The Udyam registration procedure for MSMEs was just recently launched by the Indian government. The Udyog Aadhaar registration, which was formerly utilised to register MSMEs, has been replaced by this new registration procedure. The Udyam registration platform must now be used by existing MSMEs who were previously registered under the Udyog Aadhaar Registration scheme.
For already-existing MSMEs having Udyog Aadhaar, the Udyam registration procedure is quite straightforward. Using their Udyog Aadhaar number, MSMEs can access the Udyam registration portal and sign in. They can amend their information and submit the Udyam registration application after logging in. After the relevant authorities have verified the application, the MSME will be given an Udyam registration certificate with a special Udyam registration number (URN).
The Udyam registration process is aimed at simplifying the registration process for MSMEs and providing them with various benefits and incentives. The registration process is entirely online, and it is free of cost. It also offers additional benefits such as ease of availing government schemes and subsidies, preference in government procurement, and access to credit facilities from banks and financial institutions.
Udyam Registration: An Introduction and Step-by-Step Application Process
The Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006, recognizes Micro, Small, and Medium Enterprises (MSMEs) as important contributors to India’s economic growth. To streamline and promote the growth of MSMEs, the Government of India has introduced the Udyam registration process. In this article, we will explain what Udyam registration is and how to apply for it.
What is Udyam Registration?
Udyam registration is a unique identification number provided to MSMEs that register under the MSME Ministry. It replaces the previous Udyog Aadhaar Memorandum (UAM) process and is now mandatory for all MSMEs to register under Udyam. The Udyam registration process is entirely online and can be done without any fees.
Eligibility Criteria for Udyam Registration
The following entities are eligible to apply for Udyam registration:
- Sole proprietorships
- Partnership firms
- One-person companies
- Limited Liability Partnerships (LLPs)
- Private Limited Companies
- Co-operative Societies
- Hindu Undivided Family (HUF)
The entity’s annual turnover and investment in plant and machinery or equipment are the criteria used to determine the classification of MSMEs. A micro-enterprise is one where the investment does not exceed Rs. 1 crore and the turnover does not exceed Rs. 5 crore. A small enterprise is one where the investment does not exceed Rs. 10 crores and the turnover does not exceed Rs. 50 crores. A medium enterprise is one where the investment does not exceed Rs. 50 crores, and the turnover does not exceed Rs. 250 crores.
Steps to Apply for Udyam Registration
Follow the steps given below to apply for Udyam registration:
Step 1: Visit the official website of Udyam Registration.
Step 2: Enter your Aadhaar number and name as per Aadhaar.
Step 3: Fill in the necessary details such as the name of the enterprise, PAN number, email address, and mobile number.
Step 4: Provide the enterprise’s address and bank account details.
Step 5: Enter the enterprise’s major activity, NIC code, and investment details.
Step 6: Verify the details provided and submit the application.
Step 7: Upon submission, an acknowledgment number will be generated.
Step 8: The authorities will verify the application, and the Udyam registration certificate will be issued.
Importance of Udyam Registration in Accessing Credit Facilities from Banks and Financial Institutions
Access to credit facilities is crucial for the growth and development of MSMEs. However, obtaining credit can be challenging for MSMEs due to various factors such as lack of collateral, low credit scores, and lack of financial literacy. Udyam registration can play a vital role in addressing these challenges and enabling MSMEs to access credit facilities from banks and financial institutions.
Udyam registration provides MSMEs with a unique Udyam registration number (URN), which is recognized by all government agencies and financial institutions. The URN serves as proof of the MSME’s existence and provides credibility to the business. Banks and financial institutions consider Udyam registration as a vital parameter while evaluating loan applications from MSMEs.
Moreover, Udyam registration provides various incentives and benefits to MSMEs, which can help them in obtaining credit facilities. The Udyam registration certificate provides details about the MSME’s operations, turnover, and other essential information that can help banks and financial institutions evaluate the creditworthiness of the business.
Suggested Read- Update Udyam Certificate
Conclusion
In conclusion, Udyam registration is an essential step for existing MSMEs with Udyog Aadhaar to access various benefits and incentives provided by the government. The registration process is straightforward, and it can help MSMEs in accessing credit facilities from banks and financial institutions. MSMEs must consider Udyam registration as a crucial step towards growth and development, and take advantage of the benefits it offers.
