by What is MSME in India?
Micro, Small, and Medium Enterprises (MSMEs) play a crucial role in India’s economy. They contribute significantly to employment, GDP, and exports. The Indian government classifies businesses as MSMEs based on their investment and turnover:
- Micro Enterprise: Investment up to ₹1 crore, turnover up to ₹5 crore.
- Small Enterprise: Investment up to ₹10 crore, turnover up to ₹50 crore.
- Medium Enterprise: Investment up to ₹50 crore, turnover up to ₹250 crore.
Example: Priya runs a homemade candle business with ₹8 lakh investment and ₹30 lakh turnover. Her business qualifies as a *Micro Enterprise.
These businesses benefit from various government schemes, subsidies, and incentives aimed at promoting growth and sustainability.
What is Udyam Registration?
Udyam Registration is a government initiative introduced by the Ministry of Micro, Small & Medium Enterprises to simplify MSME registration. It replaces the old Udyog Aadhaar Memorandum (UAM) and provides businesses with a unique identification number.
Key Benefits of Udyam Registration:
- Access to government subsidies and schemes
- Lower interest rates on loans
- Protection against delayed payments
- Easier access to credit
- Preference in government tenders
- Tax benefits and exemptions
All About Udyam Registration
Udyam Registration is completely online and free of cost. Businesses only need their Aadhaar number to register. Here’s a quick look at the process:
Eligibility for Udyam Registration:
- Any business engaged in manufacturing, production, or service sector
- Sole proprietorships, partnerships, private limited companies, or any other legal entity
Documents/Information Required for Udyam Registration:
- Aadhaar number of the business owner
- PAN Card
- GSTIN (if applicable)
Compliance Requirements for MSMEs
After registering under Udyam, businesses must comply with various regulations:
- Annual Udyam Registration Update: Businesses must update their details annually.
- GST and Income Tax Filings: MSMEs must file their GST and income tax returns timely.
- Financial Statement Maintenance: Proper bookkeeping and financial record-keeping are essential.
- Statutory Compliance: MSMEs should adhere to labor laws, environmental laws, and sector-specific regulations.
- Filing under MSME Act: If payments are delayed beyond 45 days, MSMEs can file complaints under the MSME Samadhan Portal.
- Form MSME-1 Filing: Businesses must file Form MSME-1 if they have outstanding payments to MSME vendors beyond 45 days.
Form MSME-1: Who Needs to File, Due Date, and How to File
Who Needs to File Form MSME-1?
- Every company (private or public) that has outstanding payments to MSMEs beyond 45 days must file this form.
- Companies that have received supplies from MSMEs but have not cleared the payments within the stipulated time.
- Who Files It?: Buyers registered under Companies Act 2013.
- Example: If a furniture manufacturer delays paying a micro-enterprise for raw materials, they must report this in Form MSME-1.
Due Date for Filing Form MSME-1
- Half-Yearly Filing:
- April to September: Due by 31st October
- October to March: Due by 30th April
How to File Form MSME-1?
- Login to MCA Portal: Go to the Ministry of Corporate Affairs (MCA) website.
- Download the MSME-1 Form: Access the form under the e-filing section.
- Fill in Required Details:
- CIN (Corporate Identification Number)
- Outstanding amount details
- Supplier details (MSME Name, PAN, etc.)
- Date of acceptance of goods/services
- Reason for delay in payment
- Attach Digital Signature: The form must be digitally signed by an authorized signatory.
- Submit Form MSME-1: Upload the completed form to the MCA portal.
- Generate SRN: On submission, a Service Request Number (SRN) is generated for tracking the status.
How to Register Your Business in Udyam?
Follow these simple steps to register your business under Udyam:
Step-by-Step Guide:
- Visit the Udyam Registration Portal: https://udyamregistration.gov.in
- Enter Aadhaar Number: Use the business owner’s Aadhaar number.
- Verify OTP: An OTP is sent to the registered mobile number.
- Fill Business Details: Provide PAN, business name, and other necessary details.
- Select Business Type: Choose micro, small, or medium enterprise as per eligibility.
- Provide Bank Details: Enter your business bank account details.
- Submit and Receive Udyam Certificate: After submission, you will receive a unique Udyam Registration Number.
Example of Udyam Registration
Let’s consider ABC Handicrafts, a small business selling handmade wooden furniture.
- Investment: ₹8 crore
- Turnover: ₹45 crore
Since the business meets the small enterprise criteria, it registers under Udyam. After registration, ABC Handicrafts enjoys benefits like lower interest loans, priority in government tenders, and faster payment processing from large buyers.
Conclusion
MSMEs are the backbone of India’s economy, and Udyam Registration simplifies their legal recognition and access to benefits. By registering under Udyam, businesses can avail of financial assistance, tax exemptions, and legal protections. The process is simple, free, and essential for business growth.
FAQs
1. Is Udyam Registration mandatory for MSMEs?
No, but it is highly recommended to avail benefits and legal protections.
2. Can I register my business under Udyam without a GST number?
Yes, but if your business is eligible for GST, you should obtain one.
3. How long does it take to get the Udyam certificate?
Usually, the certificate is generated instantly upon successful registration.
4. Can I edit my Udyam registration details later?
Yes, you can update details annually through the portal.
5. What if my business grows beyond the MSME criteria?
Your registration will be updated, and you may no longer qualify for MSME benefits.
6. What happens if I fail to file Form MSME-1?
Non-filing of Form MSME-1 can attract penalties under the Companies Act, 2013.
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