Why Do We Need MSME Registration?


The government of India by various schemes, subsidies and incentives try to promote MSME through MSMED act. To get the benefits that come under this act from the central and the state government or the banking sector, MSME Registration is required to be done. The MSME Registration, however, has its own criteria for being eligible for its registration.

Definitions of Micro, Small & Medium Enterprises In accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified in two Classes:

1. Manufacturing Enterprises-he enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the first schedule to the industries (Development and regulation) Act, 1951) or employing plant and machinery in the process of value addition to the final product having a distinct name or character or use. The Manufacturing Enterprise are defined in terms of investment in Plant & Machinery.

2. Service Enterprises:-The enterprises engaged in providing or rendering of services and are defined in terms of investment in equipment.


Before Notification SSI registration

Sr. No.
Type of Enterprise
Manufacturing Enterprises
(Investment in Plant and Machinery)
Service Industry
(Investment in equipment)
Does not exceed Rs.25 Lakh
Does not exceed Rs. 10 Lakh
Exceeds Rs. 25 Lakh but does not exceed Rs. 5 Crore
Exceeds Rs. 10 Lakh but does not exceed Rs. 2 Crore
Exceeds Rs. 5 Crore but does not exceed Rs. 10 Crore
Exceeds Rs. 2 Crore but does not exceed Rs. 5 Crore

As, amendment of section 7 of the MSMED Act, 2006, will be proposed in the Amendment Bill to be placed on the table of the Parliament
Sr. No.
Type of Enterprise
Manufacturing Enterprises
(Annual Turnover)
Does not exceed Rs.5 Crore
Exceeds Rs. 5 Crore but does not exceed Rs. 75 Crore
Exceeds Rs. 75 Crore but does not exceed Rs. 250 Crore


MSME Registration Eligibility?

You can apply for MSME registration if you fulfill one or multiples of the following criteria or are associated with the following, such as if:-

You are a sole proprietor (exclusive owner of a business)
You belong to or are part of Hindu Undivided Family.
You work as or have a partnership firm with another party in an association.
You are just a one person company
You have a limited liability partnership
You have a private limited company
You have a production company that produces materials.
You work in an association with other persons.
You have co-operative societies
Or any other than the undertaking of the above list.
Documents Required for MSME Registration Process
Following documents are requiring for msme registration.
Pan Card of the proprietor/ all the partners/all the directors
Aadhar Card of the proprietor/all the partners/all the directors
Proof of ownership of premises such as allotment letter/possession letter/lease agreement/property tax receipt.
If rented premises Rent agreement and NOC from landlord along with supporting by the landlord ownership.
Copy of sale bill of each end product
Copy of purchase bill of each raw material purchased
Partnership Deed
Copy of Memorandum and Articles of association in case of Private Limited Company along with Board’s Resolution authorizing the director to sign the application
Copy of Industrial License as obtained under Industrial Development and Regulation Act,1951
An affidavit of Rs. 10/-non judicial stamp paper duly attested by Notary Public affixed providing the status of machinery installed, power requirement etc.
Purchase bill of machinery installed
Bank Account Statement

What are the Benefits of MSME Registration?

The micro and medium enterprises in the manufacturing sector and service sector can obtain MSME Registration. Though the MSME Registration is not exactly statutory yet it is quite beneficial for certain businesses as it provides with a range of several benefits like:-

The lower rates of interest.
Tax subsidies.
Excise duty exemption schemes.
The power subsidy tariffs
Also capital investments subsidy etc and other supports.
It will give collateral free loans from the banks.
There are reservation policies for the manufacturing sector and production sector.
You will easily get approval for the registration and license.
You get special consideration for the international trade fairs
You become eligible for IPS subsidy
You can get reimbursement of ISO certification.