Udyam Registration

Micro, Small, and Medium Enterprises (MSMEs) play a pivotal role in driving the Indian economy by creating jobs, fostering innovation, and contributing to economic growth. Recognizing the importance of MSMEs, the Government of India introduced the Udyam Registration to simplify the process of registering businesses as MSMEs. This initiative, implemented by the Ministry of MSME, aims to promote ease of doing business, streamline administrative processes, and provide various benefits to businesses, including subsidies, tax exemptions, and easier access to loans. The Udyam Registration portal is fully digital, replacing the earlier MSME registration system and providing businesses with an official certificate of recognition.

What is Udyam Registration?

Udyam Registration is the new and simplified process introduced by the Government of India for registering micro, small, and medium enterprises. Earlier known as MSME Registration, Udyam Registration is now a more accessible and streamlined method that allows businesses to register online and avail themselves of a host of benefits provided by the government. It serves as an official identity of the business and is required for businesses to access government schemes, subsidies, and financial support.

The term Udyam is derived from the Sanskrit word for "enterprise" or "venture," emphasizing the government's vision to support and empower small businesses across the country.

Key Highlights of Udyam Registration:

• Completely paperless and online process.
• Businesses receive a permanent registration number.
• Based on self-declaration with no need for uploading documents or proof during the registration process.
• Provides MSMEs with a unique identification number (Udyam Registration Number).
• Facilitates easy access to government schemes, tax incentives, and priority lending.

By registering under Udyam, businesses can formalize their operations, expand their market reach, and avail themselves of several benefits to grow sustainably.

MSME Udyam Registration Benefits

Businesses that register under the Udyam scheme enjoy various advantages that enable them to compete more effectively, reduce operational costs, and access government support programs. Below are the key benefits of Udyam Registration for MSMEs:

1. Access to Cheaper Loans

Registered MSMEs can access loans at lower interest rates, typically 1-1.5% lower than those available to non-registered businesses. This helps in reducing the financial burden and allows small businesses to expand and innovate with easier access to credit.

2. Subsidies and Tax Benefits

Udyam-registered businesses enjoy subsidies on various expenses such as patent registration, barcoding, and ISO certification fees. They also receive tax exemptions and concessions, which can significantly reduce their tax liabilities.

3. Collateral-Free Loans

Udyam Registration enables businesses to apply for collateral-free loans under various government schemes, including the Credit Guarantee Fund Scheme. This makes it easier for small businesses to secure funds without having to offer assets as collateral.

4. Priority Sector Lending

MSME-registered businesses are eligible for priority sector lending. This ensures that banks and financial institutions prioritize loans to these businesses, facilitating better access to working capital and other financing needs.

5. Government Tenders and e-Marketplaces

MSME-registered businesses can participate in government tenders and access the Government e-Marketplace (GeM). The security deposit waivers and the preference given to MSMEs in public procurement make it easier for them to compete for contracts.

6. Protection Against Delayed Payments

The MSMED Act provides protection to MSMEs by ensuring timely payments from buyers. In case of any delay beyond 45 days, registered MSMEs can receive compensation and even take legal recourse through a dedicated MSME facilitation council.

7. Concession on Electricity Bills

Udyam-registered MSMEs are eligible for concessions on electricity bills, which can help reduce operational costs significantly.

8. One-Time Settlement Scheme

Businesses facing issues related to non-payment by buyers can benefit from the One-Time Settlement Scheme, helping them resolve long-standing payment disputes.

9. Participation in Trade Fairs

Registered MSMEs can participate in national and international trade fairs organized by the government, helping them expand their reach to new markets, increase brand visibility, and build a network of business contacts.

Who Can Apply for Udyam Registration?

Udyam Registration is applicable to a wide range of business entities operating within the micro, small, and medium enterprises sectors. The process is open to:

• Sole Proprietorship
• Partnership Firms
• Limited Liability Partnerships (LLPs)
• Private Limited Companies
• One-Person Companies (OPCs)
• Hindu Undivided Family (HUF)
• Cooperative Societies
• Any Other Enterprises

Eligibility Criteria for Udyam Registration

To qualify for Udyam Registration, a business must fall under one of the following categories based on investment in plant and machinery or equipment and annual turnover. The government revised the criteria under the Aatmanirbhar Bharat Abhiyan to broaden the scope of eligibility and include more enterprises under the MSME category.

• Micro Enterprises: Investment in plant and machinery or equipment: Less than ₹1 crore, Annual turnover: Less than ₹5 crore.
• Small Enterprises: Investment in plant and machinery or equipment: Less than ₹10 crore, Annual turnover: Less than ₹50 crore.
• Medium Enterprises: Investment in plant and machinery or equipment: Less than ₹50 crore, Annual turnover: Less than ₹250 crore.

When to Opt for Udyam Registration?

Udyam Registration is beneficial for businesses at various stages of their development. Here's when it makes the most sense to register:

• New Businesses: Newly established businesses should opt for Udyam Registration as soon as they start operations. By registering early, they can take advantage of government schemes, tax benefits, and easier access to loans from the outset.
• Existing MSMEs: Businesses already classified as MSMEs under the old registration system should transition to Udyam Registration to continue receiving government benefits and stay compliant with new regulations.
• Growing Businesses: Businesses on the verge of expansion or seeking new markets can benefit greatly from Udyam Registration. It provides access to cheaper loans, government tenders, and subsidies, enabling them to scale up without financial strain.
• Businesses Looking for Loans: If your business requires working capital loans, collateral-free loans, or access to credit with low-interest rates, Udyam Registration is a must. Registered MSMEs receive priority lending from banks and financial institutions.
• Businesses Involved in Government Contracts: For businesses looking to supply products or services to the government, Udyam Registration is essential. It provides access to e-tenders and government marketplaces without the need for a security deposit.

Steps for Udyam Registration

The Udyam Registration process is designed to be user-friendly and straightforward, allowing businesses to easily register online and access the benefits provided by the government to MSMEs. Follow these simple steps to complete your Udyam Registration:

Step 1: Visit the Udyam Registration Portal

Go to the official Udyam Registration portal (https://udyamregistration.gov.in). This is the government-approved platform where businesses can register themselves under the MSME scheme.

Step 2: Select the Type of Registration

There are two options available on the homepage:

• For New Entrepreneurs who are not registered as MSMEs: This option is for businesses that are registering for the first time.
• For Those with EM-II or UAM: If you have previously registered under EM-II (Entrepreneur Memorandum) or UAM (Udyog Aadhaar Memorandum), select this option to update your details.

Step 3: Enter Aadhaar Number

For proprietorship businesses, the Aadhaar number of the proprietor is required. For partnership firms, limited liability partnerships (LLPs), or companies, the Aadhaar number of the authorized signatory or managing partner must be provided. After entering the Aadhaar number, click on "Validate & Generate OTP".

Step 4: Validate the OTP

Enter the OTP received on your registered mobile number. Once the OTP is verified, you will be directed to the next step.

Step 5: Enter Business and Personal Details

Fill in the required details about your business and yourself, including:

• Business name
• Type of organization (Sole Proprietorship, Partnership, LLP, Private Limited Company, etc.)
• PAN Number (mandatory for organizations and individuals with taxable income)
• Location of the business and the official address
• Details of the plant/unit, including the address of any additional locations

Step 6: Fill in Investment and Turnover Details

Enter the details about the investment in plant and machinery or equipment and the annual turnover of your business. This information will help categorize your business as a Micro, Small, or Medium enterprise under the MSME definition.

• Micro Enterprises: Investment less than ₹1 crore and turnover less than ₹5 crore
• Small Enterprises: Investment less than ₹10 crore and turnover less than ₹50 crore
• Medium Enterprises: Investment less than ₹50 crore and turnover less than ₹250 crore

Step 7: Provide Bank Account Details

Provide the business bank account number and the IFSC code of the bank branch where the account is maintained. Ensure accuracy for future financial transactions or benefits.

Step 8: Confirm and Submit the Application

After filling in all the details, double-check the information provided to ensure accuracy. Once you're satisfied, click on the declaration box stating that the information is true and accurate, and submit the form.

Step 9: Generate and Download Udyam Certificate

Once submitted, the system will generate a Udyam Registration Number. You will receive your Udyam Registration Certificate online, containing the unique Udyam Registration Number (URN), valid for a lifetime.

Documents Required for Udyam Registration

Udyam Registration is based on self-declaration, with no document uploading required. However, businesses should have the following details ready:

• Aadhar Number of the business owner or authorized signatory
• PAN Card (for companies, LLPs, etc.)
• Business name and address
• Bank account number and IFSC code
• Details of investment and turnover

Validity of Udyam Certificate

Once a business successfully registers under Udyam, the certificate is valid for a lifetime. Businesses must update their financial details (investment and turnover) regularly to ensure continued eligibility for MSME benefits.

Udyam Registration Fees

The Udyam Registration process is completely free of charge. There are no fees involved at any stage, making it accessible to all types of businesses.

Simplify Udyam Registration with msmeudyamaadhar

At msmeudyamaadhar, we simplify the Udyam Registration process by offering expert guidance, a paperless process, and personalized support. Here's how we help:

• Expert Guidance
• Paperless Process
• Personalized Support
• Timely Compliance Assistance
• No Hidden Costs

With msmeudyamaadhar, your Udyam Registration is completed quickly and hassle-free, so you can focus on growing your business.

Conclusion

Udyam Registration opens doors to numerous benefits for MSMEs, empowering them to thrive in the competitive market. At msmeudyamaadhar, we make the process easier and accessible, allowing businesses to focus on building a successful future. Get in touch today to begin your Udyam Registration journey!