How To Get MSME Certification?

However, without proper MSME certification, such organisations cannot benefit from those government initiatives. Also, by gaining the official MSME status, companies can gain easy access to a host of different financing options. 

For instance, businesses can finance their growth and working capital requirements by leveraging outstanding invoices, agreements, etc. with KredX. 

Who Is Eligible For An MSME Certificate in India?

Not all organisations can enrol as an MSME. Earlier, only enterprises defined as an MSME in the Micro, Small, and Medium Enterprises Development Act, 2006 were eligible for certification. 

However, in view of the latest economic crisis in 2020, GOI has revised the criteria mentioned in the act, on 13th May 2020. 

The following table illustrates how an MSME is classified. 

Organisations that satisfy both the criterias can only acquire MSME certification in India. 

It’s important to note that a company’s investment in its plant and machinery will be computed according to the Income Tax law’s provisions. Also, the turnover will be based on GST returns. Besides, exports won’t be considered in the turnover calculation. 

How Does MSME Registration Work?

All eligible enterprises will need to acquire Udyam registration, as of 1st July 2020. The process involved is entirely digitalised, and on the premise of self-certification. Here are the steps for acquiring the registration – 

Step 1 - Visit the official Udyam registration portal.

Step 2 - Tap through the block of text, placed below “Welcome to Register here” in the main page, if registering as an MSME for the first time.

Step 3 - Enter the Aadhaar number and name of the entrepreneur and click on “Validate & Generate OTP”.

Step 4 - Provide the OTP received in the mobile number linked with Aadhaar to validate the Aadhaar number.

Step 5 - In the next page, choose the type of organisation, enter PAN, and click on “Validate PAN”.

Step 6 - Fill out the application in the following page with details as presented in Aadhaar and PAN.

Step 7 - Click on “Submit and Get Final OTP”.

Step 8 - An OTP will be sent to the mobile number mentioned in the online application form.

Step 9 - Provide it and click on “Final Submit”.

The individual will receive a registration number on their mobile number, and post verification of details, Udyam registration MSME certificate will be sent to that person’s email ID.

What Are The Documents Required To Register As An MSME?

Only the Aadhaar number is mandatory for MSME registration. Based on the type of organisation, the person whose Aadhaar number is required shall vary. These are discussed below – 

• Sole Proprietorship – The individual’s

• HUF – Karta’s 

• Partnership Firm - Managing partner

• Limited Liability Partnership, Society Of Trust, Or Cooperative Society – Authorised signatory 

What Are The Benefits Of MSME Registration?

Although MSME certification is not mandatory, the benefits provided to those registered, foster business growth much more efficiently. Some of these benefits are – 

1. Registered MSMEs can access working capital from KredX, one of India’s leading integrated cash flow solutions providers.
2. They can avail comparatively lower interest rates on bank loans. 
3. PSUs need to clear their payments to registered MSMEs within 45 days of receiving goods or services
4. Access to dedicated MSME portal – CHAMPIONS, which assists enterprises in regard to labour, finance, and permissions, among others. 
5. PSUs must buy 25% of their requirements from Micro, Small, and Medium Enterprises

What’s more? Businesses do not need to pay any fee to register as an MSME. Hence, if eligible, it’s best to get the MSME certification to be better positioned, in terms of growth opportunities.