Introduction
Udyam registration is a simplified online registration process introduced by the Government of India for micro, small, and medium enterprises (MSMEs). It aims to replace the earlier process of MSME registration with a more streamlined and user-friendly system.
The term "Udyam" is derived from the Sanskrit word for enterprise or initiative, reflecting the government's focus on promoting and supporting small businesses. The registration process is entirely online and does not involve any registration fee.
Role of udyam registration for the MSME platform
Udyam registration plays a pivotal role in the MSME (Micro, Small, and Medium Enterprises) platform by offering several significant advantages and opportunities:
Formal Recognition and Identity: Udyam registration provides MSMEs with a unique identity through a Udyam Registration Number (URN) and an e-certificate. This formal recognition helps in establishing credibility and authenticity, especially while engaging with customers, suppliers, and financial institutions.
Access to Government Schemes and Incentives: Registered MSMEs become eligible to avail themselves of various government schemes, subsidies, incentives, and support programs. These can include financial assistance, preferential treatment in government procurements, subsidies for technology adoption, and more.
Facilitates Ease of Doing Business: The registration process is entirely online, making it convenient and straightforward for MSMEs to register and update their details as required. This reduces bureaucratic hurdles and administrative complexities, thereby promoting ease of doing business.
Enhanced Credit Accessibility: Udyam registration enhances MSMEs' access to credit from banks and financial institutions. The formal registration and recognition enable easier assessment of creditworthiness, leading to better loan terms and conditions.
Statutory Benefits and Protections: MSMEs registered under Udyam enjoy statutory benefits under various laws, such as the MSME Development Act, which includes priority sector lending, excise exemption schemes, and statutory concessions in terms of interest rates for delayed payments.
Promotion of Growth and Competitiveness: By facilitating formal recognition and access to benefits, Udyam registration helps MSMEs grow their businesses more sustainably. It encourages competitiveness by enabling them to invest in technology, infrastructure, and human resources, thereby improving productivity and efficiency.
Database for Policy Formulation: The registration process contributes to the creation of a comprehensive database of MSMEs, which assists policymakers in designing targeted policies, programs, and initiatives aimed at promoting the growth and development of the MSME sector.
In essence, Udyam registration serves as a catalyst for the growth, development, and sustainability of MSMEs in India by providing them with the necessary recognition, support, and opportunities to thrive in a competitive business environment.
Eligibility of Udyam Registration
The eligibility criteria for Udyam registration are based on the definitions of micro, small, and medium enterprises (MSMEs) as per the MSME Development Act, 2006. These criteria were updated and simplified in July 2020 to promote ease of doing business. Here are the eligibility criteria based on investment in plant & machinery/equipment and turnover:
Classification Based on Investment in Plant & Machinery or Equipment:
Micro Enterprises:
Manufacturing Sector: Investment in plant & machinery does not exceed Rs. 1 crore.
Service Sector: Investment in equipment does not exceed Rs. 1 crore.
Small Enterprises:
Manufacturing Sector: Investment in plant & machinery is more than Rs. 1 crore but does not exceed Rs. 10 crore.
Service Sector: Investment in equipment is more than Rs. 1 crore but does not exceed Rs. 10 crore.
Medium Enterprises:
Manufacturing Sector: Investment in plant & machinery is more than Rs. 10 crore but does not exceed Rs. 50 crore.
Service Sector: Investment in equipment is more than Rs. 10 crore but does not exceed Rs. 50 crore.
Classification Based on Turnover:
In addition to the above investment criteria, the turnover of the enterprise is considered for classification:
An enterprise should have a turnover less than Rs. 5 crore for micro-enterprises.
An enterprise should have a turnover less than Rs. 50 crore for small enterprises.
An enterprise should have a turnover less than Rs. 250 crore for medium enterprises
Step-by-Step Process for Udyam Registration:
Visit the Udyam Registration Portal:
Access the official Udyam Registration portal
New Registration:
Click on the "New Registration" button if you are registering for the first time. If you have previously registered, you can log in using your existing Udyam Registration Number (URN).
Aadhaar Verification:
Enter your 12-digit Aadhaar number and proceed to verify it using the OTP (One Time Password) sent to your registered mobile number.
Fill Business Details:
Enter basic details about your enterprise:
Name of the enterprise
Type of organization (e.g., proprietorship, partnership, LLP, company)
PAN (Permanent Account Number)
Official address of the enterprise
Date of commencement of business
Classification of Enterprise:
Classify your enterprise based on:
Investment in plant & machinery/equipment (for manufacturing enterprises) or investment in equipment (for service enterprises)
Annual turnover
Additional Information:
Provide supplementary details such as:
Number of employees
Main business activities (NIC codes)
Bank account details (optional)
Document Upload:
Upload scanned copies of essential documents:
Aadhaar card
PAN card
Other relevant documents as required (e.g., partnership deed, incorporation certificate)
Self-Declaration:
Confirm the accuracy of the information provided through self-declaration.
Submit Application:
Review all entered details for accuracy, make any necessary corrections, and then submit the application.
Receipt of URN and E-Certificate:
Upon successful submission, you will receive a unique Udyam Registration Number (URN) and an e-certificate via email. This certificate contains a QR code for verification purposes.
Note :- Apply for udyam re-registration through udyam potral
Conclusion
Udyam registration simplifies the process for MSMEs in India to obtain formal recognition and access government benefits and support. By following the above steps, MSMEs can efficiently complete the registration process and harness the advantages provided under the Udyam framework.