MSME Registration - All about Micro, Small & Medium Enterprise

According to the Indian Government, MSME stands for Micro, Small, and Medium Enterprises. These are small businesses that are grouped into two types:

• Manufacturing Businesses - the ones that make or produce things
• Service Businesses - the ones that offer services (like repair, IT, or consulting)

Earlier, MSME registration had a different process. But on 26th June 2020, the government introduced a new and easier way to register called Udyam Registration. It helps small businesses get official recognition and enjoy various benefits.

Definition of MSME

Old Definition

Service Sector

Enterprise	Investment in Equipment
Micro Enterprise	< or=Rs. 10 lakh
Small Enterprise	> Rs. 10 lakh, < Rs. 2 crore
Medium Enterprise	> Rs. 2 crore, < Rs. 5 crore

Revised Definition

Enterprise	Investment in plant and machinery or equipment	Turnover
Micro enterprise	Up to ₹2.5 crore	Up to ₹10 crore
Small Enterprise	Up to ₹25 crore​	Up to ₹100 crore
Medium Enterprise	Up to ₹125 crore	Up to ₹500 crore

The MSME sector contributes to over 40% of the total industrial employment in India and accounts for around 50% of the country’s exports. It also represents more than 90% of all industrial units in India and produces over 6,000 different types of products. As MSMEs grow, they help boost the overall economy of the country. These industries are commonly referred to as small-scale industries.

Classification of MSME - Micro, Small & Medium Enterprise

Over the last few years, MSMEs (Micro, Small, and Medium Enterprises) have become a very active and important part of the Indian economy. They played a big role in helping the country during the 2008 recession and continue to support the economy today

MSMEs are divided into two main types:

Manufacturing Enterprises – These are businesses that make or produce goods. They use machines or equipment to turn raw materials into finished products that have a specific name, use, or purpose.

Service Enterprises – These are businesses that provide services instead of making products. They were earlier defined based on how much was invested in equipment.

In 2018, the government, under the leadership of Prime Minister Shri Narendra Modi, changed the definition of MSMEs to make it more updated and business-friendly.

The updated MSME definition, shared in the Union Budget 2025, now classifies businesses based on both their investment in machines/equipment and their yearly turnover.

Benefits of MSME Registration

When a business registers under the MSME Act, it gets several benefits related to starting the business, tax savings, easier loans, and government support. Here are some of the key advantages:

1. Cheaper Bank Loans – MSMEs get loans at low interest rates, around 1% to 1.5%, which is much less than normal business loans.
2. Tax Benefits – Registered MSMEs get various tax rebates that help save money.
3. Longer Tax Credit Period – MSMEs can carry forward Minimum Alternate Tax (MAT) credit for up to 15 years instead of 10.
4. Access to Government Tenders – Many government tenders are reserved only for MSMEs, giving them better business opportunities.
5. Easy Credit Access – MSMEs can get loans and credit more easily from banks and financial institutions
6. Rebates on Patents and Setup Costs – After registration or applying for a patent, businesses get rebates and concessions to reduce setup expenses.
7. Priority in Government Approvals – MSMEs get top priority when applying for government licenses or certificates.
8. One-Time Settlement for Unpaid Fees – MSMEs can benefit from one-time settlement schemes to clear unpaid dues at a reduced amount.

Registering as an MSME is a smart move for small businesses looking to grow with government support.

Documents Needed for MSME (Udyam) Registration

To complete the MSME (Udyam) registration, you need to submit some basic documents like ID proof, sales and purchase bills, a business license, and so on. Here's a quick look at each:

Aadhaar Card

• For a proprietorship, it should be in the name of the owner.
• For a partnership firm, it should be the managing partner.
• For a company or LLP, it should be of the authorized director or signatory.
• For a Hindu Undivided Family (HUF), it should be in the name of the "Karta" (head of the family).

PAN and GSTIN

Businesses must provide their PAN and GSTIN, along with the Aadhaar of the authorized person (owner or director).

PAN (Self-Declaration)

If your business was registered earlier but didn’t have a PAN at that time, you can fill in the missing information using self-declaration.

MSMEs launched by the Indian Government

The MSME sector started working on 2nd October 2006. It was launched to support, grow, and improve micro, small, and medium businesses in India.

To help these businesses, the government offers several facilities:

• Udyam Registration - Easy way to register your business
• Quality Standards and Tools - To improve product quality
• Incubation - Support for new and innovative business ideas
• Zero Defect Zero Effect (ZED) - Focus on making quality products without harming the environment
• Grievance Monitoring System - To solve problems and complaints quickly
• Women Entrepreneurship - Special support for women who want to start businesses

MSME's Contribution to the Indian Economy

MSMEs are small businesses based on the size of their investment. They play a big role in India’s economy. Here's how:

• There are over 35 million MSME units involved in making products.
• MSMEs provide jobs to more than 120 million people across the country.
• They contribute around 24% to India’s GDP through services and 6% through manufacturing.

Quick and Easy MSME Registration Process

Step 1: Go to the official MSME Registration Website

Step 2: Fill in all the required details in the registration form

Step 3: Make the online payment for your application

Step 4: A registration executive will process your application

Step 5: Within 1–2 working days, you will get your MSME/Udyam certificate on your registered email address

About msmeregistrar.org

We help new and existing businesses with the MSME Registration process. As one of the most experienced online business service consultants, our goal is to make registration and certification simple, fast, and affordable.

We focus on supporting Indian entrepreneurs in starting and growing their businesses by helping them meet all legal, regulatory, and government benefit requirements.

To get your business or service company MSME certified, just fill out the MSME Registration Form on our website. We offer:

• Quick and hassle-free service
• Competitive Pricing
• Lifetime valid certificates
• Free Consultation

Still, have questions or need help? Fill out the enquiry form, and one of our experts will contact you by email.

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