Udyam Registration
Udyam Registration
Udyam registration is an e-certificate the government provides to the MSMEs in India. The Udyam registration replaced the Udyog Aadhaar Memorandum (UAM) registration. Though the Udyam registration is not mandatory, it is beneficial for the MSMEs to apply for this registration as it is required to avail of benefits that fall under the MSME category. These benefits help MSMEs to grow and boost their business across India.
The government provides the MSMEs with a unique identification number and an MSME recognition certificate when they obtain the Udyam registration. The Udyam registration certificate certifies that the enterprise is eligible to get government benefits provided to MSMEs. The validity of the Udyam registration is till the existence of the enterprise. The government is facilitating ease of doing business to MSMEs by giving a permanent registration, i.e. Udyam registration.
Why Udyam Registration is Important?
Here's why Udyam Registration is important and why businesses need it:
1. Formal Recognition
Udyam Registration provides formal recognition to small businesses as MSMEs.
This recognition is important for availing various benefits provided by the government specifically to MSMEs.
2. Access to Government Schemes
MSMEs registered under Udyam can access government schemes, subsidies, and incentives aimed at promoting small businesses.
These schemes include financial support, credit facilities, and technological assistance.
3. Credit Support
Udyam Registration facilitates easy access to credit from financial institutions and banks.
Banks and lending institutions often check for Udyam Registration status before approving loans to MSMEs.
4. Priority in Government Procurements
MSMEs with Udyam Registration receive preference in government procurement tenders.
Some contracts are specifically reserved for MSMEs, and having Udyam Registration increases the chances of winning such contracts.
5. Subsidies and Concessions
Businesses with Udyam Registration are eligible for various subsidies on power, taxes, and more.
They may also receive concessions on expenses related to setting up and running the business.
6. Protection Against Delayed Payments
Udyam-registered businesses have legal protection against delayed payments from buyers.
The Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006, safeguards the interests of MSMEs in terms of payment delays.
7. Global Recognition
Udyam Registration enhances the credibility and trustworthiness of the business, especially for international trade.
Many global partners prefer to collaborate with certified and recognized businesses.
8. Statutory Benefits
MSMEs registered under Udyam are eligible for various statutory benefits related to labor laws, taxation, and more.
These benefits can help businesses comply with legal requirements more easily.
9. Data Maintenance
Udyam Registration helps the government maintain a comprehensive database of MSMEs, which is useful for policy-making and promoting the sector.
Who can Apply for Udyam Registration?
Udyam Registration is open to a wide range of entities and individuals looking to establish micro, small, or medium-sized enterprises (MSMEs) in India.
Eligible applicants include:
Proprietorships: Individuals running a business on their own.
Hindu Undivided Family (HUF): A business entity formed by members of a Hindu Undivided Family.
Partnership Firm: Businesses owned and operated by multiple partners.
One Person Company (OPC): A single-member company.
Private Limited Company: A company with limited liability, typically with multiple shareholders.
Public Limited Company: A public limited company or any other limited liability company.
Producer Company: A company primarily engaged in producing, procuring, and marketing agricultural produce.
Limited Liability Partnership (LLP): A partnership with limited liability for its partners.
Any Association of Persons: Groups of individuals or entities coming together for a common purpose.
Co-operative Societies: Societies formed by individuals with common economic and social objectives.
Benefits of Udyam Registration
Udyam registration is a prerequisite to get the benefits of government schemes or programmes of the Ministry of MSME, such as the Credit Linked Capital Subsidy Scheme, Credit Guarantee Scheme, Public Procurement Policy, etc.
Udyam portal is integrated with the income tax portal, GST identification systems and government e-marketplace.
MSMEs having Udyam registration are eligible for priority sector lending from banks.
MSMEs are allowed Minimum Alternate Tax (MAT) credit to be carried forward for 15 years instead of 10 years.
Udyam registration helps to obtain cheaper bank loans as the interest rate is low, i.e. around 1 to 1.5%.
Documents Required for Udyam Registration
Below are the documents which an entrepreneur requires to apply for the Udyam registration:
PAN card number.
Aadhaar number.
GST number.
When the MSME is a proprietorship firm, the Aadhaar card number will be of the proprietor.
When it is a partnership firm, the Aadhaar card number will be of the managing partner.
If it is a Hindu Undivided Family (HUF), it will be of the Karta.
When the MSME is a Limited Liability Partnership (LLP), company, cooperative society or trust, the Aadhaar card number will be of the authorised signatory.
