The micro, small and medium enterprises keep the economic wheel of a developing country like India running. Since MSMEs are the main pillars of our country’s well-being, their substantial growth plays a vital role in developing the overall economic infrastructure of the country. This sector contributes largely to India’s employment, exports, manufacturing and infrastructure development. 

The MSME Act applies to companies in the manufacturing and service sectors. Though the government has not announced the registration to be mandatory, it is always beneficial to get registered as it provides many facilities in terms of taxation and setting up the business.

To know much more about this sector, let us discuss what MSME actually is and what MSME registration means. 

What are MSMEs? 

The Government of India (GoI) introduced the Micro, Small, and Medium Enterprises (MSMEs) under the Micro, Small & Medium Enterprises Development (MSMED) Act, 2006. MSMEs are governed and managed by the Ministry of Micro, Small and Medium Enterprises (MoMSME), an apex executive body of the Government of India.

Currently, more than 6.3 crore MSMEs in India deal in the manufacturing, processing, and preservation of goods or provide various services. Let’s see how MSMEs are classified. 

MSME Classification Old vs New

Initially, the MSME classification criteria for both manufacturing and service enterprises were based on the investment made on plant, machinery and equipment. 

Therefore, to exist beneath the MSME umbrella, the enterprises limited their investment, hampering their growth. To help the enterprises scale their business while continuing deriving the MSME benefits, GoI revised the classification under the AtmaNirbhar Bharat Abhiyan (ABA). It included annual turnover as a criterion along with investment. 

Previous MSME Classification


Manufacturing<INR 25 Lakh<INR 5 Crore<INR 10 Crore
Services<INR 10 Lakh<INR 2 Crore<INR 5 Crore

Revised MSME Classification



<INR 1 Crore<INR 10 Crore<INR 50 Crore
Annual Turnover<INR 5 Crore<INR 50 Crore<INR 250 Crore

How to do MSME Udyam Registration Online? 

MSME registration online can be done through Udyam, a government-launch portal. The registration can be done by selecting any one of the options provided in the portal,

1. For entrepreneurs who are not registered as MSME or those with EM-II, and, 
2. For entrepreneurs having UAM registration, or
3. For entrepreneurs having UAM registration through assisted filing

  1. Registration for Not Registered MSMEs or Those With EM-II

    New entrepreneurs or existing entrepreneurs who are not registered as MSME or those who have Entrepreneurship Memorandum (EM-II) must select the ‘For New Entrepreneurs Who Are Not Registered Yet as MSME or Those With EM-II’ option. 

    1. On clicking the option, the page will get redirected to Udyam Registration Form

    2. Now, enter the Aadhaar Number and Name of the Entrepreneur, and then click on the Validate & Generate OTP button. 

    3. Once the OTP is received, enter it and validate.

    4. Next, the page will get redirected to PAN Verification. In the PAN Verification page, enter the Type of Organisation and PAN Number and click on the PAN Validate button

    5. After validating the PAN, fill up the Udyam Registration form with personal details and details about the enterprise. 

    6. After filling the form with relevant information, click on the Submit and Get Final OTP button. 

    7. Lastly, enter the final OTP and click on the Final Submit button to successfully complete the MSME Udyam registration process. 

  2. Registration for Entrepreneurs Who Have Registered as UAM

    Entrepreneurs who have registered their enterprise as Udyog Aadhaar Memorandum (UAM) online or through assisted filing must select ‘For those having registration as UAM’ or ‘For those already having registration as UAM through assisted filing’, respectively. 

    The following are the steps of registration, which are the same for both options.

    1. After selecting any of the two options, the page will get redirected to Udyam Registration Form – For those already having registration as UAM

    2. Enter the Udyog Aadhaar Number and select any one of the OTP options. 

    a. OTP on Mobile as filled in UAM, or
    b. OTP on Email as filled in UAM.

    3. Next, click on the Validate & Generate OTP and enter the OTP to validate.

    4. Now, fill out the MSME Udyam Registration form with your personal details and the enterprise details for successful registration. 

    You will receive a confirmation message having a reference number after submitting the registration form online. After that, MoMSME will verify the details provided, and if all the information is proper, the MSME registration certificate will be sent to your registered email address. You could also download the certificate from the Udyam portal. 

Documents Required for MSME Registration 

MSME registration is entirely online, and you only need to mention the Aadhaar number, PAN number, bank details and a few details about your enterprise. Although, there is no requirement to upload any document as proof.

The Udyam portal is integrated with the GSTIN and the Income Tax portal, from where the PAN and GST details will be extracted. However, GST detail is not required for enterprises that are exempted from GST registration as per the GST Law. 

Details Required While Filling the Online MSME Registration Form 

  • Aadhaar Number
  • PAN Number
  • Business Address
  • Bank Account Number and IFSC Code
  • Basic Business Activities
  • Total Investment 
  • Total Turnover
  • 2 Digit NIC Code

Benefits of MSME Registration

Registering your business as an MSME is not compulsory, but doing so allows you to enjoy many benefits. Following are a few of the MSME registration benefits.

  • Banks give loans to MSME with interest as low as 1 to 1.5 percent.
  • Eligible for Priority Sector Lending (PSL) from commercial banks
  • Credit for Minimum Alternate Tax (MAT) can be carried forward up to 15 years.
  • Get concessions for the cost of setting up your enterprise, registering for patents, and electricity bills. 
  • Udyam portal is integrated with Government e-Marketplace and other State Government portals from where you can get information and apply for e-tenders.
  • MSMEs also get a government security deposit waiver benefit while applying for e-tenders.
  • Avail various government schemes, such as Credit Guarantee Scheme, Credit Linked Capital Subsidy Scheme, Public Procurement Policy, Protection against delayed payments, and many more.
  • Availability of One Time Settlement Fee for the unpaid amount of MSME
  • Subsidiary for barcode registration
  • Excise exemption scheme for direct taxes
  • Fees reimbursement for ISO certification
  • Special benefits for international trade fair

The Government of India has launched various MSME schemes to support the MSMEs in various possible ways. They have started a Women Entrepreneurship Scheme to provide training, counselling, and financial assistance to women who desire to build their businesses. 

They have also launched a Grievances Monitoring System to track the complaints and suggestions made by MSMEs and Zero Defect Zero Effect scheme to ensure that the goods and services meet specific export standards. With so many pros, MSMEs should consider registering themselves to get full-fledged support from the government. 

Frequently Asked Questions

How much is the MSME registration fee?

The government doesn’t charge any fee for registering your enterprise as an MSME, and you can register through the Udyam portal without paying any fee.

 What is the validity of the MSME registration certificate?

MSME registration certificate has lifetime validity, and therefore, there is no renewal requirement.

 Who is eligible for MSME registration?

Any business entity can obtain the MSME registration, such as

-Hindu Undivided Family 
-Partnership Firm 
-One Person Company  
-Limited Liability Partnership  
-Private Limited Company 
-Limited Company 
-Producer Company 
-Any association of persons  
-Co-operative societies 
-Any other undertaking

The only requirement is the enterprise needs fall within the mentioned investment and annual turnover criteria. 

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