Udyam Registration

What is Udyam registration?

Micro, small, and medium-sized firms (MSMEs) are encouraged to expand throughout India through the government’s Udyog Aadhaar registration program, now called Udyam registration. On July 1, 2020, the Ministry of Micro, Small, and Medium Enterprises released Udyam Registration, also known as MSME Registration, to improve the registration process for MSMEs. This update also included modified MSME classification requirements. Udyam Registration, also known as MSME Registration, includes government permission, a Recognition Certificate, and a Unique Number. This certification is critical for proving the validity and operational viability of your small or medium-sized firm. Udyam Registration is carried out by the Ministry of Micro, Small, and Medium Enterprises (MSME), Government of India (GOI). 

Who can apply for Udyam registration?

This list consolidates all unique types of applicants eligible for Udyam Registration: –

Proprietorships, Hindu Undivided Families (HUF), Partnership Firms, One Person Companies (OPC), Private Limited Companies, Public Limited Companies, Producer Companies, Limited Liability Partnerships (LLP), Associations of Persons, Co-operative Societies, Startups, Business Owners, Entrepreneurs, Self Help Groups (SHGs) Trusts, and e-Commerce Businesses. 

Eligibility criteria for Udyam registration  

Udyam registration, designed to support Micro, Small, and Medium Enterprises (MSMEs) in India, categorizes businesses based on specific criteria. To qualify for Udyam registration, businesses must meet certain thresholds in terms of annual turnover and investment in plant and machinery or equipment. These thresholds differ for micro, small, and medium enterprises, ensuring that businesses of various scales receive appropriate recognition and support.

Business Types and Investment Criteria-

1. Micro Enterprises: – Annual Turnover: Up to ₹5 crores, Investment in Plant and Machinery/Equipment: Up to ₹1 crore
2. Small Enterprises: – Annual Turnover: Up to ₹50 crores, Investment in Plant and Machinery/Equipment: Up to ₹10 crores
3. Medium Enterprises: – Annual Turnover: Up to ₹250 crores, Investment in Plant and Machinery/Equipment: Up to ₹50 crores

Why would you need Udyam registration?

• It will be a permanent registration and basic identification number for an enterprise.  MSME Registration is paperless and based on self-declaration. 
• There will be no need for renewal of Registration. 
• Any number of activities including manufacturing or service or both may be specified or added in one Registration. 
• Preferential treatment in procurement processes increases chances of winning contracts.
• Easier access to bank loans without collateral or mortgage.
• The Udyam Registration may also help MSMEs in availing the benefits of Schemes of Ministry of MSMEs such as Credit Guarantee Scheme, Public Procurement Policy, additional edge in Government Tenders & Protection agai becomes eligible for priority sector lending from Bank
• 1% interest rate reduction on bank overdrafts (OD).
• Eligibility for various tax breaks leading to significant savings.
• Faster processing for government licenses and certificates.
• Access to tariff, tax, and capital subsidies.

What are Necessary Documents for Udyam Registration?

When it comes to the documentation required for the Online Udyam Registration process, it is essential to note that the application relies primarily on self-declaration. Consequently, there is no requirement to upload any additional documents during the registration. To streamline the process, applicants need to provide their 12-digit Aadhaar Number, PAN (Permanent Account Number), and business bank account details.

Required Information:

PAN Card Number: This refers to the Permanent Account Number (PAN) of the business or the proprietor.

Aadhaar Number:

1. For Proprietorship Firms: The Aadhaar card of the proprietor.
2. For Partnership Firms: The Aadhaar card of the managing partner.
3. For LLPs, Companies, Cooperative Societies, or Trusts: The Aadhaar card of the authorized signatory.

GST Number (if applicable): The GST number is mandatory only for enterprises that require GST registration.

By providing these details, applicants can efficiently complete the Udyam Registration process without the need for additional documentation, ensuring a smooth and hassle-free experience.

What are the steps to register for Udyam registration?

• Step 1: Visit the Udyam Registration Portal: Go to the official Udyam Registration website at udyamregistration.gov.in. Click on ‘For new entrepreneurs who are not registered yet as MSME or those with EM-II’. If you are switching from UAM, click on ‘For those already having registration as UAM’.
• Step 2: Aadhaar Verification: Enter your Aadhaar number and name exactly as it appears on your Aadhaar card. Click on ‘validate and generate OTP’ to initiate Aadhaar verification. Enter the OTP received on your registered mobile number and click on ‘validate’.
• Step 3: Aadhaar Requirements Based on Business Type: For a proprietorship firm, provide the proprietor’s Aadhaar. For a partnership firm, provide the managing partner’s Aadhaar. For a Hindu Undivided Family (HUF), provide the karta’s Aadhaar. For LLPs, cooperative societies, societies, or trusts, the authorised signatory should provide their GSTIN, PAN, and Aadhaar

• Step 4: Organisation Type and PAN Verification After Aadhaar validation, select your ‘type of organisation’ from the dropdown menu (e.g., proprietorship, partnership, LLP, private limited company). Enter your PAN for verification.
• Step 5: Fill in Business Details: Provide comprehensive details such as the name of the enterprise, location, office address, bank details, type of business (manufacturing or service), NIC code relevant to your business, employee strength, and other required information.
• Step 6: Optional Auto Registration: Applicants have the option to opt for auto registration on additional government portals such as Government e-Marketplace (GeM), TReDS, National Career Service, and the B2B portal of the National Small Industries Corporation (NSIC).
• Step 7: Add Multiple Activities: If your business engages in multiple activities in both manufacturing and service sectors, you can include all these activities under a single Udyam registration. There is no need to obtain multiple Udyam certificates.

Important Lesser-known facts about Udyam Register

• Automatic updates: By using information from the Income Tax and GST databases, the Udyam Registration system automatically updates business information, eliminating the need for manual updates.
• Dynamic QR Code: The Udyam Registration Certificate has a dynamic QR code that can be used to quickly verify the enterprise’s details by connecting it to the official Udyam Registration portal.
• No Renewal Requirement: Udyam Registration is a one-time process with long-term benefits because it does not require periodic renewals, in contrast to some other business registrations.
• Cross-site Integration: Businesses can choose to have their registration on other government portals, like the National Career Service site, TReDS (Trade Receivables Discounting System), and GeM (Government e-Marketplace), automatically complete during the registration process.
• Multi-Activity Inclusion: Companies with Manufacturing and Service Operations Multi-Activity Inclusion: Companies that engage in both manufacturing and service-related operations can streamline the registration procedure by combining all of their operations under a single Udyam Registration.
• Priority for Subsidies and Grants: The government gives registered businesses first dibs on a number of subsidies, grants, and other financial incentives.
• Sector-Specific Benefits: By enabling benefits designed specifically for the manufacturing, technology, and service sectors, Udyam Registration can boost prospects for expansion.
• Increased Credibility: Because an Udyam Registration denotes official acknowledgment and compliance, it can greatly increase an organization’s credibility with clients, investors, and suppliers.

FAQs

1. Is PAN required in order to register for Udyam?

Indeed, in order to register for Udyam, a Permanent Account Number (PAN) is required.

• Can I cancel my Udyam registration?

Indeed, the registrant (Udyam Registration) has the ability to terminate their registration at any moment.

• Are current companies eligible to file for Udyam Registration?

It is possible for current firms to apply for Udyam Registration. During the registration process (Udyam Registration), they must supply their current information.

• Is it possible to register for more than one Udyam activity at once? 

Yes, a single Udyam Registration can cover a variety of operations, including manufacturing and services. It is not required to register separately for various activities (Udyam Registration).

• How long is a certificate of Udyam Registration valid?

The certificate of Udyam Registration is valid indefinitely, until the registrant (Udyam) cancels it.

• Why is the NIC code significant, and what does it mean?

The National Industrial Classification (NIC) code is used to categorize economic activity and facilitate government understanding of the various economic sectors’ contributions. Udyam Registration must accurately classify the business activities in order to function.