The Micro, Small and Medium Enterprises (MSME) sector has emerged as a highly vibrant and dynamic sector in the Indian economy and is the backbone of the country. Obtaining the MSME registration certificate is not mandatory and is at the sole discretion of the enterprises. Eligibility for MSME registration for enterprises depending upon their scale of business which are defined as per their classification. Therefore MSME’s are classified into two categories:
Manufacturing Enterprises and Service Enterprises.
Manufacturing sector represents enterprises engaged in manufacturing and production of products i.e. goods.
The eligibility criteria as defined by the MSMED Act for obtaining MSME Registration Certificate is as per investment in plant and machinery used in manufacturing the product:
- Micro Enterprises: Investment on plant and machinery or equipment does not exceed INR 25 Lakh
- Small Enterprises: Investment on plant and machinery or equipment is less than INR 5 Crore, but more than 25 Lakh rupees. Micro Enterprises: Investment on plant and machinery or equipment does not exceed INR 25 Lakh
- Medium Enterprises: Investment on plant and machinery or equipment is less than INR 10 Crore but more than INR 5 Crore.
Read Other Blog: WHAT IS MSME REGISTRATION FEES & PROCESS?
2. Services: The service sector represents enterprises engaged in providing services.
The eligibility criteria as defined by the MSMED Act for obtaining MSME registration certificate is as per investment in equipment used in providing services:
- Micro Enterprises: Investment on equipment is less than INR 10 Lakh
- Small Enterprises: Investment on equipment is less than INR 2 Crore but more than INR 10 Lakh.
- Medium Enterprises: Investment on equipment is less than 5 Crore, but more than 2 Crore.
3. Who can apply for MSME Registration Online?
- Sole Proprietorship: It’s the simplest form of business where the owner and the business are considered as the same. The registration available for sole proprietorships are GST registration and MSME registration online. No separate tax return is required to be filed for sole proprietorships as no separate PAN card is required for the proprietorship’s.
- Partnership: Partnership’s require two or more people who agree to enter into a lawful business which they start together by registering the partnership deed wherein the roles, duties, liabilities, procedures, profit and loss ratio are predefined.
- Company: Company Incorporation is the most popular form of business structure. Minimum two individuals are required to form a company both can be director and shareholder. Company registration is done with the Ministry of corporate affairs. It enjoys the status of a separate legal entity providing limited liability to its shareholders and is the most recommended business structure.
- Limited Liability Partnership: We can say it’s a combination of benefits derived from partnership and company form of business. Unlike partnership registration LLP registration is mandatory. It’s a newer concept wherein all the partners have limited liability.
4. Documents required for the MSME Registration Online are as follows:
- PAN Card of Proprietor/ Partnership/ Company/ LLP
- Aadhar Card of Proprietor/ Partner/Director/ designated partner
- Office Address Proof i.e. Electricity Bill/ Telephone Bill
- Business Name and Object
- Investment (In Lakhs)
- No. of Employees
- Bank Details (Account no., IFSC)
- Email id and Mobile No.
- Registration Document (if applicable) i.e. GST certificate/ Partnership Deed/ 10) Company Incorporation Certificate/ LLP deed