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MSME Registration online in India – Fees, process, documents & Benefits

MSME Registration online in India

The term “MSME” stands for Micro, Small and Medium Enterprises. These are the sizes of enterprises classified as Micro, Small and Medium Enterprises under Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 as per the investments made in them MSME Registration Online in India also known as Udyog Aadhaar registration.

The enterprises falling under these categories and registered under the MSME Act enjoy various benefits. A few benefits are protection against delayed payments, easy and subsidised loans, loans at lower interest rates from banks and other financial institutions etc. The procedure for MSME registration online in India under the MSME Act is described in the article below.

BENEFITS OF MSME REGISTRATION ONLINEBenefits of MSME Registration online in India

  • Easy and Collateral Free Loans:

Enterprises registered as MSME will enjoy easy and collateral-free loans from banks and financial institutions through Government schemes such as Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGS) launched by Govt. of India (GOI) etc.

  • Lower Interest Rates:

Enterprises under MSME will get the benefit of procuring loans at lower interest rates for setting-up and expansion of their business.

  • Government Subsidies:

Various Government schemes have been running for MSMEs providing subsidies to the Start-Ups, manufacturers, traders and innovators to develop and expand their businesses.

  • Protection Against Delayed Payments:

The Ministry of Micro, Small and Medium Enterprises has provided protection to MSME enterprises against the delayed payments made by the recipients of goods or services or both from the MSME enterprises. A bracket of a maximum of 45 days has been provided to the recipients to make payments to MSME enterprises for the goods or services received by them. Else, the provisions for heavy penal interests have been prescribed to be levied on recipients for making delay in payments.

  • Subsidy on Patent Registration: A subsidy of 50% is given to the Enterprise that has the certificate of registration granted by MSME.
  • Reimbursement on ISO Registration: There is a scheme of reimbursement of registration charges paid for ISO 9000/14001/HACCP Certificate upto 75% of the expenses or Rs. 75,000/- whichever is higher, subject to fulfilment of certain conditions


As per the definition given under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, micro, small and medium enterprises are classified as under:

  1. Enterprises engaged in the manufacture or production, processing or preservation of goods are categorised as follows:
Type of Enterprise Investment in Plant & Machinery
Micro-Enterprise Not more than Rs. 25 Lakhs
Small Enterprise More than Rs. 25 Lakhs but upto Rs. 5 Crore
Medium Enterprise More than Rs. 5 Crore but upto Rs. 10 Crore

While computing investment in plant and machinery for MSME Registration online in India only original cost will be considered excluding the cost of land and building and the items specified by the Ministry of Small-Scale Industries.

  1. Enterprises engaged in providing or rendering of services are categorised as follows and their investment in equipment are specified below:
Type of Enterprise Investment in Equipment
Micro-Enterprise Not more than Rs. 10 Lakhs
Small Enterprise More than Rs. 10 Lakhs but upto Rs. 2 Crore
Medium Enterprise More than Rs. 2 Crore but upto Rs. 5 Crore

In case of service sector enterprises, original cost will be considered excluding the cost of land and building, and furniture, fittings and other items not directly related to the service rendered or as may be notified under the MSMED Act, 2006

GST & MSME has brought forth greater transparency with its implementation.

Loan Restructuring Scheme by RBI

The Reserve Bank of India on 1st of January, 2019 has announced an MSME Loan Restructuring Scheme to provide relief to small businesses of the country. Under the scheme, the RBI has allowed for one-time restructuring of existing loans of MSMEs that are in default but not NPA as on 1st January 2019. Such loans restructured under this scheme will not require an asset classification downgrade.


In the Union Budget 2020 presented on 1st February 2020, it was announced that the Government has asked the Reserve Bank of India (RBI) to extend the loan restructuring scheme by another year ending 31st March 2021. It was considered by RBI in its Monetary Policy Review Meeting and decided to extend the scheme to 31st December 2020.

Accordingly, RBI vide RBI circular dated 1st January 2019 has extended the one-time restructuring of existing loans permitted to MSMEs. For entities enrolling for MSME Registration online in India, the Loan Restructuring Scheme can be availed subject to the following conditions are satisfied:

  • The aggregate borrowings of banks and NBFCs to the borrower does not exceed Rs.25 crores as on 1st of January, 2019. The borrowings include non-fund based facilities also.
  • The borrower’s account was in default though should be a ‘standard asset’ as on 1st January 2020 and till the implementation date of the loan restructuring scheme, the borrower’s account continues to be a ‘standard asset’.
  • The loan restructuring of the MSME is done on or before 31st December 2020
  • The borrowing MSME is registered under GST on the implementation date of the loan restructuring. However, the MSMEs exempt from GST registration need not satisfy this condition. To be determined for GST Registration, the exemption limit obtained as on 1st January 2020 shall be considered.

Documents and Information:

Following documents and information are required for MSME Registration online in India:

  • Documents for MSME Registration online in IndiaAadhar Card (In case of Corporate Entity Aadhar of Authorised Representative is required)
  • Social category- (General/SC/ST/OBC category) (In case of Sole Proprietor)
  • Physical status- (Physically Disabled Or Not)
  • Name of the Enterprise
  • PAN Card of the enterprise (if any) and of Owner/Authorised Representative as the case may be
  • Address Proof of Enterprise/Unit [Electricity Bill/Water Bill and Rent Agreement (if rented property)]
  • Certificate of Incorporation, MOA and AOA of the Company and in case of LLP, LLP Agreement and for
  • Partnership Firm, Partnership Deed
  • Previous MSME Registration details (if any)
  • Bank Account details
  • Mobile Number (linked with Aadhar) and E-mail ID of Proprietor/Authorised Representative
  • Employee information – number of employees working in the applicant’s enterprise; and
  • Investment details in Plant and Machinery

MSME Registration Online in India process

Following are the steps to be followed for registration as MSME:
1. Collection of Required Documents as per the Application Form

2. Review of Documents and Filling of Application along with complete particulars with MSME Department on

3. OTP Verification through Aadhar OTP will be done and the final application
will be submitted to the Department; and

4. The department verifies the same and reverts for any queries or else MSME Registration online in India is completed and a Certificate of Registration will be issued with the title “Udyog Aadhar”


1. What is MSME Registration Online in India?
MSME Registration Online in India is the registration obtained under the MSMED Act, 2006 as Micro, Small or Medium Enterprise. It is beneficial for new businesses and start-ups by getting support from the Government for establishing and expanding the business.

2. MSME stands for what?
MSME stands for Micro, Small and Medium Enterprises.

3. What kind of businesses comes under the MSME?
All kinds of businesses come under MSME whether it is Sole Proprietorship/Partnership/LLP/Company or any other form of business.

4. Is it mandatory to have MSME Registration?
No, MSME is not mandatory. However, since it is very advantageous to the enterprises due to various benefits as discussed in the article, it is recommended to have MSME Registration.

5. How long MSME Certificate is Valid?
MSME Certificate does not expire and is valid for an indefinite period. Thus, there is no validity period for MSME Certificate.

6. What is Udyog Aadhar?
Udyog Aadhar is a 12 Digit Unique Identification Number allocated to every enterprise registered under MSME and issued by the MSME Department at the time of issuing MSME Certificate.

7. What is the difference between MSME and Udyog Aadhar?
MSME and Udyog Aadhar are the same and not different things.

8. How MSME Registration Online in India helps in Skill Development?
MSME Department runs various Skill Development programmes for entrepreneurs to make them self-employed.

9. How does MSME Registration help in Entrepreneurship Development?
There are various schemes and programmes launched by the MSME Department for developing entrepreneurship within the youth of the nation which ultimately benefits in developing entrepreneurial skills.

10. Does MSME Registration supports in getting Collateral Free Loans?
Yes, under the ease of doing business and Start-Up India programme of Govt. of India, MSMEs are having the advantage of getting collateral-free loans from banks and financial institutions.

11. Is MSME beneficial in the protection of Intellectual Property Rights?
Yes, MSME is very beneficial in securing Intellectual Property Rights as there is a scheme of reimbursement of Fee for Patent Registration.

12. Do Start-Ups have any benefit of MSME?
The concept of MSME is based on the idea of supporting newly setup business and small enterprises. It will always be beneficial for Start-Ups to get themselves registered in MSME.

13. What is UAM?
UAM means Udyog Aadhar Memorandum. It is a self-declaration certifying form in which an MSME certifies its existence, bank details, Promoter’s Aadhar details etc.

14. In case my mobile number is not linked to Aadhar, can I still get MSME Registration?
Yes, you can still get MSME Certificate but the process will be quiet lengthy. it is recommended to get your mobile number linked with your Aadhar card.

15. What factors are not included while computing Investment in Plant and Machinery or Equipment?
While computing cost of investment in Plant & Machinery or Equipment only original cost will be taken in account and cost of land and buildings, furniture and fittings shall not be included. It should also be noted that Depreciation will also not to be considered.

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