FREQUENTLY ASKED QUESTIONS (FAQs)
In accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006, the Micro, Small and Medium Enterprises (MSME) are called collectively as MSME.
Micro, Small and Medium sized enterprises in both the manufacturing and service sector can obtain MSME Registration under the MSMED Act. To avail the benefits under the MSMED Act from Central or State Government and the Banking Sector, MSME registration is required.
No, it is not mandatory but it is needed to avail the subsidies and benefits offered by government.
In accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified in two Classes:
a). Manufacturing Enterprises : the enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the first schedule to the industries (Development and regulation) Act, 1951) or employing plant and machinery in the process of value addition to the final product having a distinct name or character or use. The Manufacturing Enterprise are defined in terms of investment in Plant & Machinery.
b). Service Enterprises : The enterprises engaged in providing or rendering of services and are defined in terms of investment in equipment.
These benefits include priority sector lending, excise and direct tax exemptions, capital investment subsidies and power tariff subsidies.
MSME certificate once obtained no renewals also no annual returns to be filed.
In terms of RBI circular, banks are mandated not to accept collateral security in the case of loans upto Rs 10 lakh extended to units in the MSE sector. Further banks may, on the basis of good track record and financial position of MSE units, increase the limit of dispensation of collateral requirement for loans up to Rs.25 lakh with the approval of the appropriate authority.
In 2015, MSME department changed the name of the MSME certificate as Udyog Aadhaar certificate with the unique reference number of UAN number. So the MSME certificate and Udyog Aadhaar certificate are same.
Yes, Aadhaar number is mandatory for doing online MSME registration.
Yes, both new and existing business can apply for MSME registration and get the certificate.