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In a developing country like India, when central and state government programmes, increased accountability, and practical resources of funding and tax benefits come together to foster the growth of Micro, Small, and Medium Enterprises (MSMEs), it is tethered to the self-sustainability of the economy. 


The MSME registration is optional for company formation in India, but for qualifying entities, failing to obtain this registration could result in losing out on many essential benefits. Clients seeking corporate law matters consulting from MPVD & Associates are widely interested in learning more about MSME registration, processes, requirements, and reviews. Here is a basic layout of how it works and how important it is. 

What Is The MSME Act?

The MSME Development Act came to effect in 2006. And on May 13, 2020, the definition of MSME was revised under the Atmnirbhar Bharat package, where the MSME classification was updated to include composite criteria of both investment and annual turnover and neutralized the distinction between the manufacturing and the services sectors. Below is an overview of the current revised MSME classification

  • Micro-manufacturing and services units are increased to Rs. 1 Crore of investment and Rs. 5 Crore of turnover. 
  • Small units are increased to Rs. 10 Crore of investment and Rs 50 Crore of turnover. 
  • Medium units are increased to Rs. 50 Crore of investment and Rs. 250 Crore of turnover.


The MSME Act has become an essential component of the India Company Law that works to encourage the expansion and development of micro, small-to-medium-sized businesses across the nation by establishing a framework for legal classification, registration, and support. Additionally, MSME registration unlocks a wide range of benefits, like easier access to bank loans and subsidies. This can help small businesses grow continuously, improve their ability to compete in the market, and foster a variety of entrepreneurial, self-sufficiency, and job creation opportunities. 

Eligibility of MSME Registration

A person, or “single individual,” is not eligible for MSME registration. It is only reserved for businesses that fall under the definition of the above classification, i.e., the investment figure must be less than 50 crores and the turnover must be less than Rs. 250 crores. 

  • Hindu unbroken family enterprise
  • Partnership Company
  • A sole proprietorship a limited partnership a private limited company a company
  • producer business
  • Any group of people coming together, cooperative societies, or any other project.


The Hindu Undivided Family (HUF) business is eligible for MSME registration through an Udyam Registration Number. Government authorities offer a number of privileges to Udyam registration holders in order to promote significant industries, including small family businesses. Registration schemes are a great way to grow such businesses. 


Role of MSME Registration for Company Formation in India 

Although access to government programs, subsidies, and priority sector loans are advantages of MSME registration, they do not replace the formal company formation process in India. As a result, if you want to start a business in India, you must go through the entire incorporation procedure following the applicable rules and regulations, as well as any other registrations or certifications you may want to get, like an MSME registration.

How To Obtain an MSME Registration Online

With the assistance of MPVD & Associates’ company law matters consultancy, the MSME registration process is made very easy and quick. 

To get the MSME registration, the following primary documents are needed for the business owner:  

  • PAN Card 
  • Aadhaar Card 

The MSME registration does not cost anything. Businesses without GST registration are also eligible to apply for MSME registration. However, to receive the MSME registration, businesses that are obligated by the GST Law to register for GST must provide their GSTIN.

The Udyam Registration government portal serves as the primary channel for the MSME registration procedure. In the portal, applicants must choose from one of two categories.

  • New businesses with EM-II or MSME registrations that have not yet been completed 
  • Existing businesses with UAM registration, as well as those who have obtained UAM status through aided filing

The Udyam Registration Portal, integrated with the Income Tax and GSTIN systems, would automatically pull PAN and GST-related information on investments and turnover of businesses from the government databases.

The Udyam Registration Form will appear after the PAN and GST-related information has been verified. 

Finally, the applicants must fill out the form with further information regarding their investment and turnover. Once you’ve made your choice, press “Submit. 

Submitting the form will generate an “OTP” prompt, and the number will be sent to your mobile number linked with your Adhaar and PAN. 

With the final verification of the OTP, the MSME registration will be complete, and the Udyam Registration Certificate will be issued by email. Business owners can check the status of their MSME registration through the Udyam Registration Portal.

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