Based on the recommendations of the Advisory Committee, the Government of India notified a new procedure of classification and registration of firms under The Micro, Small, and Medium Enterprises Development Act, 2006, which would take effect on July 1, 2021. The amendment aims to alleviate the challenges experienced by the MSME sector, allowing them to take advantage of government programs and kick-start their businesses during and after the COVID-19 pandemic.
A New System of Classification:
For the definition of MSME, the government added a new turnover condition and improved the investment criteria.
The government established a "Single Window Facilitation System," under which a suo moto application can be filed without any additional fees or costs. Nobody else, even government agencies, is allowed to undertake anything connected to this.
Documents necessary for registration include the following:
- Form for Self-Declaration
- Aadhaar Number
- GSTIN and PAN
Fees for registration:
There are no charges.
- The distinction between manufacturing and service enterprises criteria has been integrated under the new process, and a new turnover criterion has been added.
- On the basis of self-declaration, a new business that meets the criteria for MSMEs can file Udyam Registration online through the Udyam Registration portal.
- Existing enterprises (who already have a Udyog Aadhaar – UAM) that were registered before June 30, 2021, will only be valid till December 31, 2021.
- All businesses that were registered before June 30, 2021, will be classed according to the new criteria.
- Existing firms registered under EM-II (Entrepreneurs Memorandum – II) or UAM must apply for de novo registration on or after July 1, 2021. (Udyog Aadhaar Memorandum)
- The department will provide a permanent "Udyam Registration Number" and an e-certificate titled "Udyam Registration Certificate" after registration. It will contain a dynamic QR code that can be used to access information about the company.
- For any number of activities, whether production, services, or both, only one registration is required. To put it another way, a company can only file one Udyam Registration.
- If a business is registered with another MSMEs organization, such as the Khadi Village Industries Commission or the Coir Board, it must also register with Udyam Registration.
- Entities that do not have a PAN or GSTIN have been allowed a grace period until December 31, 2021, during which time they can register on a self-declaration basis until December 31, 2021, after which PAN and GSTIN will be required.
- In the event of a discrepancy or complaint, the General Manager of the concerned District Industries Centre will conduct an investigation to verify the details of the Udyam Registration filed by the firm.
Udyam Online Registration is Free:
The total investment amount and an annual turnover of MSMEs are used to classify them. Micro enterprises are defined as businesses with a total investment of less than 1 crore and a turnover of fewer than 5 crores. Small businesses are defined as businesses with a total investment of fewer than 10 crores and a turnover of fewer than 50 crores. Medium-sized businesses are those with a total investment of less than 50 crore rupees and sales of less than 200 crore rupees.
Enterprises must register as MSME businesses through the Ministry of MSME's Udyam registration system. Following registration, you will receive a certificate as well as a permanent registration number. Description can help you register your MSME for free online.
It is not permissible for any business to file multiple registrations. However, businesses can register for as many manufacturing/services operations as they choose.
Those who have an EM-II / MSME Registration or any other type of authority-issued registration must re-register on or after July 1, 2020. According to the government mandate, all businesses registered before June 30, 2021, will be classed. Existing businesses that were registered before the 30th of June, 2020, will only be valid until the 31st of March, 2021. Previous registrations will no longer be valid after that.
Documents Required for MSME Registration on the Internet:
- Registration form from the Udyam portal.
- Aadhaar Card is a unique identification card issued by the government of India. In the case of a proprietorship firm, the Aadhaar number will be that of the proprietor, the controlling partner in the case of a partnership firm, and a Karta in the case of a Hindu Undivided Family (HUF).
- The organization or its authorized signatory must submit its GSTIN and PAN, as well as its Aadhaar number, in the case of a Company, a Limited Liability Partnership, a Cooperative Society, a Society, or a Trust.