MSME (Micro, Small and Medium Enterprises) is a classification of business enterprises based on their investment in plant and machinery/equipment and annual turnover. MSMEs are governed by the MSME Development Act, 2006.
MSME Classification (Revised 2020)
| Category | Investment | Turnover |
|---|---|---|
| Micro | Up to Rs. 1 crore | Up to Rs. 5 crores |
| Small | Up to Rs. 10 crores | Up to Rs. 50 crores |
| Medium | Up to Rs. 50 crores | Up to Rs. 250 crores |
Note: Both criteria must be satisfied. Investment excludes land and building.
Udyam Registration
Udyam Registration is the online registration process for MSMEs on the Udyam portal (udyamregistration.gov.in). It replaced the earlier Udyog Aadhaar.
Benefits of MSME Registration
- Credit: Priority sector lending, collateral-free loans up to Rs. 1 crore
- Subsidies: Capital subsidy, technology upgradation support
- Tax Benefits: Reduced tax rates, exemptions
- Government Tenders: Preference in government procurement
- Delayed Payment Protection: Buyer must pay within 45 days
- Lower Electricity Bills: Subsidized rates in some states
- ISO Certification: Reimbursement of ISO certification cost
- Credit Guarantee: CGTMSE scheme coverage
Documents for Registration
- Aadhaar number of proprietor/partners/directors
- PAN of enterprise
- Bank account details
- No fees required
Validity
Udyam Registration has lifetime validity and does not require renewal.
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