In July 2020, the Ministry of Micro, Small, and Medium Enterprises introduced Udyam Registration, replacing the former UDYOG AADHAAR process. Before, registering involved innumerable documents that had to be dealt with, which made the process quite dilatory. In comparison with its predecessor, the Udyam Registration process has been simplified to some extent by the ministry. The purpose of this article is to provide an overview and advantages of Udyam Registration for SMEs.
What is Udyam Registration?
Newbies might wonder what Udyam Registration is and what changes have been made since the formal process has been removed? We’ve got you covered, don’t worry.
Udyam Registration is a government registration process for MSMEs that provides them with a unique identity number and a certificate. It was established for the sole purpose of providing benefits to MSMEs registered under Udyam Registration. The benefits that Udyam Registration can offer a medium, small, or micro-enterprise should be considered if you own one.
Eligibility criteria
- Ideally, the firm should be categorized as a micro, small, or medium business.
- Udyam Registration benefits are not available to microenterprises with investments exceeding $1 million.
- It is not allowed for small enterprises to invest more than 10 crores, and medium enterprises must not invest more than 50 crores.
- An MSME’s annual turnover determines the benefits it receives from Udyam Registration.
- Micro-Enterprises: Turnover up to ₹5 Crores.
- Small Enterprises: (₹5-₹75 Crores).
- Medium Enterprises: Turnover up to ₹250 Crores
Udyam Registration benefits
MSMEs are entitled to the following Udyam Registration benefits:
- Eligible for collateral-free loans The Government of India offers collateral-free loans up to two crores to MSME entrepreneurs through its “CTGSME Collateral Free Finance” scheme. A Udyam-registered business with an annual turnover of 250 crores is eligible for this scheme. Alternatively, the scheme can be accessed by investing 50 crores in plant and machinery.
- MSME enterprises registered with Udyam are exempt from direct taxation in their initial year of operation. The type of business activity determines the type of tax.
- Licenses, approvals, and registrations Udyam Registered MSMEs are given preference by the government for various licenses and registrations.
- Under the interest subvention scheme, banks must offer 2% interest rate subsidies to Udyam Registered enterprises on their fresh and incremental loans.
- A concession by the government. Companies registered as MSME are eligible for government concessions on electricity bills.
- Enterprises registered as MSME can avail a 50% discount on trademark and patent fees using their MSME/Udyog Aadhaar/SSI registrations. An official document.
- 1% interest rate exemption for MSME businesses Registered MSME businesses are entitled to a 1% interest rate exemption for their overdrafts. Banks have different policies.
- ISO Certification costs can be claimed ISO certification costs can be quite expensive. Nevertheless, the government reimburses MSMEs seeking ISO 9000/ISO 14001 certifications. The reimbursement limit is 75% of the cost incurred, up to a maximum of 75,000 Indian rupees.
- To benefit from the scheme, the enterprise must be registered through Udyog Aadhaar Memorandum (UAM). Scheme elements include:
- Vendor Development Programmes.
- National and International Workshops on Packaging, Marketing, Public Procurement.
- Reimbursement on Bar Code.
- Under the Aatmnirbhar Scheme, SMEs registered as MSMEs can claim registration costs and stamp duty waivers.
- Payments to Micro, Small, and Medium Enterprises may be delayed under the Micro, Small, and Medium Enterprise Development Act of 2006 (MSMED 2006).
- Micro, Small, and Medium-sized enterprises are eligible for 75% reimbursement of a) Registration Fee and b) Annual Recurring Fee for the first 3 years for Bar Code use in order to boost their marketing competitiveness.
As a result of registration, MSMEs will be entitled to many benefits, including those listed above.
Documents required for Udyam Registration
The following documents are required for Udyam Registration:
- PAN of the Enterprise
- Mobile/Phone Number
- Fax Number
- Aadhaar Card of the Entrepreneur
- GST Certificate
- Entrepreneur’s Aadhaar
- Email-Address
- Social Category of the Entrepreneur
- Number of Employees (Male and Female Specified)
- Nature of the Business
- Recent Audited Financial Statements
- Memorandum of Association
- Article of association
- Copy of passbook
- Date of commencement of Business.
- Partnership deed, if any
- Company’s registered documents
Steps to Register as MSME
The following steps will guide you through the registration process for Udyam if your enterprise hasn’t been registered as an MSME yet:
Step 1: Visit the Udyam Registration portal
Step 2: Fill out all the mandatory details like Applicant’s Name, Mobile Number, Email-id, Bank details, Date of commencement of business, etc.
Step 3: Upload the front and back sides of your PAN Card.
Step 4: After filling out the details, select “Agree to Terms and Conditions”.
Step 5: Enter the Verification Code.
Step 6: Double-check the details and proceed to submit the application.
Step 7: After submission of the form, you will be redirected to the payment gateway.
Step 8: Post payment process, E-Registration Certificate will be sent to your registered email id.
Conclusion
We hope you read the entire article covering the benefits of MSME Udyam registration. If you own a small or medium business, you should register your business as soon as possible to take advantage of all the benefits that Udyam Registration offers. The process is hassle-free and paper-free.