What is Udyam registration?
Udyam registration is the process of registering a business as an MSME (Micro, Small, and Medium Enterprises) with the Ministry of Micro, Small and Medium Enterprises (MSME) of the Government of India.
Previously, MSMEs were registered under the Udyog Aadhaar Memorandum (UAM) system, but now they are registered under the Udyam registration portal. Udyam registration provides a unique identification number to MSMEs and is a simple and easy process.
The registration process involves providing basic information about the MSME, such as its name, address, type of organization, and bank details. The process can be completed online, and there is no registration fee.
Once the registration is complete, the MSME will receive a Udyam Registration Certificate. This certificate contains a unique Udyam Registration Number (URN) and other relevant information about the MSME. The URN is used by the MSME to avail of benefits offered by the government, such as subsidies, incentives, and loans.
It is important to note that MSMEs must register on the Udyam portal if they wish to avail of government schemes and benefits. Additionally, MSMEs that were registered under the UAM system must also register under the Udyam portal.
Complete benefits of udyam registration
Here are the detailed benefits of Udyam registration:
- Legal recognition: Udyam registration provides legal recognition to MSMEs, which is important for the growth and development of any business. The registration provides a unique identification number that can be used by the MSME to avail of benefits offered by the government. The registration certificate can also be used as proof of legal recognition for the MSME.
- Access to government schemes: The government offers a variety of schemes for MSMEs, such as subsidies, incentives, and loans. Udyam registration is necessary to avail of these schemes. MSMEs that are registered under Udyam can access various government schemes and initiatives such as the Prime Minister’s Employment Generation Programme, Credit Guarantee Scheme, and more.
- Banking benefits: Banks offer various benefits to MSMEs, such as low-interest rates, collateral-free loans, and credit facilities. Udyam registration makes it easier for MSMEs to access these benefits. Banks also consider Udyam registration as a credible proof of existence, which can help MSMEs in obtaining loans and other banking facilities.
- Marketability: Udyam registration provides credibility to the MSME and can help it attract more customers. It demonstrates that the MSME is recognized by the government and is compliant with regulations. This can increase the visibility and reputation of the MSME, leading to better marketability and brand recognition.
- Protection against delayed payments: MSMEs often face problems with delayed payments from buyers or clients. Udyam registration provides protection against delayed payments through the MSME Samadhaan portal. The portal allows MSMEs to file complaints against buyers or clients who have defaulted on payments.
- Statutory compliances: Udyam registration helps the MSME comply with statutory requirements, such as filing of GST and income tax returns, as well as other regulatory requirements. MSMEs that are registered under Udyam can easily comply with various statutory requirements as they are recognized by the government.
- Priority sector lending: Banks are required to lend a certain percentage of their loans to the priority sector, which includes MSMEs. Udyam registration makes it easier for MSMEs to access these loans. Banks also offer special lending rates to MSMEs that are registered under Udyam.
- Tax benefits: MSMEs that are registered under Udyam can avail of various tax benefits, such as exemption from certain taxes and other financial benefits. The government offers various tax benefits to MSMEs that are registered under Udyam, such as a reduction in the rate of interest on delayed payment of GST.
- Reduced fees: MSMEs that are registered under Udyam can enjoy reduced fees for various registrations, such as trademarks and patents. The government offers various fee reductions to MSMEs that are registered under Udyam, making it easier for them to protect their intellectual property.
- Easy access to information: MSMEs that are registered under Udyam can access information about various government schemes, policies, and initiatives that are relevant to them. This information can be accessed through the Udyam portal, making it easier for MSMEs to stay updated on various government initiatives.
- Access to credit: Udyam registration provides MSMEs with a credit rating that can help them access credit from banks and financial institutions. The credit rating is based on the MSME’s credit history, financial performance, and other factors.
- Apply for government tenders: Udyam registration is a requirement for MSMEs to apply for government tenders. The government offers various tenders to MSMEs that are registered under Udyam, making it easier for them to access government contracts and projects.
Suggested Read: Print Udyam Application
In conclusion, Udyam registration is an important step for any MSME in India. It provides legal recognition, access to government schemes, banking benefits, marketability, protection against delayed payments, statutory compliances, priority sector lending, tax benefits, reduced fees, easy access to information, access to credit, and the ability to apply for government tenders. These benefits can help MSMEs grow and develop, access credit, and compete in the market. Udyam registration is a simple process that can be completed online, and MSMEs should consider registering themselves to avail of these benefits.