Udyam MSME registration
Register for Udyam / MSME / Udhog Aadhar registration certificate and avail various beneficial Government schemes
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Introduction
The Government of India has recently launched the Udyam Registration Portal, a one-stop online portal for registration of Micro, Small, and Medium Enterprises (MSMEs) in India. The Udyam Registration Portal has been designed to simplify the process of registration of MSMEs and to provide various benefits and incentives to these businesses. In this article, we will discuss the importance of Udyam registration, its benefits, and the procedure for registration.
What is Udyam Registration?
Udyam Registration is an online registration process for Micro, Small, and Medium Enterprises (MSMEs) in India. It is a one-stop online portal for registration of MSMEs, which has been launched by the Government of India. The objective of Udyam registration is to simplify the registration process for MSMEs and to provide various benefits and incentives to these businesses.
Salient features of Udyam registration
- Anyone can get Udyam Registration online.
- The registration process is completely digital and paperless, no document uploads required.
- Registration is free, with no costs involved.
- You’ll receive an e-certificate named “Udyam Registration Certificate” upon registration completion.
- This certificate has a dynamic QR Code for easy access to enterprise details on udyam portal.
- Providing false information during registration could lead to penalties under Section 27 of the MSMED Act 2006.
- The online system is linked with Income Tax and GSTIN, automatically fetching investment and turnover details from government databases. Exports are excluded from turnover calculations.
- Those with EM-II or UAM registration need to re-register before 31st March 2021.
- Each enterprise should have only one Udyam Registration, but multiple activities like manufacturing or services can be specified under one registration.
Here is a sample Udyam registration certificate –
Challenges Faced by MSMEs
Micro, Small, and Medium Enterprises (MSMEs) face a variety of challenges that can impact their growth, sustainability, and overall success. Some of the common challenges faced by MSMEs include:
1. Limited Access to Finance
MSMEs often encounter difficulties in accessing adequate funding from banks. Limited financial resources can hamper their ability to invest in technology, infrastructure, and expansion, thereby impeding their overall growth and competitiveness.
2. Lack of Skilled Workforce
Finding and retaining skilled employees can be a significant challenge for MSMEs, especially in industries that require specialized knowledge or technical expertise. Limited resources may make it difficult for them to offer competitive salary or training programs, leading to difficulties in attracting and retaining talented individuals.
3. Technological Obsolescence
Keeping up with rapid technological advancements can be challenging for MSMEs, particularly due to budget constraints and limited access to the latest tools and equipment. Failure to adopt modern technologies can result in decreased productivity and competitiveness in the market.
4. Market Competition
MSMEs often face intense competition from larger corporations with greater resources and established market presence. Competing against these entities can be challenging, especially when it comes to pricing, marketing, and distribution, potentially limiting their market share and growth prospects.
5. Compliance Burden
Meeting regulatory compliance requirements can be a significant challenge for MSMEs, especially as regulations continue to evolve and become more complex. Ensuring compliance with various legal, tax, and labor regulations can be time-consuming and expensive, diverting resources from core business activities.
6. Infrastructure Deficiencies
Inadequate infrastructure, including issues related to transportation, power supply, and telecommunications, can significantly hinder the operations of MSMEs. Poor infrastructure can lead to increased costs, delays in production, and disruptions in the supply chain, affecting overall efficiency and competitiveness.
7. Limited Market Access
MSMEs often face challenges in accessing new markets and expanding their customer base, especially in the context of global trade. Lack of market information, export barriers, and restrictive trade policies can restrict their ability to reach international markets and capitalize on global opportunities.
8. Supply Chain Disruptions
Dependence on a complex and often fragile supply chain can leave MSMEs vulnerable to disruptions caused by factors such as natural disasters, political instability, or global crises. Supply chain disruptions can lead to delays in production, increased costs, and a loss of customer trust and satisfaction.
Addressing these challenges requires a combination of strategic planning, policy support, access to finance, technological adoption, and skill development initiatives tailored to the specific needs of MSMEs. Creating an enabling environment that fosters innovation, encourages entrepreneurship, and facilitates access to resources can significantly contribute to the growth and sustainability of MSMEs in both local and global markets. Next we will look at the various benefits of Udyam registration certificate to counter all this challenges.
Benefits of Udyam Registration
Obtaining Udyam Registration for a business in India unlocks a multitude of benefits that can significantly contribute to the growth and sustainability of the enterprise. The registration under the MSME sector not only offers recognition but also provides access to various schemes and incentives aimed at fostering the development of small and medium businesses. Here’s an exploration of the benefits associated with obtaining Udyam Registration:
1. Access to various government schemes
Registered MSMEs are eligible to benefit from a range of government subsidies and schemes. These may include Credit Linked Capital Subsidy Scheme for technology upgrade, participation in foreign expos, credit guarantee schemes and various other support programs aimed at fostering innovation and growth within the MSME sector. You can refer this E-book for various schemes of government
2. Easy availability of loan
One of the primary advantages of Udyam Registration is the simplified access to loan facilities from financial institutions. Banks and other lending organizations often provide special schemes and reduced interest rates to registered MSMEs, enabling them to secure the necessary funds for business expansion and development.
3. Collateral Free Loans
Udyam Registration facilitates the provision of collateral-free loans, easing the financial burden on small and medium businesses. This feature allows enterprises to secure loans without providing any additional security, making it easier for them to manage their working capital requirements and invest in business expansion.
4. Reduced interest rates
MSMEs that are registered under Udyam can get loans at lower interest rates as compared to those who are not registered. Bank loans are more affordable due to significantly lower interest rates, typically around 1-1.5%, in contrast to the higher rates of regular loans.
5. Protection against delayed payments
It is widely known that businesses often operate on credit systems, where delayed payments can disrupt the smooth flow of cash, creating a problematic cycle. In recognition of this issue, a special provision has been extended to MSMEs pertaining to delayed payments. MSMEs now have the right to claim interest on payments that have been paid late.
According to the provision, in cases where goods or services are provided, and the payment is not received within the stipulated time frame or within 15 days in the absence of any specific agreement, the MSME may claim interest. In instances where the payment is delayed beyond 45 days or a predetermined period, your customer is liable to pay compounded interest and monthly interest, amounting to 3 times the standard interest rate.
The government has mandated that all public and private sector enterprises that have a turnover of more than Rs. 500 crore have to mandatorily register themselves on the Trade Receivables Discounting System (TReDS) platform. This ensures that the payments due to MSMEs are made on time.
6. Preference in Government Tenders
Udyam Registration provides MSMEs with a competitive edge by offering them preference in government tenders. This preference allows registered businesses to participate in government procurement processes, opening up opportunities for them to secure valuable contracts and projects. Udyam registration simplifies government tender acquisition, integrating the Udyam Registration Portal with Government e-Marketplace (GEM portal) and State Government portals for seamless access to their marketplace and e-tenders.
7. Access to Market Development Assistance
The registration also grants access to Market Development Assistance, enabling MSMEs to explore and expand their markets. This assistance includes various schemes and initiatives aimed at promoting the marketing and export capabilities of registered enterprises, thus facilitating their growth on a national and international scale.
8. Facilitation for opening bank accounts
Udyam registration enables MSMEs to open bank accounts with ease.
9. Patent registration subsidy
Registered MSMEs are eligible to receive a 50% subsidy on patent registration fees. This initiative aims to foster the development of novel and socially beneficial inventions. Furthermore, the charges for filing design applications have been significantly lowered in comparison to previous rates.
10. Electricity bill concession
The Government of India has recently announced its plans to extend support to registered Micro, Small, and Medium Enterprises (MSMEs) concerning their electricity expenditure. In order to access the proposed 20% subsidy over a period of 36 months, the respective MSME is required to submit a formal application to the local electricity department. As part of the application process, the Udyam (MSME) registration certificate, in addition to any other documents, must be given to facilitate the processing of concessions on electricity bills.
11. ISO Certification costs reimbursement
Reimbursement for expenses linked to ISO certification is now accessible to MSMEs. Businesses in the MSME sector that necessitate maintaining high product standards are required to fulfill ISO requisites and obtain the necessary certification. Recognizing the financial burden this process might impose, the ministry has introduced a reimbursement scheme aimed at facilitating performance improvement. Reimbursement is applicable specifically for ISO 9000, ISO 14001, and HACCP certificates.
12. Barcode registration subsidy
The Marketing Support/Assistance to MSMEs (Bar Code) scheme aims to enhance the marketing competitiveness of MSMEs through various measures. These include providing substantial financial assistance by offering a 75% subsidy on initial registration and annual fees for the first three years to Global Standard 1 (GS1) India. The scheme also emphasizes the promotion of bar code adoption among MSMEs to streamline inventory management and supply chain operations, consequently boosting their market presence. Additionally, the scheme encourages the use of bar codes through informative seminars, equipping MSMEs with the necessary knowledge to improve their operational efficiency and market positioning. Read more
Eligibility for Udyam registration
Here are the eligibility criteria for Udyam registration:
1. Type of Business Entity
- Individuals, startups, business owners, and entrepreneurs
- Sole Proprietorships
- Hindu Undivided Families (HUFs)
- Partnership firm
- Limited Liability Partnerships (LLPs)
- Private Limited Companies
- Public Limited Companies
- Co-operative Societies
- Self Help Groups (SHGs)
- Trust
2. Investment Limit
The investment limit for micro, small, and medium-sized enterprises has been revised under the Udyam registration process. Enterprises with the following investment limits are eligible for registration:
- Micro-enterprises: Investment up to Rs. 1 crore and turnover up to Rs. 5 crore.
- Small enterprises: Investment up to Rs. 10 crore and turnover up to Rs. 50 crore.
- Medium enterprises: Investment up to Rs. 50 crore and turnover up to Rs. 250 crore.
3. Previous Registration
The enterprise should not have previously registered under the Udyog Aadhaar Memorandum (UAM) or any other registration granted under the Ministry of Micro, Small and Medium Enterprises.
4. GST Certificate
Enterprises that have GST registration can apply for Udyam registration.
5. Aadhaar Card
The proprietor or the authorized signatory of the business must have an Aadhaar card number to apply for Udyam registration.
6. PAN Card
The enterprise must have a PAN card to apply for Udyam registration.
7. Turnover
The enterprise must provide details of its turnover for the previous financial year.
These are the eligibility criteria for Udyam registration that must be fulfilled by the enterprise before applying for registration.
Documents required for Udyam registration
The documents required for Udyam registration are as follows:
1. Aadhaar card
The Aadhaar card of the proprietor, partner, or director is mandatory for Udyam registration.
2. PAN card
The PAN card of the proprietor, partnership firm, or company is also required for Udyam registration.
3. Business address proof
Documents such as rent agreement, utility bills, or property documents can be submitted as business address proof
4. Bank account details
A cancelled cheque or bank statement can be submitted as bank account proof.
5. Previous MSME registration certificate
If the business was previously registered as an MSME, then the registration certificate needs to be submitted as proof.
6. GST registration certificate
If the business is registered under GST, then the registration certificate needs to be submitted as proof.
7. Business registration proof
In case of a company, partnership firm or LLP, the registration certificate needs to be submitted.
8. Income tax returns
Income tax returns of the previous year can also be submitted as a supporting document.
You don’t need to pay any fees for Udyam registration, and you don’t have to show any documents. The Udyam Registration Portal will automatically get your PAN and GST details from the government’s databases because it’s linked with the Income Tax and GSTIN systems.
How to apply for Udyam Registration ?
Udyam Registration is a pivotal government scheme aimed at supporting small and medium-sized enterprises (SMEs) in India. To take full advantage of the benefits it offers, businesses need to understand the registration process thoroughly. We will now demystify the Udyam Registration process, providing a step-by-step guide for businesses of all sizes.
Step 1: Gather Necessary Documents
Before you start the registration process, ensure you have the required documents ready. You will need:
- Aadhar Card: The Aadhar card of the business owner or the authorized signatory.
- PAN Card: The Permanent Account Number (PAN) card of the business owner or the authorized signatory.
- Business Information: Details about the type of business, its activities, and location.
- Investment and Turnover Details: Information regarding the investment in the business and its annual turnover.
Step 2: Visit the Udyam Registration Portal
Access the Udyam Registration portal, which can be found on the official government website. It’s important to ensure that you are on the correct and secure website
Step 3: Register with Aadhar Number
To start the registration process, you will need to provide your Aadhar number. This is a critical step as it is used for authentication purposes.
Step 4: Verify Your Mobile Number
After entering your Aadhar number, you will receive an OTP (One-Time Password) on your registered mobile number. Enter this OTP for verification.
Step 5: Fill in Business Details
You will be prompted to enter details about your business, such as its name, type, and location. Make sure to provide accurate and up-to-date information.
Step 6: Enter Investment and Turnover Data
Based on your business type, you will need to provide information about the investment in your business and its annual turnover. It’s important to classify your business correctly, as this will determine the eligibility criteria.
Step 7: Review and Confirm
Double-check all the information you have entered, and if everything is accurate, confirm your registration. Make sure to review all details to prevent any discrepancies.
Step 8: Udyam Registration Certificate
Once your registration is verified and approved, you will receive your Udyam Registration Certificate. This certificate is a crucial document that you should keep safe, as it can be used to avail of various government benefits and schemes.
Step 9: Update Details as Needed
Remember that you may need to update your registration in case of any changes in business details or eligibility criteria. Regularly check for updates and changes in government regulations that might affect your registration.
Here is how the registration form looks like https://udyamregistration.gov.in/docs/UdyamApplication.pdf
Updating Udyam Registration Information
Udyam Registration is a dynamic process, and businesses may need to update their information over time due to changes in business operations or eligibility criteria. In this section, we will guide businesses on how to update and modify their Udyam Registration information.
Why Update Udyam Registration?
Businesses should update their Udyam Registration information to:
- Stay Compliant: Ensure that your business remains compliant with government regulations and eligibility criteria.
- Access Accurate Benefits: Accurate information ensures that your business receives the right benefits and schemes.
- Reflect Changes: Update information to reflect changes in your business, such as investments, turnover, or operational scope.
Updating Udyam Registration: A Step-by-Step Guide
Step 1: Visit the Udyam Registration Portal
Access the official Udyam Registration portal. Make sure to visit the correct and secure website.
Step 2: Log In to Your Account
Log in to your Udyam Registration account using your credentials. You’ll need your Udyam Registration Number for this.
Step 3: Navigate to the Update Section
Within your account, navigate to the section for updating your information. The portal should have clear options for updating details.
Step 4: Modify the Necessary Information
You can modify various details such as the type of business, investment, turnover, and other relevant information. Make sure to update only the information that has changed.
Step 5: Review and Confirm
Review all the changes you’ve made to ensure they are accurate. Once you are satisfied, confirm the updates.
Step 6: Receive Updated Udyam Registration Certificate
Upon successful verification of your updates, you will receive an updated Udyam Registration Certificate reflecting the changes you made. This updated certificate is essential to stay compliant and take advantage of the right benefits.
Step 7: Regularly Monitor and Update
Staying current is an ongoing process. Regularly monitor your business operations and ensure your registration remains accurate and compliant. In case of further changes, follow the same process to update your information.
Conclusion
Udyam Registration is a valuable tool for SMEs, offering numerous benefits. To fully leverage these benefits and remain compliant, it is crucial to keep your registration information up to date. By following the step-by-step guide outlined in this section, businesses can ensure that they are always aligned with the latest regulations and opportunities provided by the government.
Conclusion
In conclusion, Udyam registration is a crucial step for small and micro enterprises to take advantage of various benefits offered by the government. Eligibility criteria, along with the necessary documents required, should be carefully reviewed before proceeding with the registration process. The benefits of Udyam registration include easier access to credit, government schemes, and exemptions from various fees. Hence, small and micro enterprises should take advantage of this opportunity to register for Udyam and grow their business. With the support of the government, Udyam registration can provide a platform for small and micro enterprises to thrive and contribute to the growth of the Indian economy.
How We can help in Udyam Registration?
Step 1 – Submit your contact details in our simple form
Step 2 – Our Expert will call you to understand your requirement
Step 3 – Pay us using UPI
Step 4– Send your documents
Step 5 – We will make application and you will receive the Udyam registration certificate with 2 days
Frequently Asked Questions
1. What is Udyam registration?
Udyam registration is a government process that identifies and certifies Micro, Small, and Medium Enterprises (MSMEs) to avail of various benefits and schemes.
2. Who is eligible for Udyam registration?
Any business falling under the classification of micro, small, or medium enterprises as per the MSME Act is eligible.
3. How can I apply for Udyam registration?
You can apply for Udyam registration through the official Udyam Registration portal by providing necessary business details, along with the required documents.
4. What documents are required for Udyam registration?
Documents like Aadhar card, PAN card, business address proof, and information about the enterprise’s activities and investments are necessary for the registration process.
5. Is there any fee for Udyam registration?
No, the registration process is completely free of charge.
6. Can a business have multiple Udyam registrations?
No, each business entity can only obtain one Udyam registration.
7. What is the validity period of Udyam registration?
Udyam registration remains valid for a lifetime unless there is a change in the enterprise’s constitution or an increase in investment beyond the eligible limit.
8. Can I update information after Udyam registration?
Yes, businesses can update their information when necessary by logging into the Udyam Registration portal using their Udyam Registration Number.
9. What happens if the information provided is incorrect?
It’s crucial to provide accurate information during the registration process to avoid penalties or potential cancellation of the Udyam registration.
10. Can a partnership firm register under Udyam?
Yes, partnership firms, along with other forms of business entities like proprietorships, Hindu Undivided Family (HUFs), and private limited companies, can register under Udyam.
11. How does Udyam registration benefit MSMEs?
Udyam registration facilitates MSMEs in accessing government support, including subsidies, loan, and other benefits aimed at fostering the growth and development of small and medium enterprises.
12. Can an existing business apply for Udyam registration?
Yes, existing businesses that meet the criteria for classification as micro, small, or medium enterprises can apply for Udyam registration to avail of its associated benefits and schemes.
13. How long does it take to complete the Udyam registration process?
The online registration process is designed to be swift and can typically be completed within a few minutes, provided all the necessary information and documents are readily available.
14. Can a foreign company apply for Udyam registration in India?
No, only Indian business entities are eligible for Udyam registration. Foreign companies operating in India should adhere to the regulations concerning foreign investments and business registrations.
15. What is the difference between Udyam registration and other MSME registrations?
Udyam registration has replaced the earlier methods of MSME registration, such as the EM-II and UAM. It streamlines the registration process and enhances accessibility to various benefits and schemes.
16. Can a micro-enterprise upgrade to a small or medium enterprise through Udyam registration?
Yes, as the enterprise grows and meets the requisite criteria for classification as a small or medium enterprise, it can upgrade its Udyam registration accordingly to avail of the benefits and concessions applicable to the higher category.
17. Where can I find assistance for Udyam registration-related queries?
For any queries or assistance related to Udyam registration, businesses can refer to the official Udyam Registration portal or get in touch with MSME development institutions and authorities for guidance and support.
