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Micro, Small and Medium Enterprises, which are known as MSMEs are defined as small establishments and industries that are categorized on the basis of the sector. The most crucial aspect in the MSME establishment is registering MSME. MSME Registration is crucial and must be obtained by individuals that want to start any small business.

What is the classification of Micro, Small and Medium Enterprises?

MSMEs are divided into categories based on two sectors on the basis of which the classification of MSMEs is done - manufacturing/production sector and service sector.

Criteria: Investment in Plant and Machinery Equipment

Category	Manufacturing / Production Sector	Services Sector
Micro Enterprises	If the amount of investment is less than Rs 25 lakhs, it is considered as a micro enterprise	If the investment is less than Rs 10 lakhs
Small Enterprises	If the Investment amount is above Rs 25 lakhs and less than Rs 5 crores	If the investment is less than Rs 10 lakhs
Medium Enterprises	If the Investment amount is above Rs 5 crores and less than Rs 10 crores	If the investment is less than Rs 5 crores

Criteria: Investment and Annual Turnover

Category	Manufacturing / Service Sector
Micro Enterprises	If the Investment amount is less than Rs 1 crores If the turnover is less than Rs 5 crores
Small Enterprises	If the investment amount is less than Rs 1 crores If the turnover is less than Rs 5 crores
Medium Enterprises	If the amount of Investment is less than Rs 20 crores If the turnover is less than Rs 100 crores

What are the benefits of MSME Registration in India?

MSMEs are major contributors and benefit the country in several ways. They, too, enjoy many benefits once they register as per the rules and regulations specified by the Government.

Certain benefits that the MSMEs enjoy after MSME registration are as follows:

• They are eligible to receive loans without any collaterals
• They receive subsidy on Patent Registration and Industrial Promotion
• Thy have an overdraft facility which includes an exemption on the Interest Rate
• They receive a concession on Electricity
• They have certain regarding protection against delayed payments
• ISO Certification Charges Reimbursement

What are the eligibility requirements for MSME Registration?

It is crucial to be able to fulfill the criteria in order to be considered eligible for filing an application for registering:

• Any individual who is a part of a Hindu Undivided family
• Any individual who has a limited liability partnership
• Any individual who owns a partnership firm having another party
• Any individual who is a sole proprietor
• Any individual who is owns a One Person Company
• Any individual who owns a production company
• Any individual who own a cooperative societies

What is the registration process to obtain MSME Registration?

The registration process of Micro, Small and Medium Enterprises (MSME) contains certain steps that must be followed by individuals before the incorporation of MSME. The MSME Registration process is simple and involves a few steps, after completing all the steps the individual obtain MSME License after he can start the business.

• The first step in the registration process is to file an application form with the concerned authority or department of the Government
• Provide specific details about the industry and submit all the necessary documents within the stipulated time period
• The applicant must submit his Aadhar card number as an identity proof
• Crucial details of the applicant such as name, gender, PAN number, email ID and mobile number.
• The applicant must submit details of the enterprise which includes details such as the name, PAN number of the company, location of the plant where the production will take place, date of the commencement of business, number of employees 
• A bank Account Number and IFS Code is a crucial requirement
• They must mention the primary business activity of the enterprise
• The applicant must provide a 2 Digit NIC Code to the concerned authority
• They must specify the amount that will be invested in Plant and Machinery and Equipment

What documents are required for MSME Registration?

Documents are an important part of the MSME registration process. All the documents must be submitted to the concerned authority within the stipulated duration by the applicant.

Below mentioned are some documents that must be submitted by the applicant:

• Verified copy of Aadhar card of the applicant
• NIC code of the employees
• Total number of employees who will be a part of the company
• Primary business activity of the business
• Address proof of the registered office
• Proof of ownership of the place
• Copy of purchase bill of all the raw materials that will be used in the production of the products
• A copy of partnership deed if it is a partnership firm
• Copy of Memorandum of Association (MOA), Articles of Association (AOA) and Certificate of Incorporation (COI)
• Bank account statement

What schemes are launched by the Government under Micro, Small and Medium Enterprises (MSMEs)?

• Udyog Aadhaar memorandum
• Zero Defect Zero Effect
• Quality Management Standards & Quality technology Tools
• Grievance Monitoring System
• Incubation
• Credit Linked Capital Subsidy Scheme
• Women Entrepreneurship

Conclusion

MSMEs have played a key role in the Indian economy and contributed immensely. If MSMEs continue to contribute in the country, the country’s economy will increase which will eventually have a positive impact on the country. The Government must ensure that they are not deprived of any benefits, which includes MSME Registration. They must ensure that the MSMEs receive benefits with regards to proper registration. The Government must also ensure all the requirements of the enterprises are fulfilled and the enterprises run in an effective manner. In spite of setting up different schemes, acts, rules, it is mandatory for the Ministry of MSME to ensure that the schemes and rules are followed in a consistent manner.

This Article has been contributed by Mahiya Ahmed who is a content writer. She have recently joined SwaritAdvisors. SwaritAdvisors is a legal & financial services provider with experts help such us- Register an NBFC, Online Nidhi Company Registration, FSSAI Registration in India, Section 8 Company Registration, Online LLP Registration, Online NGO Registration, Online GST Registration in India, etc.