MSME Udyam Registration in India

MSME Udyam Registration can be said as a digital identity for Indian entrepreneurs. MSME stands for Micro, Small, and Medium Enterprises. You can do the online registration through the Official Udyam Portal. Then, you will get a unique 19-digit number after registration. This simplifies to get access of bank loans and reduced interest rates. It also gives the access of government tender benefits. This protects against delayed payment. In this blog, you will get a guidance on the MSME Udyam Registration.

What is MSME Udyam Registration?

MSME Udyam Registration refers to a free, digital and self-declaration process. The ministry of MSME has introduced this process in India. The registration framework is administered under the authority of the Ministry of Micro, Small and Medium Enterprises. The process focuses on classifying and registering these businesses in India. This helps to simplify the registration process. It also gives several benefits and opportunities for business growth. The government initiative has replaced the old MSME Udyog Aadhaar registration process.

Who can apply for an MSME Udyam Registration in India?

Here are the entities that can apply for MSME registration in India:

a) Trusts

b) Limited Liability Partnerships (LLPs)

c) One Person Companies (OPCs)

d) Private and Public Limited Companies

e) Individuals, entrepreneurs, startups, and business owners

f) Sole Proprietorship

g) Self Help Groups (SHGs)

h) Hindu Undivided Families (HUFs)

i) Partnership firm

j) Co-operative societies

Who are Eligible for the MSME Udyam Registration Process?

Here are the eligibility criteria for MSME Udyam registration process in India:

a) Micro Enterprises

A Micro enterprise has an investment of up to Rs. 1 crore in machinery, plant, or equipment. Their annual turnover is less than Rs. 5 crore.

b) Small Enterprises

A small enterprise are eligible for MSME udyam registration process. It applies if they have an investment of not more than Rs. 10 crore in machinery, plant, or equipment. Their annual turnover is below Rs. 50 crore.

c) Medium Enterprises

A medium enterprise has an investment amount of not more than Rs. 50 Crore. Their annual turnover is not more than Rs. 250 crore.

Thus, businesses are eligible for this registration if they meet their respective category. These include specified investment and turnover limits.

Documents Required for MSME Udyam Registration Process

Here are the key documents:

Aadhaar Number

b) PAN Number

c) Supporting documents confirming the business address, including utility bills, tenancy agreements, or ownership records

d) Bank Account Number

e) Business Activity Details

f) National Industrial Classification (NIC) 2-Digit Code

g) Investment in Plant and Machinery or Equipment

h) Details of Turnover

i) Partnership deed (If required)

j) Sales and Purchase Bills

k) Licenses and Bills of Purchased Machinery

h) GST Registration (If Required)

The GST registration is not required for MSME registration. It is needed only if the business activities meet the GST rules. In case that happens, they must give their GSTIN to get it. GSTIN denotes the Goods and Services Tax Identification Number assigned under GST law.

How to Get an MSME Udyam Registration in India?

Here are the steps:

Step 1: Visit the official portal

Firstly, you must go to the official Udyam Registration Portal. This will allow you to apply for the registration.

Step 2: New Entrepreneurs option

Opt for the new entrepreneur or EM-II registration option if your business is not yet registered as an MSME. On the homepage, you will get this option.  

Step 3: Aadhaar and OTP

As a user, you need to put your Aadhaar number and the name of the entrepreneur. Next, you need to click on the "Validate and Generate OTP" option.  

Step 4: Validation of the OTP

A One Time Password will be sent to your registered mobile number. OTP means One-time password. Your mobile number needs to be connected to your Aadhaar card. Then, you must put the OTP.

Step 5: PAN Verification

Once an Aadhaar verification is complete, you need to visit the PAN verification page. Then, give the required details, such as:

a) Type of Organization

b) PAN Number

c) ITR Details

d) GSTIN Status, and so on.

Next, you need to click on the "Validate" option.

Step 6: Form Filling

This step allows you to fill out the Udyam Registration Application Form.

Here are the required details:

a) Enterprise Name

b) Name of the Entrepreneurs

c) Registered Mobile Number

d) Email Id

e) Type of Organization

f) Plant or Unit Location and Enterprise Address

g) Bank Details

h) Main Business Activity like Manufacturing or Service

i) NIC Code (2-digit)

j) Number of Employees, etc.

Step 7: Investment/Turnover and Submit

As a user, you need to give information about investment in plant and machinery or equipment. You must also give annual turnover details. Then, give a tick mark on the declaration checkbox. Next, click on submit to get the final OTP.

Step 8: Final OTP and Registration Certificate

This is the final step of this registration. In this step, you need to put the final OTP (One-time password). Then, submit the form. Once submitted, you will get the Udyam e-registration certificate. The certificate will be given to you through an email ID.

Key Benefits of MSME Udyam Registration

Listed below are some key benefits of MSME Udyam registration in India:

1) Access to Schemes

Once registered, MSME has the right to access several government schemes. They can also access various government programs. These are offered by the Ministry of MSME. The schemes can include:

a) Credit Linked Capital Subsidy

b) Credit Guarantee

c) Public Procurement Policy, and so on.

Thus, it also gives them financial support for business growth and incentives.

2) Increase Credibility

MSME registration supports business growth for customers, investors, and partners.

3) Simplified Integration

The official Udyam registration portal simply works with other important government systems. This includes:

a) Income tax portal

b) GST identification systems

c) Government e-marketplace, etc

Thus, it simplifies the regulatory compliance for businesses. This also helps MSME's to handle their financial and tax-related things. This also eliminates the administrative tasks for businesses. The Udyam portal works well with other important government systems.

4) Collateral Free Loans

Registered MSME's has the right to access collateral-free loans. They also get credit at lower interest rates. This gives them the benefit of financial access.

5) Priority Sector Lending

MSMEs with Udyam registration can get priority loans from banks. This helps them borrow money more easily and on better terms. It helps to support their growth and investment plans.

6) Extended MAT Credit

MSMEs with Udyam registration has the benefit to use their Minimum Alternate Tax (MAT) credit for 15 years. This is an increase from the previous ten years. This gives them extra tax benefits. It also helps them plan their finances better and grow in the long run.

7) Procurement Advantage

MSMEs with Udyam Registration receive special benefits in government buying. This helps to increase their chances of getting contracts.

Conclusion

MSME Udyam Registration is an online process for small to medium businesses in India. It gives a lifetime validity without the need for renewal. Once registered, you can get the essential benefits. The benefits can include collateral-free bank loans and protection against delayed payments. You can also get the benefits of priority for government contracts. This supports business growth. It also helps businesses to maintain compliance and credibility. If you need help with it, contact Online Legal India.

FAQ

Q1. Is MSME Udyam Registration compulsory in India?

No, MSME Udyam Registration is not officially compulsory to operate a business in India. Still, it is beneficial for accessing government schemes and various incentives. It also gives priority to sector lending. The registration process is free and paperless. The process depends on self-declaration. Businesses can secure subsidies. It also helps to protect against delayed payments.

Q2. What is the Validity of MSME Registration in India?

The MSME registration remains valid for a lifetime in India. There is no requirement of renewal. The registration occurs, when the business follows the criteria of Micro, Small, or Medium enterprise. This includes investment and turnover limits.

Q3. Where can I apply for MSME registration in India?

You can do the MSME registration from the official Udyam Registration portal. This is the government portal for this registration.

Disclaimer

This article is for informational purposes only and does not constitute legal advice. Online Legal India is a digital platform. If you require legal assistance, we strongly recommend consulting a qualified lawyer or law firm.