Udyam Registration for Companies: Benefits and Steps to Follow

Udyam Registration
Shivam Narwal
| Updated: Apr 13, 2023 | Category: MSME

Udyam Registration is a registration process launched by the Ministry of Micro, Small, and Medium Enterprises (MSME) that enables small and medium-sized enterprises (SMEs) to obtain a unique identification number (UIN). The registration is available for companies, partnerships, and proprietorship firms. It is a government scheme that provides recognition to SMEs in India. The scheme aims to promote entrepreneurship and support the growth of these businesses. In this blog, we will discuss the definition, types, benefits, and steps to follow for Udyam registration in detail.

Definition

Udyam Registration is a registration process that provides a unique identification number (UIN) to small and medium-sized enterprises in India. The UIN is provided to enterprises that fall under the definition of a Micro, Small, or Medium Enterprise. The registration process is done online, and the UIN is valid for a lifetime. The Ministry of MSME launched the Udyam Registration[1] scheme to provide recognition to SMEs in India and to promote entrepreneurship in the country.

Who are eligible?

There are three types of enterprises that are eligible for Udyam registration: Micro, Small, and Medium Enterprises. The definition of each type is as follows:

  • Micro Enterprises: Businesses with an investment of up to Rs. 1 crore and a turnover of up to Rs. 5 crores.
  • Small Enterprises: Businesses with an investment of up to Rs. 10 crore and a turnover of up to Rs. 50 crores.
  • Medium Enterprises: Businesses with an investment of up to Rs. 50 crore and a turnover of up to Rs. 250 crores.

The government of India recognizes these three types of enterprises as the backbone of the Indian economy. They provide employment opportunities to millions of people and contribute significantly to the country’s GDP.

Types of Udyam Registration

There are two types of Udyam registration that an enterprise can apply for, depending on their needs and requirements. The two types are:

  • Udyam Registration for New Entrepreneurs: This type of registration is for enterprises that are newly established and do not have any existing registration under MSME or any other scheme. New entrepreneurs can apply for Udyam registration through the online portal and obtain their unique identification number (UIN) after completing the registration process.
  • Udyam Registration for Existing MSMEs: This type of registration is for enterprises that are already registered under the previous MSME registration process, namely Udyog Aadhaar Memorandum (UAM). Existing MSMEs can migrate their registration to the Udyam registration portal by providing their UAM registration number and other required details. The migration process is free of cost and does not require any additional documents.

Documents Required for Udyam Registration

The following are the essential documents required for Udyam registration:

  • Aadhaar Card: The Aadhaar card is mandatory for the registration process as it serves as proof of identity and address of the enterprise owner.
  • PAN Card: The PAN card is required to verify the details of the enterprise, such as the name and address of the business.
  • Bank Account Details: The bank account details of the enterprise are required to enable online transactions and verify the financial status of the enterprise.
  • Business Address Proof: A valid business address proof is required, such as a rent agreement, utility bill, or property tax receipt.
  • Employee Details: The number of employees working in the enterprise is required to determine the category of the enterprise (Micro, Small, or Medium).

Benefits

Udyam registration provides several benefits to small and medium-sized enterprises in India, including:

  1. Access to various government schemes and subsidies: After obtaining Udyam registration, SMEs are eligible for various government schemes and subsidies. These schemes and subsidies are designed to provide financial assistance to SMEs and help them grow their business.
  2. Eligibility for collateral-free loans under various government schemes: After obtaining Udyam registrations, SMEs can avail themselves of collateral-free loans under various government schemes. These loans are designed to provide financial assistance to SMEs without requiring them to provide any collateral.
  3. Access to credit at lower interest rates: Udyam registered SMEs are eligible for credit at lower interest rates. This is because the government provides incentives to banks and financial institutions that lend to SMEs.
  4. Exemptions in GST and other taxes: After obtaining Udyam registration, SMEs can avail themselves of various exemptions in GST and other taxes. These exemptions are designed to reduce the financial burden on SMEs.
  5. Easier to obtain licenses and approvals: Udyam-registered SMEs find it easier to obtain licenses and approvals from various government authorities. This is because the Udyam registration certificate serves as proof of the SME’s existence and business activities.

Steps for Udyam Registration

The steps for Udyam Registrations are as follows:

  1. Go to the Udyam Registration website: The website is https://udyamregistration.gov.in/. Click on the “New Entrepreneurs Registration” button to start the registration process.
  2. Fill in the required details such as Aadhaar number, PAN number, and business details: The first step of the registration process requires you to enter your Aadhaar number, PAN number, and other details about your business.
  3. Upload the necessary documents such as a photograph, Aadhaar card, and a business PAN card: The next step requires you to upload the necessary documents such as a photograph, Aadhaar card and business PAN card.
  4. Enter the details of your business activities: In this step, you will need to enter the details of your business activities, including the sector in which your business operates, the type of enterprise, and the location of your business.
  5. Submit the registration form and make the payment: After filling in all the necessary details, you will need to submit the registration form and make the payment. The fee for Udyam registration varies depending on the type of enterprise.
  6. Receive the Udyam registration certificate: After completing the registration process and making the payment, you will receive the Udyam registration certificate. This certificate serves as proof of your business’s existence and is required to avail of the benefits provided by the government to Udyam-registered SMEs.

Conclusion

Udyam registration is an essential registration process launched by the Ministry of Micro, Small, and Medium Enterprises (MSME) that provides a unique identification number (UIN) to small and medium-sized enterprises (SMEs) in India. The Udyam registration scheme has been designed to promote entrepreneurship and support the growth of these businesses. It offers various benefits to SMEs, such as access to government schemes, collateral-free loans, lower interest rates, and exemptions in taxes. Udyam registration also makes it easier for SMEs to obtain licenses and approvals from various government authorities.

The registration process is straightforward and can be done online through the Udyam Registration website. All eligible businesses, including companies, partnerships, and proprietorship firms, can register for Udyam. The registration process involves filling in the necessary details, uploading the required documents, and making the payment. Once the registration process is complete, SMEs receive the Udyam registration certificate, which serves as proof of their business’s existence and is required to avail the benefits provided by the government. Overall, Udyam registration is a crucial step for small and medium-sized enterprises in India. It offers various benefits that can help SMEs grow and succeed in their respective industries. The government has recognized the importance of SMEs and is continuously taking initiatives to support and promote their growth. With Udyam registration, SMEs can gain recognition, access financial assistance, and expand their business operations. It is essential to note that Udyam registration is not a one-time process. SMEs must update their registration details on the Udyam Registration website whenever there is a change in their business’s information. This ensures that the government has accurate and up-to-date information on SMEs and can provide them with the necessary support.

In conclusion, Udyam registration is a game-changer for small and medium-sized enterprises in India. It provides them with a unique identification number and access to various government schemes and incentives, making it easier for them to grow and succeed in their respective industries. SMEs must take advantage of this registration process and continue to update their registration details to avail of the benefits provided by the government. With Udyam registration, SMEs can establish themselves as key players in the Indian economy and contribute to its growth and development.

Also Read: Udyam Registration-Meaning, Process and Requirements for Registration

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Shivam Narwal

Shivam Narwal, a motivated final year BBA LLB law student at Chandigarh University, has started his legal career at Swarit Advisors as a legal researcher. With a strong focus on thorough and accurate research, Shivam is dedicated to delivering exceptional results. Throughout his studies, he has shown a deep understanding of the legal system and a drive to excel in the field of Law. 

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