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 Enterprises: when the total investment in plant, machinery, or equipment is less than one crore rupees and the total turnover is less than five crore rupees;
• A Small Enterprises: when the total investment in plant, machinery, or equipment is less than ten crore rupees and the total sales is less than fifty crore rupees; and
•  A Medium Enterprises: when the investment in plant, machinery, or equipment is less than fifty crore rupees and the sales is less than 250 crore rupees

A certificate will be issued online once the registration process has been completed. 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 wants to start a micro, small, or medium business can use the Udyam Registration portal to fill out a self-declaration form with no need to upload any paperwork, papers, certifications, or proof.

The New Udyam Registration Process’s Basic Features

• The MSME registration process is entirely online, without the use of paper, and is based on self-declaration.
• For registering an MSME, no paperwork or proof are necessary; merely an Aadhaar number would suffice.
• PAN and GST-related information on investment and turnover of businesses would be automatically retrieved from government databases.
• The online system will be fully connected with the systems used by the IRS and the GSTN.
• 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. In one Registration, however, any number of activities, including production, service, or both, may be stated or added.

The following are some of the advantages of registering for Udyam:

• Registration with Udyam facilitates the acquisition of government contracts.
• Bank loans become cheaper as a result of the Udyam since the interest rate is very low (up to 1.5 percent lower than conventional loans).
• Udyam is eligible for a number of tax breaks.
• 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 licences 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:

• The registration form will be available on the Udyam Registration portal.
• There will be no charge for registering for Udyam.
• Udyam Registration will require an Aadhaar number.
• In the case of a proprietorship firm, the Aadhaar number will be that of the proprietor, the controlling partner in the case of a partnership firm, and a Karta in the case of a Hindu Undivided Family.
• The organisation or its authorised signatory must submit its GSTIN and PAN, as well as its Aadhaar number, in the case of a Company, a Limited Liability Partnership, a Cooperative Society, a Society, or a Trust.
• If an enterprise is properly registered as an Udyam with a PAN, any missing information from earlier years when it did not have a PAN must be self-declared.
• There shall be no more than one Udyam Registration per business:
• In one Udyam Registration, any number of operations, including production, service, or both, may 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

• On or after July 1, 2020, all existing firms registered under EM–Part-II or UAM must re-register on the Udyam Registration portal.
• 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 March 31, 2021.

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.

Suggested Read: Benefits of Udyam Registration