MSME Registration Certificate in India: Here’s Why It Matters

Getting an MSME registration certificate in India is a crucial step for opening many doors for your business. Whether you are a business owner or someone looking to scale, an MSME registration certificate can be a blessing for your business. You can have wide access to various benefits, starting from getting loans to availing the government schemes.

So, sit tight on your couch because this blog will be your ultimate guide on why an MSME registration certificate in India can be a game-changer for your business. Let’s explore together! 

What does the word MSME mean?

Let’s begin with the term MSME before we jump into the process. Let me break this down for you. MSME stands for Micro, Small and Medium enterprises.  The Government of India uses this classification for businesses.

The core idea behind this is to support businesses based on their size, investments and turnover. If you are an owner of any type of small or micro-level business, an MSME registration certificate will give you a structure to get the support and recognition you strive for.

Sounds empowering, right?

Yes, MSMEs have a key role in India’s economic growth. It approximately generates 30.1% of India’s GDP, 35.4% of its manufacturing. Besides, MSMEs account for 45.73% exports in India. 

So, when you are registering your business under MSME and getting a certificate in India, you are not scaling yourself, but joining a community that powers the Indian economy!

What is MSME registration in India?

If you have read so far and are thinking of opting for an MSME registration certificate for your business, here is what it truly stands for:

The MSMED Act was introduced in 2006. The current MSME registration system, known as Udyam Registration, was launched in 2020, which supports small and medium-sized businesses in India in scaling up.

Please don’t be scared if your business comes under the small and medium-sized category, but you don’t have the MSME registration.

MSME registration is voluntary. However, businesses must be registered under Udyam to avail MSME-specific benefits. However, an MSME registration certificate can give you a lot of benefits in terms of tax, credit facilities and setting up your business.

Who can register their business under MSME?

Does your business operate in manufacturing? Service industries? Wholesale? Retail trade? Do you fulfil the classification limits? Then you are eligible for getting an MSME registration. The simplified list below will help you to understand the categorization. If you are:

• Individual business, startup or an entrepreneur
• Private or public limited company
• Sole proprietorship
• Partnership firm
• Limited liabilities company
• Self-help group
• Co-operative society

Getting an MSME registration certificate in India will help you to become more financially sound. It is also beneficial for enhancing trust and transparency for gaining investments in future. 

Why do you need an MSME registration certificate in India?

Since you know, MSME is not mandatory, so it is a common question that will occur in your mind: Why do I need an MSME registration certificate in India? Here is why it matters for you:

• Access to government loans: Are you a small business owner rushing from bank to bank to get loans? Are you someone who is struggling to gather funds for your small business? An MSME registration certificate in India can be your one-stop solution to all the funding-related problems.

Do you know that with an MSME loan, interest rates start from 7% p.a? It is offered by banks, NBFCs and government schemes for supporting entrepreneurship and employment.

• Tax Benefits: An MSME registration helps you to gain benefits in terms of taxation. If your business is bringing turnover up to 2 crore (3 crore if cash receipts ≤ 5% of total turnover), the MSME registration reduces the compliance rate. It gives you the liberty to declare a fixed percentage of profit instead of maintaining a detailed account.
• Credibility and Recognition: Having an MSME registration certificate in India boosts the credibility of your business. It further helps to maintain transparency with customers, suppliers and partners. An MSME registration signals legitimacy and trustworthiness for your business.

Classification and Investments after MSME registration in India (Revised)

Hello business owners and future entrepreneurs! Here is an opportunity that an MSME registration can bring for you. In the Union Budget of 2025, Honorable Finance Minister Nirmala Sitaraman has announced a major update (April 1, 2025). In this updated budget, the investment for MSME has been enhanced. Here is how it has changed:

The benefits of the MSME registration Certificate in India

Having an MSME registration certificate gives you several benefits in terms of:

1. An MSME registration certificate gives speedy access to funds and loan facilities
2. A reduced tax rate and relief from specific direct tax rates help to reduce your operating expenses. Hence, having an MSME registration certificate in India improves your profit margins.
3. Are delayed payments from buyers a pain point for you? Do you encounter financial constraints due to payments? Having an MSME registration certificate offers legal protection under the MSMED 2006 Act. Thus, it helps you to receive your due payments on time.

Process of getting an MSME registration certificate in India

To get an MSME registration Certificate in India, first, you need to register under MSME. The process is entirely online, and the steps are as follows:

• Visit the Udyam registration portal (udyamregistration.gov.in) so that you can complete the MSME registration process
• It is generally completed in two categories:

1. New business ventures or entrepreneurs that are not registered yet as MSMEs or those having an EM II
2.  People having UAM registration, and those who already possess registration as UAM through the assisted filing process

Are you a new entrepreneur who is not yet registered as an MSME, or are you someone with EM II? The process below can be a help for you:

Step 1: Log in to the portal Udyam Registration and choose the option and click “For New Entrepreneurs who are not Registered yet as MSME or those with EM-II” (it is shown on the home page).

Step 2: Now, on the next page, you have to enter your Aadhaar number and the name of the entrepreneur (If you are the entrepreneur, enter your name)

Step 3:  Next, click on the “Validate and Generate OTP Button” and enter the OTP so that your PAN can be verified.

Step 4:  Give the “Type of Organization” you are operating, along with the PAN number.

Step 5: After this, click on the “Validate PAN” button. The portal itself will gather the PAN details and validate the PAN for the number

Step 6:  Once your PAN is verified, the Udyam Registration form will open, and you need to fill in your personal details. With this, you have to enter the details of your business as well.

Step 7:  In this stage, you have to enter the investment and turnover details. Select the declaration form and click the “submit and get final OTP” button.

Step 8: Give the OTP and submit the final form.

After this, you will receive your MSME registration certificate via email.

Follow these eight easy steps and get a potential opportunity for growth through the MSME registration certificate in India.

In case you are already having a UAM registration, follow the steps as mentioned below:

1. Click on the button “for those having registration as UAM” as you will see on the home page
2. After this, you have to enter the Udyog Aadhaar number and select the OTP
3. Once completed, you have to obtain OTP on your mobile as you filled in the UAM. However, you can also do this via email.
4. Choosing the OTP options requires you to click on the “Validate and Generate OTP”.
5. Furthermore, enter the OTP and then fill in the registration details on the MSME registration form.
6. Your Udaym registration is completed after this, and you can receive your MSME registration Certificate in India.

Documents you need for the MSME registration certificate

If you are thinking that you will need a bunch of documents to get an MSME registration certificate, let me tell you this. You need only two valid documents:

• Aadhar Card
• PAN card
• GSTIN is required if the enterprise is liable for GST registration

Sounds easy, right? Yes, the process of getting your MSME registration certificate is this easy. Here is an added information for you! You don’t even need to upload the mentioned documents to the portal. Your PAN and GST-linked details are automatically taken from the Udaym portal, the government of India’s database.

Feeling confused just by hearing the word GST registration? The fact is, GST registration is not mandatory for MSMEs that do not require a GST registration under the GST law.

Required Fees for MSME registration certificate

I know what you are thinking.  What about the cost of completing the process of MSME registration? What are the fees I have to pay once I receive my MSME certificate? No fees are required for obtaining the MSME registration certificate in India. Yes, you heard it right! All you need to have internet connection and to follow the above-mentioned steps. You will receive your MSME registration certificate via email.

Final Thoughts

So, to sum it up, the MSME registration certificate in India is a valuable tool for any small or medium-sized business looking to grow and expand. It unlocks various benefits for you, including financial assistance, tax exemptions and protection from payment delays.

Besides, the process is extremely easy and free of any cost. So what are you waiting for? If you haven’t registered your business yet, this is the perfect time to do so and take advantage of everything that the government offer stoic support you.

Remember, one small step for your business today will be a giant leap towards growth and success for tomorrow!

FAQs

1. How long does it take to get an MSME registration Certificate in India?

The process will be completed within a few hours if you provide all the details correctly.

2. Is getting an MSME registration certificate mandatory in India?

No, getting an MSME registration certificate is not mandatory in India. However, having one can open the gate for growth for your business.

3. Do I need a C.A, or maybe an advocate, for getting an MSME registration certificate?

No, absolutely not. You don’t need a C.A. or an advocate for getting an MSME registration certificate in India. It is an easy process that anyone can complete online.

4. If I want, can I register my business as an Individual and get an MSME registration certificate?

Yes, absolutely! As long as you are a sole proprietor, you can register your business and receive an MSME registration certificate in India.

Disclaimer

This article is for informational purposes only and does not constitute legal advice. Online Legal India is a digital platform. If you require legal assistance, we strongly recommend consulting a qualified lawyer or law firm.