Benefits of Udyam registration for MSMEs

Supporting MSMEs can have a far-reaching impact on the overall economic progress of a country as they create employment opportunities, drive industrial growth, and increase exports. The Udyam registration launched in July 2020 is an initiative by the Government of India. It seeks to provide MSMEs with various benefits that they can use to grow and thrive.

What is Udyam registration?

In simple terms, the Udyam registration is a mandatory certification from the Ministry of Micro, Small and Medium Enterprises that MSMEs receive upon signing up on the official government portal. With an MSME Udyam Aadhaar registration, the enterprise receives a unique twelve-digit Udyam registration number (URN) that they can use to avail of various government subsidies, schemes, and incentives.

In order to be eligible for the Udyam Aadhaar, enterprises must fit into the classification outlined by the Ministry of Micro, Small and Medium Enterprises. This is on the basis of their investment (in plant and machinery or equipment) and turnover. The criteria are in the table below:

Furthermore, the enterprise must be a legal entity operating as an MSME in the manufacturing or service sectors. Although in an effort to offer government benefits to a wider category of enterprises, wholesalers and retailers are eligible to apply as well.

The Udyam Aadhaar registration process is fully online and paperless. Since the process is based on self-declaration, there is also no need to furnish any documents or proof at the time of registering an MSME.

The only detail required is the Aadhaar number of the enterprise’s owner or authorised signatory. It is also mandatory to have PAN and GSTIN to register for the Udyam Aadhaar certificate.

Other basic details that you will need at the time of registration include:

• Business address proof in the form of property tax receipts or utility (telephone, electricity, etc.) bills
• Bank account details

Registering an MSME to receive benefits of udyam aadhar is an easy process that is completely free of cost thanks to the user-friendly government portal and its ‘single window’ system. Below are the steps to follow if you wish to register a new enterprise that is yet unregistered as an MSME:

1. On the official Udyam registration website (https://udyamregistration.gov.in/), select the ‘For new entrepreneurs who are not registered yet as MSME or those with EM-II’ button.
2. Provide the Aadhaar number and enterprise owner’s name on the next page.
3. Use the OTP received on the linked mobile number to validate the Aadhaar number.
4. Provide the required enterprise details as prompted, including its name, type, location, and PAN.
5. Fill in the bank account details, such as the account number and IFSC code.
6. Enter the NIC code, and other necessary details pertaining to the main business activity of the enterprise.
7. Verify the details and submit the application.

You will receive the e-certificate with the twelve-digit URN and a unique QR code that you can use to verify the Udyam registration and access enterprise details. Keep in mind that this certification is permanent, meaning you will never have to apply for Udyam Aadhaar renewal or re registration.

Udyam registration is now mandatory for all MSMEs. It provides multiple benefits to help MSMEs succeed, some of which are:

• Collateral-free loans from banks and financial institutions and subsidised interest rates
• Simplified process of obtaining licences, permits, registrations, and approvals
• Discounts of up to 50% on trademark and patent registration fees
• Reimbursement of ISO certification fees
• Waiver of government security deposits when attempting to procure tenders
• Tax exemptions
• Concessions on water and electricity bills
• Protection against delayed payments against provided goods or services

Additional Read: Difference between Udyog Aadhaar and Udyam Aadhaar