Many people do not know why udyam registration is required in India for small businesses. The advantages of obtaining an udyam registration certificate, as well as access to a variety of government schemes and programmes.
Here we have discussed in detail on udyam registration benefits and how small scale businesses can register their business under the ministry of MSME ie., new udyam registration portal.
By getting your business registered under the department of MSME in India, will result in lots of financial support from the Government of India, and many more.
When Did Udyam Registration Started In India?
The Ministry of MSME introduced the new registration portal called “ Udyam registration portal “ on July 1, 2020.
Before the MSME Development Act of 2006, small scale industrial firms had to register with District Industries Centres (DICs) with respect to the state.
Business people had visited DICs District Industries Centers to register their business, with necessary documents.
Entrepreneurs have to file Entrepreneur Memorandum (EM) part-I at DICs before establishing the MSME, and EM-II after starting production activity, according to the act’s requirements.
Between 2007 and 2015, 21,96,902 EM-II files were recorded, while MSME registrations on the e-filing system under the Udyog Aadhar Memorandum totaled 1,02,32,451 (1.02 crore) between September 2015 and June 30, 2020. (UAM).
The Udyog Aadhaar Memorandum UAM has been replaced by Udyam Registration.
Any business is not required to produce any paperwork or evidence of registration other than their Aadhaar number.
Furthermore, because it is joined with the Income Tax department and GSTIN systems, the udyam registration portal site would immediately extract PAN and GST-linked data on investment in the firm, according to Udyam Registration.
What is Udyam Registration Portal?
Udyam registration portal is a zero cost, paperless, online MSME registration portal for micro, small and medium enterprises.
Click here for Udyam registration.
Let’s clarify some things!
The organisations that are qualified for Udyam Registration are either in the business of manufacturing, producing, processing, or preserving products, or in the business of providing services.
Traders who purchase, sell, import, or export products, in other words, are also eligible to register for Udyam Registration as per the new declaration.
Wholesalers, distributors, retail traders and dealers can now register with the Udyam Registration Portal and be classified as an MSME.
However, you should be aware that an organisation must fulfil a set of requirements in order to be categorised as a medium, small, or micro-enterprise and get MSME registration.
According to the most recent notice,
Classification Types of Enterprises ( for Manufacturing or Service sector, Both)
Investment up to Rs 1 Cr (Rs One Crore) and turnover up to Rs 5 Cr (Rs Five Crore)
Investment up to Rs 10 Cr (Rs Ten Crore) and turnover up to Rs 50 Cr (Rs Fifty Crore)
Investment upto Rs 50 Cr (Rs Fifty Crore) and turnover upto Rs250 Cr (Rs Two Fifty Crore)
Why Udyam Registration is Required?
After registering a business and acquiring Udyam Registration, one will be able to take advantage of a number of benefits. The best part of acquiring Udyam Registration is that it is a straightforward process that does not require one to deal with any paperwork.
There are many reasons for why udyam registration is required. Check out the msme udyam registration benefits down below:
1. Eligible for Government Tenders
As we know India is implementing total digitalization in every sector. Even government tenders are now advertised and submitted electronically via the Central Public Procurement Portal.
The most fundamental need for participating in any government tender is registration on an e-procurement or e-bids website, as this is where tenderers may file (i.e. bid) their tenders.
With udyam registration certificate businesses will be eligible for government tenders and contracts.
2. Collateral Free Bank Loans
All small and micro-businesses in India now have access to collateral-free finance, according to the Indian government udyam schemes and programmes. Bank loans become cheaper as a result of the Udyam certification since the interest rate is very low (up to 1.5 percent lower than ordinary loans).
The udyam scheme provides financial funding to micro and small businesses who are registered under the Ministry of MSME.
Benefits can be claimed by both old and new businesses under this programme. To ensure that this programme is executed, the Government of India, SIDBI (Small Industries Development Bank of India), and the Ministry of Micro, Small, and Medium Enterprise established the Credit Guarantee Trust Fund Scheme.
3. Exemption from Overdraft Interest Rates
As per the new policy that varies from bank to bank, businesses and organisations classified as MSMEs can get a 1% discount on their OverDraft. This makes it easier for small enterprises to stay afloat under difficult market conditions.
4. Eligibility for Industrial Promotion Subsidies
Businesses that have been designated as MSMEs are eligible for government-funded Industrial Promotion subsidies. Industrial Promotion Subsidy (IPS) are all available to registered Udyams.
5. Low Electricity Bills
All businesses with an MSME Registration Certificate are eligible for energy bill discounts. This allows firms to increase output and take on more orders without having to worry about capital expenditures such as power and maintenance. Micro, small, and medium-sized businesses can apply for the discount by submitting an application to the Department of Electricity along with the udyam certificate of registration.
6. Reimbursement of ISO Certification Fees
Any registered micro, small, or medium business can request compensation for expenditures incurred in obtaining ISO certification. This encourages entrepreneurs to get their firms ISO accredited, which allows them to do business internationally and export high-quality goods.
Obtaining licences, permits, and registrations becomes simple, regardless of the sector of the company. For government license and certification, firms registered through Udyam are given higher priority.
For Udyam Registration Documents Required
- The new MSME udyam registration procedure is entirely online, without the use of paper, and is based on self-declaration.
- There are no paperwork or evidence requirements for registering an MSME.
- For registration, only the Adhaar Number is sufficient.
- PAN and GST-related information on investment and turnover of businesses would be automatically retrieved from government databases.
- From April 1, 2021, having a PAN and a GST number is required.
How To Register A New Enterprise On The Udyam Registration Portal?
Entrepreneurs may register their firms using Udyam Registration, a paperless and free self-declaration service. Other than their Aadhaar number, businesses are not needed to show any documentation or proof of registration.
The registration for new enterprise on udyam registration portal is very simple and easy, just follow these 5 step
Step 1: Go to the New MSME Udyam Registration portal.
Step 2: Fill out all the details on the application form.
Step 3: Pay for your online application process
Step 4: Once your Udyam registration application is accepted, your business will be registered and the udyam certificate will be given to you
Step 5: A valid certificate will be issued within 3-4 hours via registered email.
Note: For the Udyam registration procedure to continue, you will need to share the OTP with one of our managers.
Hoping you have understood why and When Did Udyam Registration Started In India. If you have any queries related to udyam registration feel free to contact us.
If you are a business owner and looking for a udyam registration certificate, then apply here.
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