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The procedure for Registration of Small Scale Industries/ Micro Small and Medium Enterprise (MSME)

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Definitions of Micro, Small & Medium Enterprises are defined in accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME). Small Scale and ancillary units (i.e. undertaking with investment in plant and machinery of less than Rs. 10 million) should seek registration with the Director of Industries of the concerned State Government.

The main purpose of registration of SSI or MSME is to maintain statistics and to maintain a note of such units for providing support and incentives for these companies. States have generally adopted a uniform registration method for registering these companies but since this is a State list subject and they use the registration to implement their own scheme, so it is possible that in some states have slight modification from the general procedure provided below and some states may have a “SIDO registration scheme” and a “state registration scheme”.

In the registration of SSI/MSME there are two types of certificates provided by the authorities, initially provisional registration certificate is given to the companies which is valid for five years. It is given for pre-operative period and after that a permanent registration certificate is given in perpetuity.

There are three slabs which are prescribed under MSME Act to define an enterprise:

No. Type of Enterprise Manufacturing Enterprises
(Investment in Plant and Machinery)		Service Industry
(Investment in equipment)
1.MicroDoes not exceed Rs. 25 LakhDoes not exceed Rs. 10 Lakh
2.SmallExceeds Rs. 25 Lakh but does not  exceed Rs. 5 CroreExceeds Rs. 25 Lakh but does not  exceed Rs. 5 Crore
3.MediumExceeds Rs. 5 Crore but does not  exceed Rs. 10 CroreExceeds Rs. 2 Crore but does  not exceed Rs. 5 Crore

The registration for a medium enterprise which is engaged in manufacturing is necessary to be registered for other enterprises registration is optional.

MSME Registration, SSI Registration
MSME Registration & SSI Registration

Procedure for MSME Registration

Eligibility for MSME Registration

All Micro & Small Enterprises which are registered with the Director of Industries (DI)/District Industries Centre (DIC) as manufacturing/service enterprises or having Acknowledgement of Entrepreneurs Memorandum (EM Part-II) are eligible for registration with NSIC under its Single Point Registration Scheme (SPRS).

Micro & Small Enterprises who have already commenced their commercial production but not completed one year of existence. The Provisional Registration Certificate can be issued to such Micro & Small Enterprises under Single Point Registration scheme with monitorylimit, minimum amount of money to be invested, of Rs. 5 Lacs which shall be valid for the period of one year only from the date of issue after levying the registration fee and obtaining the requisite documents.

How to apply:

Micro and Small enterprises could be applied through online application that is provided by the prescribed state website(State website’s of thou are applying for registration) respective state in which or by submitting the application form in duplicate which is to be submitted the concerned Zonal/Branch Office of NSIC located nearest to the unit.

Procedure:

Step 1: Provisional Small Scale Industry (SSI) Registration

To obtain SSI registration you must apply for provisional SSI registration certificate. This certificate is given when the unit is in pre-operative stage and helps SSI unit obtain term loans and working capital. This license is given for five years.

One could apply for this certificate online through the state website or by applying in the concerned zonal department.

Important Documents for Provisional SSI registration:

  • Three passport size photographs of proprietors/partners/directors, as the case may be.
  • Photocopy of the partnership deed in case of a partnership unit. It is not necessary that the partnership should be registered under the Partnership Act.
  • Copy of the Memorandum and Articles of Association in case of Private Company along with a certificate of incorporation. Copy of the resolution of the company authorising one of the Directors of the company to sign the application form and also appear for the interview.
  • Proof of legal possession i.e. rent receipt, NOC from the landlord with proof of ownership, the power load authorised by the connection holder to the applicant
  • Provisional Registration would be allowed in approved Industrial areas only after the Unit has obtained consent to establish from Delhi Pollution Control Committee
  • Some of the documents may differ because each state has different requirements for documents. Above given documents are minimum required documents that are to be submitted

Benefits of Provisional SSI registration

  • Material for construction of factory building : The material which is needed for construction of the factory or building would be available to the factory at subsidized rates from government
  • Apply for Municipal Corporation License & power connection. With the provisional registration the company would be able to get all the clearances from the concerned authorities.

Step 2: Start the Business

The next step towards having a permanent license is to start the business with SSI certificate. The owner should start the production in the factory so that permanent licence could be given.

Step 3: Apply for Permanent SSI registration

After you have started the business you should apply for permanent SSI registration. This could be done by applying online through state website or through the Zonal office or district office of the department.

Requirements for applying PRC(Permanent Registration Certificate)
  • You may apply for the PRC without an industrial license in case your unit is listed in Schedule-III of the Industrial Licensing Exemption Notification. Other units must first acquire an industrial license.
  • The unit should have obtained all clearances from the pollution control board, drug control board etc.
  • The unit should not violate any locational restriction
  • The original value of plant including machinery should be within prescribed limits for which you are applying.
  • The unit should not be a subsidiary, owned or controlled by another industrial undertaking.
Documents which are to be submitted for applying in     
  • Proof of ownership of premises i.e. allotment letter/possession letter/lease Deed/property tax receipt. If the unit has a municipal corporation license in its own name or in the name of its proprietor or one of the Partner/Directors as the case may be, then no other proof of legal possession is required.
  • In case premises are arranged on rental basis, unit should submit proof of Legal possession i.e. a rent receipt and/or NOC from the landlord supported by the proof of land lord’s ownership. For this purpose rent receipt/rent agreement with GPA (General Power of Attorney) is also accepted provided the GPA is appointed by the owner/lessee through a Regd. deed.
  • One photo copy of sale bill of each end product applied for.
  • One photo copy of purchase bill of each raw material.
  • Copy of partnership deed in case of partnership unit (this need not be registered.)
  • Copy of Memorandum of Articles of Association with certificate of incorporation in case of private limited company (in case of any change of Directors subsequently, copy of resolution and intimation in form No.32)along with copy of resolution authorising one of the directors to sign the application for grant of permanent SSI registration.
  • Copy of the industrial license from Govt. of India in case the end products require such license under Industrial Development and Regulation Act.1951.
  • An affidavit on Rs.10/- Non judicial Stamp Paper duly attested by Notary Public affixed with proper notarial Stamp giving the status of the unit, machinery installed, power requirement etc. as per the prescribed format
  • Purchase bill of machinery installed.
  • Photo copy of valid consent letter from pollution control committee of that state.
Benefits for having a permanent SSI registration
  • Tax Benefits: Depending on your business, you may enjoyExcise Exemption Scheme as well as exemption from certain Direct Taxes in the initial years of your business.
  • Availability of raw material depending on existing policy: Raw material for production would be given by the government in the initial years at subsidized rates.
  • Benefits from Banks: All banks and other financial institutions recognise MSMEs and have created special schemes for them. This usually includes priority sector lending, which means that the likelihood of your business being sanctioned a loan is high, and lower bank interest rates. There may also be preferential treatment in case of delay in repayment.
  • Benefits from State Governments: Most states offer those who’ve registered under the MSMED Act subsidies on power, taxes and entry to state-run industrial estates. In particular, there is a sales tax exemption in most states and purchase preference on goods p

Time taken for SSI or MSME registration ranges between 5 to 20 days depending on the state in which the industry is located in.

State website for Provisional SSI registration

State website for Permanent SSI registration

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