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.
Benefits of Udyam Registration for MSME
- Banks give collateral-free loans
- Easy access to the registrations, approvals, and licenses
- International trade receives special consideration
- Concession on various bills, such as electricity bills
- Credit Linked Capital Subsidy Scheme is validated by the Udyam registered organisations
- Reimbursement of ISO certification fees
- Protection against delayed payments or supplied services
- Subsidy and fewer interest rates offered on bank loans
- Different reservation policies for production or manufacturing units
- Exemption of direct tax
- Subsidy on credit rating and NSIC performances fees
- Patent and barcode subsidies
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.
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