MSME stands for Micro, Small, and Medium Enterprises and is regulated by Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006. The aim is to promote, facilitate and develop the competitiveness of the micro, small and medium enterprises category. Therefore, here is how to apply MSME certificate online.
On 13 May 2020, Central Government redefined MSME by assessing the investments and turnover of the company.
- Micro Units: Companies with Investments up to Rs 1 crore & Turnover below Rs 5 crore.
- Small Units: Companies with Investment of up to Rs 10 crore & Turnover below 50 crores.
- Medium Units: Companies with Investment of up to Rs 50 crore & Turnover below Rs 250 crore.
Steps to apply MSME certificate online
You can get an MSME certificate in two ways:
- By applying directly on UAM (Udyog Aadhaar Memorandum).
- While company registration online, your service provider agency also applies for an MSME certificate complimentary.
To apply MSME certificate online on UAM, follow the below steps:
Step 1 – Visit the Official Website
Visit the Udyog Aadhaar Memorandum (UAM) portal and navigate to the home. You can access several things related to MSME certificates, for example, benefits, circulars and orders, guidelines, important communications, New User Registration.
Step 2 – New User Registration
If you are registering your business as an MSME for the first time, use the Aadhaar Number and Name to log in and click on Validate & Generate OTP. After that, enter the OTP and verify the number.
Step 3 – Fill the Form
After successful verification, you will have to fill in the PAN details. You can select the NO option if you do not have a PAN card yet.
After that, fill in the additional mandatory details, for example, gender, caste, disability status, enterprise name, address, office location, date of commencement of business, previous registration details (if any), number of employees and bank details.
Also, you need to give the basic investment details too.
If you have more than one business, you can register each business for a separate Udyog Aadhar with the same Aadhar Number.
Step 4 – Choose the type of Organization
Further, select the type of organization from the given list of options. You must choose between the two types of MSMEs, either manufacturing or service.
Step 5- Attach the Documents
Documents required for how to apply MSME certificate online:
- Aadhar number
- PAN number
- Address of the business
- Bank account number
- The basic business activity
- NIC 2 digit code
- Investment details
- Turnover details
- Partnership deed
- Sales and purchase bill copies
- Receipt of purchased machinery and copies of licenses.
Step 5 – Enter the One-time Password (OTP)
At the end of the form, an OTP request is sent to your phone again for verification. Enter the OTP code to submit the form successfully.
Step 6 – Sit back and relax!
FirstlyYou will receive a registration number to track your application.
Accordingly, after the application form submits, the registration and approval could take two or three days to complete. After the application gets approved, the registration is successful, and the certificate is sent via email.
Fees to apply MSME certificate online
There is no additional fee to apply for an MSME certificate online.
Validity for MSME certificate
Your MSME Certificate is valid until your business is in operation from the date of issue.
GOVERNMENT SCHEMES for MSME:
- Udyog Aadhaar memorandum scheme- Under this scheme, MSMEs can get convenient loans for MSMEs, credit, and government subsidies.
- Incubation- MSME certificate will help business entities with innovative ideas as the Government of India can finance from 75% to 80% of the project costs of MSMEs registered under this scheme.
- Credit Facility- Having MSME registration benefits MSMEs by providing loans, credit, and government subsidies.
- Credit linked capital subsidy scheme – Registered MSMEs can use funds to renew their old machinery and upgrade their business with new technology. To benefit from this scheme, MSMEs can directly approach banks.
- Export Standard- MSME registration also helps you avail of some rebates and concessions for their exported goods.
- Quality Management and New Technology- seminars and campaigns are conducted for registered MSMEs to enlighten businesses about new technologies available in the market. It encourages healthy competition among different enterprises to ensure better production of goods.
- Women Entrepreneurship- This scheme aims to boost and encourage women who wish to create something or start their own business. Thus, if you register your business entity as the MSME you get benefits like training, counselling, and teaching about delivery techniques by the officials. Especially to the women-run MSMEs.
- Grievance Monitoring System- This scheme aims to control and operate on complaints and suggestions by business and MSME owners.
- Zero defect zero effect or ZED- the scheme helps MSMEs enjoy rebates and concessions for their exported goods.
How can a businessman or firm benefit from MSME Certificate?
Avail of collateral-free loans from banks: The government of India launched the Credit Guarantee Fund Scheme (CGS) for the MSME to avail of collateral-free loans.
Reduces interest rates and access to credit: banks offer loans at low-interest rates to the registered MSME owner and also give priority leading to MSME entities.
Income Tax exemption: Registered MSME is benefited from tax exemption, and also MSME certificate relieves from undergoing audit procedures.
Industrial promotion subsidy: Promotion subsidies are provided to MSME owners.
Avail 50% subsidy on patent registration: You can even get a 50% subsidy from the government while registering the patent of your unique invention.
1% exemption on the interest rate on overdraft:
Protection against delayed payments: The Ministry of MSME protects MSME-Registered businesses against delays in payments from buyers and the right of interest on delayed payment. An enterprise having an MSME registration is automatically protected against delayed payments.
Compensation of ISO certification charges: If your business needs an ISO certificate, the government also gives compensation on the fees.
Concession in electricity bills: The business also gets a concession on electricity bills of the registered office.
Technology support: The Ministry supports technology up-gradation to enhance cost-effectiveness and promote clean energy use.
Subsidy for Barcode registration
Other Benefits of MSME certificate
Once registered as MSME, several rebates and concessions are available. Also, the cost of getting on patent or trademark registration (for the specific category), etc., or the cost of setting up the industry is less. (up to 50% subsidy).
MSME gets easy access to credit. MSME general banking branches are categorized as specialized MSME branches in public sector banks. It is to provide a better service to this sector as a whole.
According to the RBI Master circular, the MSME can be benefited from a composite loan limit of Rs. 1 crore.
The bank loans become cheaper for Businesses registered under MSME. The interest rate goes much lower than interest on regular loans (around 1% to 1.5%).
Businesses registered under MSME s give a higher preference for government license and certification.
MCA has recently introduced MSME forms to ensure that due payments of the MSME registered entities are noted down and paid off within time.
- You can go for company registration in Mumbai, Delhi, Bangalore, Chennai etc. metro cities which can be very beneficial.
It was all about how to apply MSME certificate online and the government and other benefits for business from it.
In fact, when you apply for registering your business, your agent applies for an MSME certificate if you need one without charging any extra fee for it.
And while starting your own business you can also look for auspicious day to start business in 2022 so that you can start your business with pure positive energy and make it successful.