MSME Certification: A Step-by-Step Guide

The MSME Certificate is a document that acknowledges a business as a Micro, Small, or Medium Enterprise. The MSME Certificate, also known as the Udyam Registration Certificate or Udyam Aadhar, is issued under the provisions of the Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006, which was enacted by the Ministry of Micro, Small, and Medium Enterprises in India. The MSMED Act aims to promote, facilitate, and develop the competitiveness of micro, small, and medium enterprises in the country. It provides a legal framework for recognizing and supporting these enterprises in the competitive market.

Under the MSMED Act, businesses are classified based on their investment in plant and machinery, and annual revenue generated. Any business, start-up, proprietary, corporation, cooperative society, self-help group, or trust with less than Rs. 50 crore investment and Rs. 250 crore annual revenue can be classified as an MSME. The distinction between micro, small, and medium enterprises can be ascertained based on the following parameters-

• Micro Enterprise: Investment of up to Rs. 1 crore and an annual turnover of up to Rs. 5 crores
• Small Enterprise: Investment of up to Rs. 10 crores and an annual turnover of up to Rs. 50 crores
• Medium Enterprise: Investment of up to Rs. 50 crores and an annual turnover of up to Rs. 250 crores

To obtain an MSME Certificate or Udyam Aadhar, businesses can simply apply online on the Udyog Registration Portal along with relevant proof of documents. Once the application is reviewed and approved, the digital certificate is issued.

List of Documents Required

• Pan card
• Aadhaar Card
• GST Identification Number

How to apply for an MSME Certificate or Udyam Aadhar?

• Udyam Registration: Visit the only official website www.udyamregistration.gov.in to start your registration process.
• Aadhar Card: Enter your name and Aadhar Card number to validate and generate OTP.
• Personal and Enterprise Details: Enter the required details about your business, including the company’s name, address, GST number, the type of enterprise (proprietorship, partnership, or private limited company), date of registration, etc.
• Additional Information: Provide your bank account details, business activities, investment in plant, machinery, or equipment, and the number of employees,.
• Submit Application: Carefully review the provided information and submit the application form.
• Udyam Aadhar: Once the application is processed and verified, an e-Certificate with Udyam Registration Number (URN) is issued within 3-5 days.

What are the benefits of an MSME Certificate or Udyam Aadhar?

Having an MSME Certificate or Udyam Aadhar can bring several benefits to businesses, including easier access to credit, subsidies, tax incentives, preferential treatment in government tenders, and assistance for technological upgradation and skill development. Here is a detailed list of benefits you can avail by getting your business MSME certified-

1. Access to government schemes and incentives: With MSME certification, a business can avail of financial assistance, subsidies, and tax incentives offered by the government.

2. Credit facilities and loans: MSME registration facilitates easier access to credit facilities and loans from financial institutions, including priority sector lending. An MSME-certified business can get easy access to funds, like business loans, for growth and expansion.

3. Protection against delayed payments: Under the MSME Development Act, businesses registered as MSMEs are entitled to prompt payment of dues for goods or services rendered, making it easier to secure timely payments.

4. Preference in government tenders: MSMEs are given preference in government procurement, with certain quotas reserved in specific categories. This enables small businesses to foster their growth by entering into business with government bodies.

5. Technology and skill development support: MSMEs can receive assistance and guidance for adopting modern technologies and enhancing their skill sets allowing them to learn and apply new skills for the betterment of the business.

The Government of India supplements the efforts of MSMEs through various initiatives to assist them and encourage entrepreneurship, employment, and livelihood opportunities in India.

To recognize the potential of such small businesses and their impact on the economy, Godrej also recently launched Nirmaan, which facilitates a well-rounded business solution offering that goes beyond the scope of financing and helps MSMEs with business expansion, managing operations, and upskilling. To further help MSMEs make a difference, Godrej’s flexible business loans also act as a reliable financing solution with features such as design your EMI, zero collateral, quick approvals, and exciting rewards on timely repayments.

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