What Is Udyam Registration-Everything You Need To Know!

Any person or entity categorized as a micro, small, or medium enterprise (MSME) may apply online for a Udyam Registration Number.

Registration Process

The registration process for Udyam registration is online. An application is to be made on the Government portal – https://udyamregistration.gov.in/Government-India/Ministry-MSME-registration.html.

The registration process involves self-declaration by the person or entity.

The applicant must possess the Aadhaar Number, PAN, and GSTIN numbers to obtain the Udyam Registration Number.

The Aadhaar number shall be of:

• the proprietor in the case of a proprietorship firm
• the managing partner in the case of a partnership firm
• the Karta in the case of a Hindu Undivided Family (HUF)
• the authorized signatory in case of a Company or a Limited Liability Partnership or a Cooperative Society or a Society or a Trust

There is no requirement of uploading any documents, certificates, or proofs. Further, there are no processing fees or application fees for Udyam Registration.

After the completion of registration, a permanent identification number and an e-certificate will be allotted to the applicant.

They are known as the ‘Udyam Registration Number’ and ‘Udyam Registration Certificate,’ respectively.

The Udyam Registration Number is generally allotted within 3-5 days after filing the application.

Once obtained, the Udyam Registration number is not required to be renewed by the enterprise.

In other words, it is a permanent number.

Eligibility Criteria for Udyam Registration

Any micro, small or medium enterprise can obtain the Udyam Registration. The size of the investment in plant and machinery and equipment and the business turnover determines whether an enterprise is classified as a micro, small, or medium enterprise. The thresholds are as follows:

Benefits of Udyam Registration

Udyam Registration provides several benefits to the MSMEs as follows:

i.                 Procuring Government tenders

Udyam registered entities get preference in procuring Government tenders and contracts over other entities. Procuring certain licenses/certificates may also be easier for such an entity.

ii.                Collateral-free and Concessional Business Loans

One of the major benefits of Udyam Registration for MSMEs is that they are eligible for business loans or overdraft facilities without providing any collateral under The Credit Guarantee Trust Fund Scheme (CGS) of the Government. This means that an MSME can get a loan for business without being concerned about the security to be provided to the lender.

They are also eligible for loans at a concessional interest rate. The reduced business loan interest rates leave more working capital in the hands of the MSME, thus improving their liquidity.

iii.               Relief in Statutory Fees and Taxes

MSMEs registered under Udyam Registration get relief in the payment for trademark and patent registration fees, reimbursement of the ISO certification charges made to obtain an ISO certificate, and other statutory dues. Besides, they are taxed at beneficial tax rates on certain income earned.

iv.              Concession in Electricity Charges

Electricity bills can be substantial in the case of captive business units. Udyam registered MSMEs are entitled to a discount on the electricity bills, which in turn help them to save their funds.

Conclusion

Micro, small, or medium enterprises have multiple benefits if they have a Udyam Registration. The most favorable amongst them is the availability of collateral-free business loans at a concessional rate of interest. Entities can use the business loan EMI calculator to determine the EMI payable monthly.