Learn about the benefits of Udyam registration for MSMEs and the documents required to register their businesses on the Udyam portal.
Udyam registration is a general certification that allows micro, small, and medium enterprises to register themselves with the government. This registration provides the MSME with a commendation certificate and a unique identity number. Embarking on a journey of entrepreneurial success begins with Udyam Registration. This blog navigates the myriad benefits that this registration brings to businesses in India. From financial perks to enhanced market access, explore how Udyam Registration benefits entrepreneurs and fuels their growth aspirations.
Udyam Registration is an online process introduced by the Ministry of Micro, Small, and Medium Enterprises to facilitate the registration of MSMEs. It replaced the earlier system of registration known as Udyog Aadhar. This registration is essential for availing of various benefits and schemes offered by the government to promote the growth and development of MSMEs in India.
Eligibility of Udyam Registration for MSME
The Eligibility criteria for Udyam registration is divided into three main aspects, and they are enterprise type, annual turnover, and investment. Based on these factors the MSME is eligibility is analysed. As per law
- MSMEs must strictly be micro, small, or medium enterprises
- The benefits vary as per the annual turnover of the MSMEs. Micro enterprises with turnover of up to ₹5 crores are eligible for registration. Similarly, small enterprises with turnover in the range of ₹5 to ₹75 crores and medium enterprises with upto ₹250 crores annual turnover are eligible for Udyam registration
- Investment, too, is a criterion. Micro-enterprises must not have an investment of more than ₹1 crore to be eligible for the benefits of Udyam registration. Small enterprises must not exceed ₹10 crores, and medium enterprises ₹50 crores in investments.
Key Features of Udyam Registration
Udyam Registration offers a range of benefits that simplify life for entrepreneurs. Here’s a look at some key features:
- Open to All: Anyone can register their business for Udyam through the official online portal.
- Go Paperless: The entire process is digital, eliminating the need for physical documents.
- Free Registration: There are no fees involved in obtaining Udyam Registration.
- Instant e-Certificate: Upon successful registration, you’ll receive a digital Udyam Registration Certificate with a dynamic QR code, providing easy access to your business details.
- Truth Matters: Providing false information during registration or updates can result in penalties as outlined in the MSME Act.
- Seamless Integration: The Udyam system is linked to Income Tax and GST databases, automatically fetching your business investment and turnover details.
- Export Boost: Export earnings are excluded when calculating your turnover for registration purposes.
- Loan Advantage: Udyam Registration makes your business eligible for priority sector lending from banks, offering easier access to credit.
With these features, Udyam Registration streamlines the process for businesses and unlocks valuable opportunities for growth.
Benefits of Udyam Registration for MSME
Udyam Registration unlocks a treasure trove of benefits for Micro, Small and Medium Enterprises (MSMEs) in India. Here’s how it empowers your business:
Financial Boost
- Collateral-Free Loans: Secure loans from banks without needing collateral, making it easier to access much-needed funds.
- Priority Sector Lending: Get faster loan approvals and potentially lower interest rates thanks to your MSME classification.
- Patent Subsidy: Save 50% on patent registration fees, fueling innovation and protecting your intellectual property.
- Overdraft Interest Rate Exemption: Enjoy a 1% reduction on overdraft interest rates, easing your financial burden during challenging times.
- Industrial Promotion Subsidy: Receive government grants to overcome financial hurdles and accelerate your growth.
- Protection from Delayed Payments: Get paid on time! Udyam registration protects you from late payments with hefty interest penalties for those who delay.
Operational Advantages
- Reduced Electricity Bills: Enjoy lower electricity costs, freeing up resources to invest in production and expansion.
- ISO Certification Reimbursement: Get reimbursed for the costs of ISO certification, a valuable credential for international trade.
- Tax Breaks: Depending on your industry, benefit from tax exemptions during the initial stages of your business journey.
Simplified Processes
- Faster Licenses and Permits: Cut through red tape and obtain licenses and permits with a streamlined registration process.
- Easier Government Tenders: Participate in government tenders with greater ease and enjoy exemptions during the application process.
- Udyam Registration goes beyond just a certificate. It’s a comprehensive package designed to empower your MSME and propel it towards success.
Documents Needed for Udyam Registration for MSME
The necessary documentation for the registration of MSMEs is as follows:
- PAN card of the enterprise
- Entrepreneur’s Aadhaar card
- Mobile number
- Fax number
- Email address
- Date of the Business commencement
- GST certificate
- Copy of passbook
- List of male and female employees
- Type of business
- Latest auditing details or financial statement of the business
- Entrepreneur’s social category
- Partnership deed, if any
- Articles of Association (AOA)
- Memorandum of Association (MOA)
- Company registered documents
Steps to Register as MSME for Udyam Registration
If you have not yet registered your enterprise as an MSME, you can follow the below steps:
- Visit the Udyam Registration website
- Click the ‘For new Entrepreneurs who are not registered yet as MSME’ option
- Enter the Aadhaar number and enter the OTP received on your mobile number
- Click on the validate button to successfully validate the Aadhaar number
- Verify the PAN card
- Enter the enterprise type and PAN number to validate your PAN Card with MSME
- File the form of MSME registration by filling in all the necessary details such as date of commencement of organisation, email address, phone number, bank details, the amount invested
- Once you file the form, click on ‘Agree on terms and policies‘ and submit the form. Next, you will get the OTP, so enter that OTP and submit the form.
- Now you will receive the e-registration certificate on your mail ID.
Steps to Check Validity of Udyam Registration
- Visit the MSME website
- Enter the Reference or 12 digits Udyam registration number
- Click on the valid verification code by entering the Captcha image
- Remember, the verification code is case sensitive, so enter it correctly
- Now, click on ‘verify‘
- All the details will be presented on the screen.
FAQ’s
What are the benefits of Udyam tax?
Udyam Registration brings several tax benefits for MSMEs. These include preferential treatment in terms of income tax exemptions, reduced rates of interest, and excise exemption. The registration allows MSMEs to enjoy these benefits, fostering their financial stability and growth.
Is Udyam mandatory for MSME?
While Udyam Registration is not mandatory, it is highly recommended for MSMEs. Registration opens the door to a multitude of government benefits, including financial support, subsidies, and access to various schemes. It also enhances the credibility of the MSME, making it easier for them to secure loans and contracts.
What are the benefits of MSME for startups?
MSME status offers several advantages to startups, including easier access to credit, priority sector lending, and various incentives and subsidies. The government has specific schemes and initiatives tailored to support startups falling under the MSME category, making it advantageous for entrepreneurs in the startup ecosystem.
What are the tax benefits of MSME?
MSMEs enjoy a range of tax benefits, such as reduced income tax rates, exemption from certain taxes, and access to the presumptive taxation scheme. These benefits are designed to alleviate the financial burden on small and medium enterprises, encouraging their growth and sustainability.
What is MSME subsidy?
MSME subsidy refers to financial assistance provided by the government to eligible micro, small, and medium enterprises. These subsidies can take various forms, including capital subsidies, interest subsidies and technology upgradation subsidies.
Can I register Udyam without GST?
Yes, Udyam Registration can be done without GST registration. While GST registration is optional for businesses with an annual turnover below the prescribed limit, Udyam Registration is not dependent on GST registration.
Who is not eligible for MSME?
Certain entities and sectors are not eligible for MSME status. Large enterprises, public corporations, and businesses involved in activities excluded by the government are generally not eligible. It's essential to review the eligibility criteria specified by the government to determine MSME status.
Conclusion
Entrepreneurs are setting up various MSMEs in India. Therefore, these newly growing enterprises can benefit from this initiative. However, the total investment done in the form of fixed assets will be shown by the last year’s income tax return of the enterprise. After the completion of this registration process, an e-certificate is issued. So, if your enterprise has not been registered yet with Udyam registration get it done today itself through Vakilsearch and start enjoying its benefits.
Read more:
