Udyam Registration Procedure & MSMEs’ Benefits

The Indian government is steadfastly promoting entrepreneurship, and Udyam actively contributes to this goal of fostering entrepreneurial endeavors. It gives new organizations and businesses a hassle-free way to officially register their business as well as the chance to do so through a single-window system.

If you are starting a new business or already have one, the Udyam Registration might be the simplest way to get it off the ground and give you access to financial aid, tax benefits, official business recognition, and much more.  

What Is Udyam MSME Registration?

Udyam registration is a registration process for Micro, Small and Medium Enterprises (MSMEs) in India, which replaced the earlier system of Udyog Aadhaar registration. Udyam registration is entirely online, and the process is free of cost.

Under this registration, MSMEs receive a unique identification number called the Udyam Registration Number (URN). The registration process is entirely paperless and requires only basic details such as Aadhar number, PAN number, and other business-related information.

Udyam registration provides various benefits to MSMEs such as easier access to credit, lower interest rates on loans, government subsidies, and schemes, access to tenders and other government procurement opportunities, among others. Udyam registration also enables MSMEs to compete in domestic and international markets and expand their business operations.

Step-by-Step Procedure for Registering for Udyam

The following are the step-by-step procedures for registering for Udyam:

  1. Visit the Udyam Registration portal 
  2. The “For New Entrepreneurs who are not yet registered as MSME” button should be clicked.
  3. Enter your 12-digit Aadhaar number and the name as mentioned on the Aadhaar card.
  4. Click on the “Validate & Generate OTP” button.
  5. On the “Validate OTP” button, enter the OTP that was sent to your registered mobile number.
  6. Enter your Personal details, such as name, gender, category, and others.
  7. Enter your Business details, such as PAN number, business name, and address.
  8. Enter your Bank account details, including account number and IFSC code.
  9. Click on the “Submit” button to complete the registration process.
  10. Upon successful registration, you will receive the Udyam Registration Number (URN) on your registered email address and mobile number.

Business Classification According to Udyam

Under the Udyam registration process, businesses are classified based on their investment in plant and machinery or equipment and annual turnover. The following is the classification of businesses under the Udyam:

  1. Micro Enterprise – A business with investment in plant and machinery or equipment up to Rs. 1 crore and an annual turnover of up to Rs. 5 crore.
  2. Small Enterprise – A business with investment in plant and machinery or equipment up to Rs. 10 crore and an annual turnover of up to Rs. 50 crore.
  3. Medium Enterprise – A business with investment in plant and machinery or equipment up to Rs. 50 crore and an annual turnover of up to Rs. 250 crore.

To take advantage of the perks and programmes the government offers for MSMEs. The business must be properly classified according to the investment and turnover criteria.

Benefits Of Registering With Udyam

The following are the benefits of Udyam registration for MSMEs:

  1. Access to government schemes and subsidies – MSMEs registered under Udyam can avail of various government schemes and subsidies, such as credit guarantee scheme, technology upgradation, and marketing support, among others.
  2. Lower interest rates on loans – Banks and financial institutions offer lower interest rates on loans to Udyam-registered MSMEs as compared to non-registered businesses.
  3. Easier access to credit – Udyam registration provides MSMEs with a unique identification number, making it easier for them to obtain credit and loans from banks and financial institutions.
  4. Protection against delayed payments – Udyam-registered MSMEs can seek help from the government in case of delayed payments from buyers or customers.
  5. Participation in government tenders – Udyam registration allows MSMEs to participate in government tenders and other procurement opportunities.
  6. Priority sector lending – Banks are mandated to provide a certain percentage of their loans to the priority sector, which includes MSMEs. Udyam-registered MSMEs can avail of this benefit.
  7. Recognition – Udyam registration provides recognition to MSMEs, helping them establish their credibility and reputation in the market.

Overall, Udyam registration provides various benefits to MSMEs, making it easier for them to operate, grow, and compete in the market.

Suggested Read: Udyam Registration Online

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