MSME is expanded to read Micro, Small and Medium Enterprises. As a means to support, endorse and uplift these Small and Medium scale businesses or industries, the Government of India launched the MSMED Act and also set up a separate Ministry for MSME.
This Act majorly accomplished a few important goals. Firstly, it clearly segregated the Micro, Small, and Medium businesses through their investment capital. For example, an industry that has an investment of up to Rs.25 lakhs is defined as a Micro industry under the manufacturing sector. An industry that has an investment of Rs.25 Lakhs up to 5 crores is termed as a Small industry under the Manufacturing sector and so on.
The MSME Act, also established funds which can be used for promotions and for the Government acquisitions of products and services which come under the MSME regime.
But how did Udyog Aadhar replace MSME Registration?
When MSME was first introduced, the registration for the Micro, Small, Medium businesses was intense and complex. Therefore, the Government decided to make it simple and easy. This led to the launch of the Udyog Aadhar Act in the year 2015. The Udyog Aadhaar Act completely replaced the old MSME Registration as it is done completely online. Therefore, when an entrepreneur needs a Udyog Aadhaar registration, he or she simply needs to go online and fill out a one-page application solely with the help of the Aadhaar card as the only legal document.
The below are the schemes of MSME supported by the Udyog Aadhaar:
- Zero Defect Zero Effect
- Udyog Aadhaar Memorandum
- A System For Monitoring The Grievances
- Quality Management Standards and Quality Technology Tools
Types of MSME Registration
● Provisional MSME Registration
A Provisional MSME registration is one of the first phases of applying as an MSME for an entity. This is ideally given before the formation of the enterprise or the pre-investment era. So acquiring the Provisional MSME certificate can give an entity the following advantages,
- Procuring amenities for supplies, equipment, accommodation, land, etc.
- Procuring other vital No Objection Certificates and authorisations
- Procuring permissions and consent
from regulatory authorities
such as the Labour Regulations and the Pollution Control Board
Additionally, the Provisional SSI Registration Certificate (PRC) also makes small & medium industries eligible for term investments or loans. Under the priority sector lending, MSMEs can also procure working capital from banks and other financial and investment establishments.
● Permanent MSME Registration
The next category of MSME registration is called the permanent MSME registration. This is issued to MSMEs and entities that are already operational. The permanent MSME registration is not obligatory. However, entities that have this certification typically find it easier to garner the aid and support of the Indian Government.
MSME Registration Document Checklist
These are the documents you need to have in order to register as an MSME through the Udyog Aadhaar Registration.
- Address proof of your Business
- Sale bill and purchase bill photocopies
- Memorandum of Association and Articles of Association along with the Partnership Deed.
- Photocopies of bills of machinery bought.
- An industry license is required to apply for the Provisional Registration Certificate. Therefore, every enterprise should have an industrial license except firms that have an exemption under the Schedule -III of the Industrial Licensing Exemption Notification.
- There should be full administrative clearance for the registration and document procedure. Hence, there should be a No Objection Certificate from the pollution board to confirm that restrictions are not being violated.
