An MSME certificate is a certification issued by the Indian government to businesses that are considered micro, small, or medium enterprises. This enables businesses to avail the benefits of MSME certificates, like government schemes, financial assistance, tax exemptions, and priority in tenders. Obtaining an MSME certificate is easy by registering online with the Udyam portal and downloading the certificate.

The micro, small, and medium enterprises (MSMEs) sector is the backbone of India’s economic development. The development of MSMEs has also played an integral role in creating mass employment and promoting a more widespread and balanced form of industrialization in rural and backward areas of the country, thereby helping to reduce regional imbalances and enable more equitable development. The MSME sector now encompasses 63.4 million units spread across the country, accounting for 6.11 per cent of the manufacturing GDP and 24.63 per cent of the GDP from service activities.

Now the question arises what is an MSME Certificate? Knowing the role MSMEs can play in the development of India, the government has developed schemes and policies to promote their growth.There are several benefits of MSME certificates, including low-interest loans, protection against delayed payments, and greater access to global markets. It can be renewed every year to ensure that businesses continue to benefit from government schemes and are compliant with all regulations.

What is an MSME Certificate?

An MSME certificate is given by the Ministry of Micro, Small, and Medium Enterprises (MSME) of India to those businesses that are classified as micro, small, or medium enterprises according to the government criteria. It is mandatory, as only after this the business is entitled to the government’s schemes and incentives that are only applicable to the MSMEs.

Businesses that come under the MSME sector are classified based on their investment in plant and machinery or equipment and also by turning over an annual amount. The government has set the limits for each category clearly:

1. Micro Enterprises:
   • Investment: less than ₹1 crore.
   • Turnover: less than ₹5 crore.
2. Small Enterprises:
   • Investment: less than ₹10 crore.
   • Turnover: less than ₹50 crore.
3. Medium Enterprises:
   • Investment: less than ₹50 crore.
   • Turnover: less than ₹250 crore.

Such a classification also allows the state to offer differential and targeted support to small businesses to ensure that firms in the lower investment and turnover brackets get the assistance they need to grow. The MSME certificate helps identify the business so that it gets the appropriate benefits of the MSME certificate and protection.

In the past, the MSME sector has played a key role in maintaining balanced regional development. Nowadays, jobs are created in rural and underdeveloped areas to sustain the socio-economic development of the country. The MSME certificate is the main component of this development.

Benefits of the MSME Certificate

An MSME certificate is not just a formality. It opens the doors to a lot of incentives, which can play a major role in the growth of the business. These incentives are provided by the Indian government to improve operational standards, access finance, and grow the business in different ways. Have a look at the benefits of the MSME certificate detail below:

Access to Government Schemes and Subsidies

A major benefit of an MSME certificate is that it enables a micro, small, or medium enterprise to avail of government schemes that provide financial aid and subsidies. For example, a scheme such as the Credit Guarantee Fund Scheme (CGS) for Micro and Small Enterprises is a lifeline for small businesses that are unable to offer collateral when taking out loans.

Secondly, the subsidy for patents is another major advantage, as it cuts down the cost for MSMEs that want to patent their inventions. This would encourage small enterprises to innovate and safeguard their intellectual property without incurring huge expenditures. Industrial Promotion Subsidy (IPS) is the third advantage, and it guarantees the added benefits of an MSME certificate for small industries that are aspiring for industrial development.

Low-interest Loans

MSMEs often find themselves in a situation of not having enough funds at their disposal. The MSME certificate empowers them to take low-interest loans, run their business smoothly, expand, and take on new projects. Through the Credit Guarantee Trust Fund for Micro and Small Enterprises (CGTMSE), MSMEs can avail of collateral-free loans from banks and financial institutions that otherwise require security, something that small businesses seldom have in abundance.

With low-interest loans, MSMEs can concentrate on their ventures without high repayment burdens.

Also Read: Working Capital Loan for SMEs 

Tax Benefits

Another advantage you get along with your MSME certificate is the benefit of tax breaks and incentives that come from some of the laws and policies. The tax benefits of MSME certificates are that MSMEs do not have to pay taxes under Direct Tax Laws, and the money which they save can be invested back into the business. MAT (Minimum Alternate Tax which is applicable to the companies) can be carried forward by the MSMEs for a period of 15 years as compared to 10 years. These taxation benefits make the financials of small businesses a bit lighter, and they can spend more money.

Also Read: GST Payments 

Priority in Government Tenders

The Indian government encourages MSMEs by providing them with a preference in public procurement tenders. For example, an MSME in India must be registered to bid for tenders from the central and state governments. Having an MSME certificate enables eligible businesses to participate in the tendering process and compete fairly with larger companies. Moreover, many government tenders waive the requirement for MSMEs to deposit the Earnest Money Deposit (EMD). The EMD is a non-refundable deposit that must be submitted by the highest bidder to secure a contract.

This creates opportunities for MSMEs to bid for lucrative government contracts, allowing for their growth and expansion.

Credit for International Trade

International trade can accelerate the growth of an MSME, and an MSME certificate allows businesses to avail export credit at lower interest rates. There are multiple schemes to help the MSMEs get financial support and protection against international customers. For example, an MSME can avail financial help from the Export Credit Guarantee Corporation (ECGC), which insures the MSMEs against the risks of non-payment by international customers. It helps businesses enter the international markets with confidence.

MSMEs exporting goods and services also benefit from subsidies and relief from taxes, which makes it even easier for them to access foreign markets.

Protection Against Delayed Payments

Another major problem for MSMEs is delayed payments from buyers, often from large corporations. When a buyer delays payments, the MSME faces a major cash-flow problem and it simply cannot meet its operational costs. However, if a business has an MSME certificate, then under the MSME Development Act, the buyer must pay the MSME within a fixed period of time (usually 45 days).

This legal protection will help MSMEs avoid being ‘cash-starved’ by late payments and hence increase their cash flow and operational stability.

Also Read: Digital Payments for SMEs 

How to Register for MSME Certificate Online

The government has made the registration process simpler for enterprises by creating a dedicated website (Udyam Registration portal) for MSME certificate applications. The entire procedure is online.

The procedure for the application for an MSME certificate is as follows:

Visit the Udyam Registration Portal

The first step is to visit the official Udyam Registration portal (https://udyamregistration.gov.in), a government website managed by the Ministry of MSME. Its intuitive interface helps businesses complete the registration process online.

Aadhaar Number for Registration

The registration requires an Aadhaar number. The Aadhaar number of the owner for the proprietorship firm and the Aadhaar of the managing partner for the partnership firm are required. GSTIN and PAN of the companies, LLPs, and cooperative societies are also required for registration.

The Aadhaar-verified ID of the business owner is checked first before the registration process is initiated.

Also Read : GST Registration Requirements 

Fill in Business Information

Once you have entered the Aadhaar number, you will be asked to provide the following details of your business:

• Name of the business.
• Type of organization (e.g., proprietorship, partnership, LLP, company, etc.).
• PAN number of the business.
• Address of the business.
• Bank details (for receiving monetary benefits of MSME certificate).
• Investment in plant and machinery or equipment.
• Annual turnover.

Make sure all information provided is correct, as any discrepancies will delay the registration process.

Verification and Submission

Once you fill in all the blank fields, the system checks if all the information matches with the UID and PAN databases.  If yes, you can apply online.

Zero-Fee Registration

Registration in the Udyam portal does not entail any cost. There are no registration fees that MSMEs have to pay to avail of the certificate. Thus, this process is accessible to all the MSMEs.

Issuance of MSME Certificate

After you complete the registration process, a Udyam Registration Number (URN) will be sent to your email ID, and the MSME certificate will be emailed in a PDF format that can be printed and used for official purposes.

How to Download MSME Certificate Online

You can download the certificate easily via the Udyam Registration portal after the registration is properly complete. Here is the complete process on how to download your MSME certificate online.

Visit the Udyam Registration Portal

To download your MSME certificate, visit the official Udyam Registration Portal (https://udyamregistration.gov.in). The same portal you registered your business on.

Click on ‘print/verify’

Go to the ‘Print/Verify’ option in the menu bar on the homepage of the Udyam Registration portal. From the dropdown that appears, click on ‘Print Udyam Certificate’. 

Enter Udyam Registration Number (URN)

You will then be asked to provide your Udyam Registration Number (URN). This is the number you got when you registered yourself. Enter the correct URN as this is the one that your certificate will be based on. 

Provide Aadhaar Number

Enter the Aadhaar number to ensure the certificate is being downloaded. 

OTP Verification

After entering your Aadhaar number, an OTP (one-time password) will be sent to your Aadhaar-linked mobile number. Enter the OTP to verify your identity. 

Download MSME Certificate

Once your MSME certificate is successfully verified using OTP, you can download it in PDF format. Save or print the certificate for your records.

How to Check the Status of MSME Registration Online

While you’ve applied for MSME certificate registration, you must follow the status of your application. This helps you avoid any issues with your registration. Keep check on the status of your application by following these steps:

Visit the Udyam Registration Portal

You need to visit the Udyam Registration portal to know the status of your MSME application. This is the same portal where you registered yourself earlier.

Click on ‘Verify Udyam Registration’

Click on the ‘Verify Udyam Registration’ button on the homepage. You will be navigated to a page where you can verify the registered MSME status.

Enter Udyam Registration Number (URN)

You need to enter your Udyam Registration Number (URN) in the box given there. You were assigned this number during your registration.

Enter Captcha Code

To prove you are not a robot, you will be asked to enter a Captcha Code that you see on the screen. Once you have entered the code, click on ‘Verify’. 

Check Your Registration Status

After logging in, if your MSME registration is still in process, the system will display that information; otherwise, if your registration is completed, your MSME registration certificate will be displayed, which you can download. Finally, if your registration is still being processed, you will be informed that your details are in the process. You can log out of the portal by clicking on the ‘Log Out’ button.

Updating MSME Certificate Information

Now that you have completed the business registration process and obtained the MSME certificate, you must ensure to keep the details updated. This is especially important if you make changes to your business or have a turnover or investment crossing the limits of the tier that you originally registered under, or changes in business structure. This is how you update your MSME certificate details:

Visit the Udyam Registration Portal

To update your MSME certificate information, visit the Udyam Registration portal.

Login with Your Udyam Registration Number

Log in with your URN (Udyam Registration Number) and the Aadhaar number of your business owner’s Aadhaar number. An OTP will be sent to your registered mobile number for verification.

Select ‘Update Udyam Registration’

After signing in, click ‘Update Udyam Registration’ to update the business details as per your requirements.

Edit the Necessary Information

You can update various details, such as:

• Business name
• Business address
• Investment in plant and machinery
• Annual turnover
• Type of enterprise (micro, small, or medium)

Submit Changes for Verification

After updating all inputs from your side, submit the form. The system will validate the changes, and if approved, an updated MSME certificate will be issued.

Conclusion

The MSME certificate provides its certificate holders with access to a wide array of benefits of an MSME certificate, which can be instrumental in improving their business operations and finances. These benefits include low-interest loans, protection from payment delays, tax benefits, government support, and assistance in raising funds through issuing corporate bonds.

You can go online on the Udyam Registration portal, fill out the simple application form, and receive the MSME certificate within a day. The certification process is easy and ongoing. As a result, a country’s agencies that support small businesses are in close contact with registered businesses themselves.

For MSMEs looking to scale, win government contracts, and secure financial protection, the key is to apply for and maintain an MSME certificate. The MSME certificate grants MSMEs access to vital government schemes and subsidies that can help them thrive and expand.

FAQs

How long does it take to get an MSME certificate?

Once you are done with the registration process on the Udyam Registration portal, you will receive your MSME certificate within a few hours. If you are lucky, you might be able to get it within an hour. The process is designed to be quick, easy to follow, and 100 per cent online so that businesses can avail the benefits of an MSME certificate without having to wait for weeks to receive the approval.

What documents are required for MSME registration?

The MSME certificate registration requires your Aadhaar number (for the proprietor or managing partner or authorized signatory), PAN card, and other basic business details such as the name of your business, registered address, amount of investment made in plant and machinery or equipment, and the annual turnover. In case you are a company or LLP, you will also need to provide your GSTIN, and if you don’t know your GST number then you can use different tools online to search GST number. Accuracy is of utmost importance to make the registration process hassle-free.

How do I apply for an MSME certificate online?

You can apply for it online through the Udyam Registration portal, where all you need to do is furnish basic data about your business and provide your Aadhaar and PAN identifiers. This is verified, and the MSME certificate is issued free of charge. The portal is designed to make the registration process easy, and quick for the MSMEs.

What happens if I lose my MSME certificate?

In case you lose your MSME certificate, you can download a new copy by logging in to the Udyam Registration portal. Just log in with your URN (Udyam Registration Number) and UID number, authenticate your identity with a one-time password (OTP), and download your certificate in the form of a PDF. Keep your URN and Aadhaar details safe because you will need them to download your certificate again.

Can a sole proprietor apply for an MSME certificate?

Yes, but sole proprietors are also eligible for an MSME certificate. Indeed, the registration process is designed for all types of business entities, including sole proprietorships. The sole proprietor is required to provide his or her Aadhaar number and details about the relevant business. Then, the business is registered as an MSME, allowing the sole proprietor’s business to benefit from the protections as well as the tax and other benefits of the MSME certificate on par with any other form of business entity.

How often should I update my MSME certificate?

If there is any change in investment, turnover, or business structure (from micro to small, small to medium, or vice versa), your MSME certificate needs to be renewed. That’s how you keep your business updated to avail yourself of the benefits and keep up with government rules.

Is MSME registration free of charge?

Yes, there is no charge for MSME registration on the Udyam Registration portal. The process of getting the certificate is free, as the government doesn’t charge any hidden fees or other charges. This means that any business wishing to register can do it without worrying about the cost of registering. By making the registration free, more small businesses can avail themselves of the many government schemes for MSMEs.

Can a business update its MSME registration if it grows beyond the MSME threshold?

Yes, a business that is a micro, small, or medium enterprise at the time of registration but crosses the MSME thresholds due to growing scale must update its registration information. with the latest details of their investment and turnover through the Udyam Registration portal. 

What happens if there is an error in the MSME certificate?

If there is any error in your MSME certificate, like your business information or registration details, then you can rectify it by just logging into the Udyam Registration portal. Log into the registration portal under ‘www.udyamregistration.gov.in’ and click on ‘Update Udyam Registration’. Make the necessary changes and apply. The revised details will be reviewed, and a new MSME certificate will be issued.

Does the MSME certificate expire, and do I need to renew it?

No, the certificate does not have a validity date, and the MSMEs are not required to renew the certificate periodically. But from time to time, if the investment or turnover increases or decreases and the business structure changes, they are required to renew their registration. This way, your enterprise will continue to receive benefits under the correct category (micro, small, or medium enterprise).