click on “For those having registration as UAM” or “For those already having registration as UAM through Assisted filing.”
- Enter your Udyog Aadhar for Private Limited Company and select the preferred OTP option (sent to your mobile or email).
- Click “Validate and Generate OTP” and enter the OTP.
- Fill in the required registration details on the MSME Company Registration form.
- Once you’ve completed the form submission, Process for Company Registration in MSME will be finalized.
Advantages of MSME Registration for Private Limited Company
Getting MSME Registration for Private Limited Company has a range of advantages:
- Lower Interest Rates: In India, MSME Registration for Company allows you to access bank loans with significantly lower interest rates, typically around 1-1.5%, making it a more economical option compared to regular loans.
- Extended Tax Benefits: You can carry forward the credit for minimum alternate tax (MAT) for up to 15 years, as opposed to the previous limit of 10 years.
- Cost Savings: Post-registration, the costs associated with activities like obtaining a patent or establishing your business decrease because you become eligible for various discounts and incentives.
- Easier Access to Government Tenders: MSME Company Registration simplifies the process of securing government tenders, thanks to the integration of the Udyam Registration Portal with Government e-Marketplace and State Government portals.
- Settling Unpaid Dues: Company MSME Registration have the option of a one-time settlement fee for outstanding payments.
- Government Scheme Benefits: You can avail yourself of various government schemes such as the Credit Guarantee Scheme, Credit Linked Capital Subsidy Scheme, Public Procurement Policy, and protection against delayed payments.
- Priority Sector Lending: Banks offer priority sector lending to MSMEs.
- Waiver on Security Deposits: Company with MSME Registration can enjoy a waiver on government security deposits, which proves beneficial when participating in e-tenders.
- Diverse Business Activities: A single MSME Company Registration can encompass various activities, whether they involve services, manufacturing, or both.
- Additional Perks: These include subsidies for barcode registration, exemptions from direct taxes, reimbursement of ISO certification fees, concessions on electricity bills, and special considerations at international trade fairs
Who is Eligible for MSME Registration?
Udyam Registration is available for a variety of entities that meet the updated MSME classification criteria, which are determined by their annual turnover and investment.
Entities eligible for MSME registration comprise individuals, startups, business owners, entrepreneurs, private limited company, public limited companies, sole proprietorships, partnership firms, Limited Liability Partnerships (LLPs), Self Help Groups (SHGs), co-operative societies, and trusts.
Types of MSME Loan Options
Let’s explore various loan choices for private businesses that have completed MSME Registration for Private Limited Company:
- Merchant Cash Advance: This loan provides a quick lump sum, and you repay based on daily sales through point-of-sale terminals. Ideal if your products or services are swiftly paid through these terminals.
- Invoice Financing: To manage cash flow, access capital against outstanding invoices. After invoice clearance, the lending organization deducts a percentage covering fees, principal, and accrued interest. Eligibility requires over a year of business operation, a turnover exceeding Rs 24 lakhs, and valid invoices of at least Rs 1 lakh with a reputable corporate entity.
- Working Capital Loans: Bridging the gap between delivering and paying for products, these loans offer favorable terms with a 1-2 year repayment. No collateral needed if your business has operated for at least a year, with an annual turnover exceeding Rs 24 lakhs. Required documentation includes a certificate of business incorporation, KYC documents, and a six-month bank statement.
- Line of Credit: Access a pool of funds for day-to-day expenses. Pay interest only when utilizing the loan, with lower rates and a revolving credit line. Hassle-free and collateral-free, you can avail loans from Rs 50,000 to Rs 1 crore, with a one-year repayment tenure.
Government’s Role in MSME Company Registration
The Indian government is actively supporting MSMEs by embracing digitization and streamlining business procedures to expedite capital-raising processes and foster more entrepreneurs, all without any MSME fees. Check out these programs that can be beneficial if you’ve completed Company Registration in MSME:
- Credit Linked Capital Subsidy Scheme: Get subsidies to upgrade your systems and boost business efficiency.
- SIDBI Make In India Loan For Enterprises (SMILE): Grow your business with loans featuring an 8% interest rate and a repayment period of up to 120 months.
- PM MUDRA Yojana: Secure funding at competitive interest rates and flexible repayment terms for borrowing needs under Rs 10 lakh.
- Grievance Monitoring System: Easily file and track complaints with the assurance of swift resolutions.
- Technology and Quality Upgradation Scheme: Upgrade to energy-efficient technologies in your manufacturing units, reducing production costs and contributing to environmental sustainability.
- Incubation: Receive financial support for implementing innovative ideas, designs, and products.