The government has set up a system to make it easier for MSMEs to register. Udyam will be the name of the company that will handle this process, and the registration process will be called “Udyam Registration” Following registration, you will be granted a permanent registration number.
A business is categorized as a micro, small, or medium business if it meets the following criteria:
- a micro-enterprise with a plant and machinery or equipment investment of less than one crore rupees and a turnover of less than five crore rupees.
- a small business with a plant and machinery or equipment investment of less than ten crore rupees and a turnover of less than fifty crore rupees, and
- a medium-sized company with a turnover of not more than 250 crore rupees and an investment in plant and machinery or equipment of not more than fifty crore rupees.
Once the registration process is completed, a certificate will be issued online. This certificate will include a dynamic QR code that can be used to access the Portal’s webpage as well as information about the company. Registration will not be required to be renewed. The registration procedure is completely free.
The process will be aided by single-window systems in Champions Control Rooms and DICs.
Anyone who wishes to start a micro, small, or medium business can fill out a self-declaration form on the Udyam Registration portal without having to provide any documentation, papers, certifications, or proof.
The New Udyam Registration Process’s Basic Features:
- The MSME registration procedure is purely electronic, with no paper involved, and is based on self-declaration.
- For registering an MSME, no paperwork or proof are necessary; merely an Aadhaar number would suffice.
- Information on business investment and turnover, as well as PAN and GST-related information, will be automatically obtained from government databases.
- The online system will be fully connected with the systems used by the IRS and the GSTN.
- From April 1, 2021, PAN and GSTIN will be required.
- Former EM-II or UAM registrations, as well as any other registration issued by the Ministry of MSME, must be re-registered under Udyam Registration.
- There may be no more than one Udyam Registration per business. However, any number of activities, including production, service, or both, maybe be indicated or added to a single Registration.
Some of the benefits of registering with Udyam are as follows:
- Registration with Udyam makes it easier to get government contracts.
- Because the interest rate is so low, bank loans become more affordable as a result of the Udyam (up to 1.5 percent lower than conventional loans).
- A number of tax incentives are available to Udyam.
- It is easier to obtain permits, approvals, and registrations, regardless of the field of the company, because businesses registered with Udyam are given priority for government licenses and certification.
- They are able to obtain credit quickly and at reduced interest rates.
- Tariff, tax, and capital benefits are all available to registered Udyams.
- Once registered, the cost of obtaining a patent or establishing an industry is reduced due to the numerous discounts and concessions available.
Procedure for New Registration:
- On the Udyam Registration portal, the registration form will be available.
- An Aadhaar number will be required for Udyam registration.
- In the event of a proprietorship firm, the proprietor’s Aadhaar number will be used, while in the case of a partnership firm, the controlling partner’s number will be used, and in the case of a Hindu Undivided Family, a Karta number will be used (HUF).
- In the case of a business, a limited liability partnership, a cooperative society, a society, or a trust, the entity or its authorized signatory must supply their GSTIN and PAN, as well as their Aadhaar number.
- Any information gaps from earlier years when the business was not registered as an Udyam with a PAN must be self-declared if the business is correctly registered as an Udyam with a PAN.
- No business may register for more than one Udyam.
- In a single Udyam Registration, any number of operations, including production, service, or both, can be identified or added.
- Anyone who willfully misrepresents or tries to suppress self-declared facts and figures in the Udyam Registration or update procedure will be subject to the punishment provided in section 27 of the Act.
Updates to existing MSMEs’ Udyam registrations:
- All present enterprises registered under EM–Part-II or UAM must re-register on the Udyam Registration portal on or after July 1, 2020.
- This notification will reclassify all businesses registered until June 30, 2020.
- Existing businesses that were registered before June 30, 2020, will only be valid until Dec 31, 2021.
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MSME contributes significantly to India’s economic growth through its contributions to production, exports, and employment. They encourage rural and backward areas to industrialize, therefore minimizing regional imbalances. The government’s many initiatives and incentives for MSMEs encourage entrepreneurs to create and expand their business concepts.