Udyam Registration

What is Udyam Registration?

Udyam Registration is a free and paperless process for registering Micro, Small, and Medium Enterprises (MSMEs) in India through the official Udyam portal. It is mandatory for all MSMEs as of 1 July2020.

Upon successful registration, businesses receive a permanent identification number, called the Udyam Registration Number (UAM). The Udyam Registration Certificate is sent directly to the registered email ID.

MSME Udyam Registration Benefits

Udyam Registration offers a wide range of benefits for Micro, Small, and Medium Enterprises (MSMEs), helping them access government schemes, financial assistance, and more. Here are 10 key benefits of Udyam registration:

• Access to Government Schemes

  Udyam registration is essential to access government schemes under the Ministry of MSME, such as the Credit Linked Capital Subsidy, Credit Guarantee, and Public Procurement Policy. These initiatives provide MSMEs with financial support, incentives, and growth opportunities.

• Financial Assistance

  Registered MSMEs can avail of various financial benefits, including:

  • Cheaper Loans: Access loans at a lower interest rate and collateral-free loans under the CGTMSE scheme
  • Subsidies: MSMEs can benefit from subsidies on electricity bills and may qualify for the Industrial Promotion Subsidy (IPS)
  • Tax Benefits: MSMEs can access extended tax benefits and may be eligible for the excise exemption scheme
  • Discounts: MSMEs can avail of discounts on trademark and patent registration fees.

• Seamless Integration

  Udyam registration integrates smoothly with other key government systems, such as the income tax portal, GST systems, and the government e-marketplace. This integration streamlines administrative processes, making it easier for MSMEs to manage their financial and tax-related tasks efficiently.

• Priority Sector Lending

  With Udyam registration, MSMEs are recognised under priority sector lending by banks. This status offers favourable terms for availing credit facilities, making it easier to secure financing for business expansion and investment.

• Extended MAT Credit

  Udyam-registered MSMEs can carry forward the MAT credit for 15 years, instead of the usual 10 years. This extended benefit can help businesses raise more funds and secure long-term growth by offering them additional tax relief

• Free ISO Certification

  MSMEs with Udyam registration are eligible for free ISO certification, which can enhance their credibility and competitiveness in the market

• Waiver of Security Deposits

  Registered MSMEs are exempt from paying large government security deposits, easing financial burdens and improving cash flow

• Protection Against Delayed Payments

  Udyam-registered MSMEs can seek redressal for delayed payments, ensuring timely payments from buyers

• Global Exposure

  MSMEs with Udyam registration can participate in international fairs and trade shows, gaining exposure to global markets and expanding their reach

• Simplified Licensing

  The licensing process is simplified for MSMEs with Udyam Registration, reducing bureaucratic hurdles and making it easier to start and run a business.

When to Apply for Udyam Registration?

While Udyam Registration is not obligatory and remains at the entrepreneur’s discretion, it is highly recommended that you apply for Udyam registration online soon after establishment. Registering early allows entrepreneurs to access a range of benefits provided by the government.

• Step 1: Login to Udyam Registration Portal
• Step 2: On the homepage click 'For New Entrepreneurs who have not yet registered as MSME or having EM-II'
• Step 3: Provide 'Aadhaar Number' & 'Name of Entrepreneur'; then click the 'Validate & Generate OTP' button
• Step 4: Enter the OTP in the required fields and click on the 'Validate' button
• Step 5: Once the Aadhaar is validated, then proceed to the PAN validation page and enter 'Type of Organisation' PAN number and click on the button of 'Validate'. In the same page, indicate whether you have filed the previous year's ITR and if you have a GSTIN
• Step 6: Fill all mandatory details, like the name of entrepreneur, mobile number, name of enterprise, location of the plant/unit, address of enterprise, status of enterprise, bank details, activity of the unit, NIC code, and number of persons employed
• Step 7: Enter details like - Plant and Machinery Details and Turnover Details, Select Declaration and Click on Submit to get the Final OTP
• Step 8: Enter the Final OTP received and submit the form.

• Udyam Registration For Existing Enterprises

  • All existing enterprises registered under EM–Part-II or UAM must re-register on the Udyam Registration portal from 1 July 2020
  • Enterprises registered until 30 June 2020, will be reclassified according to the new notification
  • Existing registrations before 30 June 2020, remain valid only until 31 December 2021
  • Enterprises registered with any other MSME organisation must also register under Udyam Registration.

• Government Schemes Especially for Udyam Registered Firms

  Udyam registration opens up access to several government schemes designed to support and promote MSMEs in India. These initiatives provide financial assistance, skill development, technological upgrades, and market access to enhance the growth and sustainability of Udyam registered businesses. Here are few schemes outlined:

  • Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE): This initiative, under the Government of India and SIDBI, offers collateral-free loans up to ₹5 Crore with an 85% loan guarantee. It has supported over 67 lakh MSMEs, aiding in technology upgradation, market development, and financial inclusion. In 2023, ₹1.46 Lakh Crore worth of guarantees were approved, benefiting MSMEs across multiple sectors.
  • Prime Minister Employment Generation Programme (PMEGP): PMEGP provides loans and working capital (₹25 Lakh for manufacturing and ₹10 Lakh for service sector MSMEs) to foster entrepreneurship and employment. Since its inception in 2008, the scheme has supported over 9.29 lakh micro-enterprises with a Margin Money subsidy of ₹34,517 Crore, generating employment for around 78.36 lakh individuals.
  • Raising and Accelerating MSME Performance (RAMP): Launched in 2022 with World Bank assistance, RAMP aims to improve MSME access to global markets and credit. The scheme also focuses on enhancing the effectiveness of existing government initiatives and promoting sustainable and women-led MSMEs. With an allocated budget of ₹6000 Crore for five years, it is expected to benefit over 5.5 lakh MSMEs, strengthening their growth potential and international competitiveness.

NIC Code for Udyam Registration

The NIC Code, or National Industrial Classification Code, is essential for Udyam registration as it helps categorise the business activities of MSMEs. It also helps to precisely identify the industry through which the business operates and collects data accordingly.

The right NIC Code is important in determining whether an MSME enterprise is eligible for the government's schemes and benefits; if properly selected during Udyam registration, this helps the business to abide by the relevant industry standards so that support comes in appropriately.

Udyam Registration Certificate

The Udyam Registration Certificate is the one issued to Micro, Small, and Medium Enterprises (MSMEs) of India by the government after their effective registration. This is proof of recognition in the MSME scheme, allowing businesses to gain access to its government. Benefits and subsidies together with other various support programs designed and implemented by the government to contribute to their growth and competitiveness.

• What is the Udyam Registration certificate?

  Udyam Registration Certificate, or simply e-Udayam - is the electronic copy of the certificate issued to a micro, small, and medium enterprise when it has been finally registered as an Udyam.

• How to Download Udyam Registration Certificate?

  To download your Udyam Registration Certificate, follow the five steps given below:

  • Step 1: Access the Udyam Registration portal
  • Step 2: Select Print/Verify, the Print Udyam Certificate
  • Step 3: Enter your Udyam Registration Number and mobile number, and choose an OTP option
  • Step 4: Validate the OTP to log in
  • Step 5: Download the digital certificate of your records.

• How to Check Udyam Registration or MSME Certificate Is Genuine

  To verify the authenticity of the Udyam Registration Number, follow these steps:

  • Step 1: Visit the Udyam Registration portal
    Step 2: Choose the ‘Print/Verify’ option, then select ‘Verify Udyam Registration Number’
    Step 3: Enter the Udyam Registration or Reference Number along with the captcha code
    Step 4: Click ‘Verify’ to confirm the registration’s validity.
    
    The businesses can update their Udyam registration certificate or cancel it by logging into the Udyam portal with their 19-digit Udyam Registration Number and their registered mobile number. They are entitled to update their name, contact details, address, and upload any document that is mandatory using the ‘Update/Cancel Udyam Registration’ option.

• How to Make Changes in the Udyam Registration Certificate?

  To make changes in your Udyam Registration Certificate, visit the Udyam portal and log in with your registration number. Follow the steps given below to update your Udyam Registration Certificate:

Udyam Registration Number

The Udyam Registration Number, abbreviated as URN, is an identification number assigned specifically to Micro, Small, and Medium Enterprises of India, which can enable the access of many government benefits, schemes, and compliance services by an enterprise.

• What is the Udyam Registration Number?

  The Udyam Registration Number (URN) is a unique 19-digit identifier assigned to MSMEs upon successful registration on the Udyam portal. It serves as a crucial reference for businesses to access various government benefits and schemes.
  
  For example, if a small textile manufacturer named 'XYZ Textiles' completes its registration, it will receive a URN like UDYAM-XX-00-0123456789, which it can use for compliance, loans, and subsidies tailored for MSMEs.

• How to find Udyam Registration Number?

  If you have misplaced your Udyam Registration Number, follow the steps:

  • Step 1: Visit the Udyam Registration portal
  • Step 2: Choose ‘Print/Verify,’ then select ‘Forgot Udyam /UAM No’
  • Step 3: Select Udyam registration, choose your OTP method, and enter your contact details
  • Step 4: Validate the OTP to log in
  • Step 5: Your Udyam Registration Number will be sent to your registered contact method.

• Where is the UAM Number in the Udyam Registration Certificate?

  UAM number does not appear on the Udyam Registration Certificate, but you can do this from here to print it out:

  • Step 1: Proceed to the Udyam Registration portal
  • Step 2: Click on the ‘Print/Verify’ option and then select ‘Forgot Udyam/UAM No’
  • Step 3: Select the desired OTP option
  • Step 4: Fill in your registered mobile no or email ID
  • Step 5: Click on ‘Validate & Generate OTP’
  • Step 6: Enter the OTP received on the registered mobile no or email
  • Step 7: Click on ‘Validate OTP and Login’

Udyog Aadhar Number

A Udyog Aadhaar number is a 12-digit unique identification number for small and medium-sized enterprises of India. This number is issued by the Ministry of Micro, Small, and Medium Enterprises, MSME, and also addresses as 'Aadhaar for business

• How to Find Udyog Aadhar Number?

  • Step 1: Visit the Udyam Registration Portal
  • Step 2: Go to the ‘Print/Verify’ menu and select ‘Forgot Udyam/UAM No’
  • Step 3: Choose the OTP option (via mobile or email).
  • Step 4: Click ‘Validate & Generate OTP’
  • Step 5: Enter the OTP received on your mobile or email
  • Step 6: Click ‘Validate OTP’
  • Step 7: Your Udyam Registration Number will be displayed

• Udyog Aadhar Download Process

  Visit the Udyam Registration portal and log in using your Udyam Registration Number (URN). Once logged in, you can easily download the Udyog Aadhar certificate from the dashboard. Here is a detailed process:

  • Step 1: Visit the official Udyam Registration portal
  • Step 2: Open the Download Section of Udyog Aadhaar From the homepage, navigate to the section 'Print/Verify,' and then select the option 'Print Udyog Aadhar'
  • Step 3: Enter Udyog Aadhaar Number and registered Mobile Number
  • Step 4: The OTP will be sent to the registered mobile number. Complete the OTP verification
  • Step 5: Get the Certificate when checked, your downloaded Udyog Aadhar certificate would be available in PDF format.

Case Study: Surge in UDYAM-Registered Micro Businesses and MSME Growth in India (FY22 vs FY20)

• Key Findings:

  • Micro Business Growth: UDYAM-registered micro businesses saw a 2.2x increase in registrations from FY20 to FY22, with Himachal Pradesh witnessing the highest growth rate. The surge was also notable in other states like Madhya Pradesh, Bihar, Uttarakhand, and Haryana.
  • Small and Medium Enterprises: While micro-enterprises saw a significant rise, small and medium-sized businesses showed a contrasting trend. The number of small business registrations grew notably in Bihar, while Jharkhand saw an increase in medium-sized business registrations.
  • Trends in Financing: The survey revealed a shift in lending trends. There was a noticeable drop in gold loans and a higher proportion of term loans among the 10,000 micro businesses surveyed. This suggests that these businesses are gradually integrating into mainstream lending channels, moving beyond informal credit sources.
  • Payment Delays and Business Optimism: Micro businesses faced increased payment delays compared to medium-sized businesses, signaling cash flow challenges. In contrast, small businesses exhibited optimism, particularly in Q3 2023, regarding demand, profitability, and capital investments, despite challenges like rising lending rates.
  • Employment Generation: Since its inception, the UDYAM platform has facilitated the creation of 1.6 times more employment opportunities in FY23 compared to FY20. States like Maharashtra, Tamil Nadu, and Uttar Pradesh remain the largest contributors to MSME registrations and employment generation. However, states like Karnataka, Madhya Pradesh, Telangana, and Andhra Pradesh have disproportionately contributed to employment, highlighting regional differences in MSME activity.

Comparative Analysis of MSME Registration Globally

This Section presents an inter-comparative analysis of the MSME sector in the Indo-Pacific-based QUAD nations: India, Australia, Japan, and the USA.

• Contribution to Employment

  • India has the largest number of MSME employees, with 40% of total employment coming from MSMEs.
  • The USA comes second with 46.4% of the total workforce employed in small businesses

• Contribution to GDP

  • Australia and Japan have the highest share of MSMEs in GDP, contributing 54% and 53%, respectively.
  • India's share in GDP is 35.5%, which is relatively lower compared to these countries.

• Contribution to Exports

  • Australia leads with the highest export contribution from MSMEs, with 59% of total exports being attributed to small businesses
  • India follows with 45.03%, while Japan has the lowest share of MSME exports at 21.4%.

• Summary of Comparative Findings

  • India: Largest number of MSMEs but lower share in total businesses compared to other QUAD members. MSMEs are the largest employers, but India's share in GDP (35.5%) and exports (45.03%) is smaller than Australia (54% GDP, 59% exports) and Japan (53% GDP, 21.4% exports)
  • Australia: High contribution to both GDP (54%) and exports (59%) from SMEs. Accounts for 99.8% of all businesses and employs 66% of the workforce
  • USA: Small businesses represent 99.9% of all businesses. Contributes 33% to exports and 44% to economic activity
  • Japan: Despite SMEs making up 99% of businesses, their share of exports is the smallest among the QUAD countries at 21.4%, while contributing 53% to GDP.

• Key Observations:

  • India’s MSMEs are crucial for employment but face challenges in increasing their share in GDP and exports.
  • Australia and Japan have stronger export contributions from MSMEs, with Australia leading in both GDP and exports.
  • India’s focus should be on enhancing the quality and international competitiveness of its MSMEs to increase their share in exports and GDP.