Online Udyog Aadhaar (SSI/ MSME) Registration – An Overview
An SSI also called Small Scale Industry Registration is a registration from the Ministry of Micro, Small and Medium Enterprises. When a business registers as SSI it becomes eligible to avail government schemes and subsidies that are exclusive for small businesses.
Startupgenie offers expert service for MSME registration:
- Free consultation
- Data verification: A thorough check of all the files submitted
- Vendor Connect: A dedicated affiliate who processes the SSI online application
- Receipt of License: The certificate will be issued within 15 days of application
MSME registration can be done by enterprises of sizes:
Under the MSMED Act, these small businesses get varying incentives such as:
- Priority sector lending
- Tax exemptions
- Capital investment
Registering for MSME is an entire online process but seeking the help of professionals makes it more easy. Startupgenie assists you with the online application and gets the required approval from the department.
What is SSI/MSME Registration?
Small scale industries play a vital role in the socio-economic development of India. To promote and encourage these small-scale industries, the government of the country created the MSMED Act. The Act was created to maintain a list of all the industries registered as MSME or SSI. The record aided in providing support and incentives to these firms. Furthermore, SSI helped in employment of people at little capital investments. All these entities should possess certificate of MSME registration, which should be registered with the Central Government’s MSME department under the Act of MSME Development- 2006
The MSMED Act includes:
- Small Scale Industries (SSI)
- Micro, Small and Medium Enterprises (MSME)
- Different sectors have different limits for registering under the act.
- A manufacturing enterprise with plants and machinery that required an investment of below 10 Crores can be an MSME.
- For service enterprises, the amount caps at five crores.
- If the company exceeds the upper limit, at any point in the future, it is not considered as an MSME.
To avail the numerous benefits from the Government of India, an SSI registration certificate is needed. It is an optional registration but the companies that get registered are eligible for:
- Lesser interest rates
- Excise exemption scheme
- Subsidies in tax, capital investment and power tariff
- Other support
New Udyog Aadhaar replaces SSI / MSME Registration
In order to make the process of registering a small or medium level enterprise even more straightforward, a new act called the Udyog Aadhaar was created in 2015. Udyog Aadhaar completely replaces MSME and is conducted entirely online. Under the Udyog Aadhaar, only one page needs to be filled for registration with Aadhaar Card acting as the sole legal document.
Following are the MSME schemes offered by the government Udyog Aadhaar
Udyog Aadhaar Memorandum (UAM) was introduced under the MSMED Act, 2006 to promote the ease of doing business for MSMEs. A simple one-page form is filed and the registration is user-friendly and easy. No documentation is required, except the 12-digit Aadhaar card number. Businesses also have a provision to file more than one Udyog Aadhaar with the same Aadhaar number. UAM can be filed on a self-declaration basis.
ZED scheme encourages manufacturers to manufacture goods for export that are of highest quality. If the standards are met and goods are exported, the exporters will be eligible for rebates and concessions. If they are not exported, the goods will be rejected and returned to India.
This scheme is aimed at helping micro, small and medium entreprises produce quality products at competitive prices by adopting the tools. Through the tools, businesses will be able to optimize the resource, improve quality, reduce rejection and rework. Under this scheme, businesses will be sensitized about the tools through activities like workshops, campaigns and seminars.
Under this scheme, the complaints and issues of the businesses will be addressed. The business owners can also track the status of their complaint and open it again it they are dissatisfied with the outcomes.
Why Udyog Aadhaar registration?
In the banking sector, if you need to avail the benefits of the MSMED Act of 2006, you will have to opt for MSME registration.
When you register your firm with Udyog Aadhaar , the business can leverage many schemes initiated by State and Central Government. In addition to this, for availing the MSMED Act 2006 benefits in the banking sector, MSME registration becomes mandatory.
- Refrain from asking for security deposits
- Concession in the electricity bills
- Increased chances of winning government tenders
- Reduction in fee for filing patents and trademark registration to get protection under the rights of intellectual properties.
- Easy and cheaper bank loans
- Reservation benefits
- Stamp duty and registration charges are waived off
- Reimbursement under the bar code registration
- Industrial promotion subsidy
- Reduction in the rate of the interest by major banks
Type of MSME Registrations
Provisional MSME Registration
The first stage of MSME registration is provisional which is given during the period before the establishment of the entity or the pre-investment period of the firm. At this point, the enterprise qualifies for:
- Obtaining facilities for accommodation, land, etc.
- Obtaining important approvals and NOCs
- Obtaining clearances from regulatory bodies
such as Pollution Control Board and Labour Regulations
The Provisional SSI Registration Certificate (PRC) enables small units to obtain term loans, and working capital from financial institutions and banks under priority sector lending.
Permanent MSME Registration
The second type of MSME registration is permanent. It is given to industrial units that are already functioning. Though the Act is not mandatory, it is immensely beneficial for firms to have the support of government.
Guidelines for online SSI / MSME Registration
Apply For Provisional Registration
A PRC ( Provisional Registration Certificate) is allotted to new enterprises without any field enquiry. It is purely an application-based form. Therefore, it has to applied in the precise prescribed form before operations begin in the unit. Once the application is submitted, the provisional registration will be provided without a physical inspection of the unit. The procedure is quick so that newly established firms can avail multiple benefits, quick loans and other necessary approvals.
Starting The Business
The provisional certificate is valid for a period of five years and the enterprise has to become operational within it. If the business fails to commence work under five years, a new application must be submitted.
Applying For Permanent SSI Registration
If the entrepreneur successfully begins operations within five years, they can apply for a permanent certification. The registration is done at the Ministry of MSMEs. The permanent SSI registration is granted only if specific conditions are met and mandatory documents are submitted.
- The unit has obtained statutory and administrative clearances as required.
- The unit does not violate any regulation or restriction.
- The value of plant and machinery in the unit does not exceed the prescribed limits.
- There should be proof the enterprise is not owned, subsidiary of or controlled by another industry.
At Startupgenie, we are committed to helping you overcome every any obstacle that may arise in MSME registration for your enterprise.
List of documents required for SSI / MSME Registration
- Business address proof
- Copies of sale bill and purchase bill.
- Partnership Deed/ MoA and AoA.
- Copy of licenses and bills of machinery purchased.
- For firms that are listed in Schedule -III of the Industrial Licensing Exemption Notification, no Industrial license is needed. Every other enterprise must obtain it for the PRC (Provisional Registration Certificate) application.
- For the registration and document process, all statutory and administrative clearances need to be obtained such an NoC from pollution board to prove that no restrictions are being violated.
Opening of the Current Account
Current account or Demand Deposit Account is used by businesses for a higher number of transactions, including deposits, withdrawals, and contra transactions. It helps in the smooth functioning of a business.
Udyog Aadhaar eligibility – Who should obtain SSI/MSME Registration?
The eligibility for the scheme of MSME or SSI registration is dependent on the scale of business of the enterprise. Udyog Aadhaar registration is applicable for Proprietorship, Hindu Undivided Family(HUF), one-person company(OPC), Partnership Firm, public limited company, private limited company, production company, co-operative societies, limited liability partnership(LLP) or any association of persons or any other undertaking.
Micro Enterprises: A manufacturing enterprise should have investment of less than Rs. 25 lakhs in plant and machinery. A service enterprise should have less than Rs. 10 lakhs invested. These micro enterprises are the smallest entities.
Small Enterprises: For manufacturing enterprises, the investment has to be between Rs. 25 lakhs and Rs. 5 crores in plant and machinery. For service enterprises, the range is between Rs. 10 lakhs and Rs. 2 crores.
Medium Enterprises: If it is a manufacturing enterprise, the investment in plant and machinery has to be between Rs. 5 crore and Rs. 10 crores. If it is a service enterprise, the range is from Rs. 2 crores to Rs. 5 crores.
How we can help with MSME Registration? Why Startupgenie
In 10 – 20 days time Startupgenie obtains your MSME registration (without factoring in Government approval time).
2 Working Days
Following are the documents to be submitted with us:
- PAN cards
- Rental agreement for the office address (if rented)
- Electricity bill
- Identity and address proofs of the proprietor/partners/directors
- For private limited companies:
- Memorandum and Articles of Association
- Form 32
- Form 18
- Certificate of incorporation
- For Partnerships:
- Partnership agreement
2 Working Days
The submitted documents are filed along with the application. In some states, additional paperwork might be needed such as sale bills of machinery and municipal clearance.
15 Working Days
If production has not begun, a provisional certificate is issued for 5 years. It becomes permanent when the unit is functioning.
FAQs on SSI/MSME Registration
For how long is a Provisional Registration Certificate (PRC) valid? What factors are not counted as investment?
The PRC expires at the end of five years, at which point you may reapply if the unit is not yet operational, or if the unit exceeds investment limits set by the MSMED Act. Once you commence operations, you can apply for the Permanent License. For a registration, total plant and machinery cost should be up to Rs. 25 crore for manufacturing units and Rs. 10 crore for service units. While calculating this number, the value of land and building will not be counted toward the total investment. Also, the original cost of the equipment and plant and machinery is taken into account. Depreciation cannot be factored in.
How does SSI/MSME help me get a loan from a bank?
All financial institutions, including the major banks recognise MSMEs/SSIs and have devised special schemes for them. MSMEs and SSIs are earmarked for priority sector lending. This increases the likelihood of you being granted a loan considerably. Major Indian Banks also provide loans to MSMEs at lower interest rates. You may also expect to get preferential treatment in case of any future delay in repayment.
What benefits are given by state and central government?
Most states offer those units registered under the MSMED Act a subsidy on power, taxes, and entry to state-run industrial estates. In particular, there is a sales tax exemption in most states and purchase preferences on goods produced. The Central and State Governments provide certain important benefits to MSME in the initial years of business. Exemption in excise and certain direct taxes are just to name a few.