MSME Udyam Registration

What is Udhyam Registration

Udyam Registration is a government registration for MSME that provides them a unique Identity Number and a recognition certificate to certify them as micro/small/medium enterprises. The following enterprises are eligible for Udyam Registration.

Who are eligible for Udyam Registration:

Proprietor
HUF
Partnership
Co-Operative
Private Limited Company
Public Limited Company
Self Help Group
Limited Liability Partnership
Society
Trust or
others type of organization

Any enterprise is eligible for udyam registration either engaged in manufacturing, manufacturing process, maintenance of goods, trading or rendering services.

How to classify a unit as a micro, small or medium enterprise:

(i) a micro enterprise, where the investment in plant and machinery or equipment does not exceed one crore rupees and turnover does not exceed five crore rupees;
(ii) a small enterprise, where the investment in plant and machinery or equipment does not exceed ten crore rupees and turnover does not exceed fifty crore rupees; and
(iii) a medium enterprise, where the investment in plant and machinery or equipment does not exceed fifty crore rupees and turnover does not exceed two hundred and fifty crore rupees.

What are are benefits:

1. It provides protection from delayed payments and early resolution of disputes

MSMEs firms face the risk of delayed payments which in turn disturbs their entire business. In order to protect registered companies, the Supreme Court has mandated that any buyer of goods or services from registered MSMEs is required to make the payment on or before the agreed date of payment or within 15 days from the day they had accepted the goods or services. If the buyer delays the payment for more than 45 days after accepting the products or services then the buyer has to pay interest on the amount that was agreed to be paid. The interest rate is three times the rate that is notified by the Reserve Bank of India.
To address this issue, the government has launched the Samadhan portal, which enables MSMEs to file complaints against buyers who delay payments.

2. Upon registration of udyam, your enterprise becomes eligible for priority sector lending from Banks.
3. Enjoy Collateral Free Loans under some specific schemes
4. Get the bank loans at the cheaper rate of Interest
5. Get subsidies from National Small Industries Corporation and other Government entities
6. It will also be useful as a proof for opening a current bank account in most of the banks.
7. Enjoy special 50 percent discount on Government fees for Trademark and Patent
8. Get easy access to government licenses, regulatory approvals and legal registrations
9. Get special preference in Procuring Government Tender
10. Get various tax rebates available for Udyam
11.Benefits of Electricity Bills:
Small business owners registered on the Udyam portal can get some concessions on their monthly electricity bills and save their resources.
12.Interest in Overdraft (OD):
MSMEs are eligible under the credit guarantee trust fund scheme to get an advantage on OD and an exemption of 1 percent interest. This minimizes your loan EMI.
13.Stamp duty and registration fees waiver:
All industrial units having Udyam Registration will be exempted from payment of Stamp Duty and Registration fees. Promotion of Timely Payments to MSMEs through Income Tax Act Amendment

14.The new Budget has proposed to include payments to MSMEs under Section 43B(h) of the Income Tax Act 1961, to prompt timely payments. MSME tax deductions for these payments can be claimed only when the payments have been made. 
It will be allowed on an accrual basis (transactions recorded in account books as they occur) only when the payment is made within the time prescribed under the MSME Development Act.

15.Discounting of Invoices at Treds availbale to MSMEs: TReDS is an electronic platform for facilitating the financing / discounting of trade receivables of Micro, Small and Medium Enterprises (MSMEs) through multiple financiers. These receivables can be due from corporates and other buyers, including Government Departments and Public Sector Undertakings (PSUs).
 

Documents required: 

1. Aadhaar number is mandatory for obtaining udyam registration. Following aadhaar number is required based on the type of organization
Proprietorship firm —– Proprietor
Partnership firm —– Managing partner
Hindu Undivided Family —– Karta
Company or a Co-operative Society or a Trust or a Limited Liability Partnership —– Authorised Signatory
2. PAN number of Proprietor required in case of proprietorship/ PAN number of organization in any other cases
3. Bank details of Business —– Copy of passbook
4. GST Number if any
5. Date of the Business commencement
6. No of Employees (With Bifurcation of Male and Female)
7. Self-declared value of investment in plant and machinery or equipment and turnover must be required if no
income tax return has been filed till date. Or The latest audited financial statements
8. Location/Address of Plant(s)/Unit(s)
9. Nature of Business
10. Authority Letter/ Board Resolution
11. Company Incorporation documents

Features of Udyam Registration Certificate
- A permanent registration number is provided to MSMEs on the Udyam registration certificate.

- The Udyam registration certificate is an e-certificate issued on the email of the entrepreneur once the registration is done online.

- The Udyam certificate is valid till the existence of the enterprise; thus, it is not required to be renewed.

- An enterprise cannot apply for more than one MSME registration. Thus, all activities of the enterprise are covered in the Udyam registration certificate.

- A Udyam registration certificate is necessary to obtain loans from banks and benefits provided under various schemes to MSMEs.

- The Udyam registration certifies that an enterprise is covered under the MSME category.

Important Note:
The Government has received various representations and it has been decided to include Retail and wholesale trades as MSMEs and they are allowed to be registered on Udyam Registration Portal. 
However,benefits to Retail and Wholesale trade MSMEs are to be restricted to Priority Sector Lending only. 

Accordingly, the list ofeligible additional activities under NICCode 45,46 and 47 are as under: 

45 Wholesale and retail trade and repair of motor vehicle and motorcycles 
46 Wholesale trade except of motor vehicles and motorcycles 
47 Reail trade except of moter vehicle and moter cycle.

Imortant Link

Nic Code: chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://udyamregistration.gov.in/docs/NIC-code-for-MSME-classification-defination.pdf

Notification/Circular/Order: https://udyamregistration.gov.in/msme-registration-notification/circulars-orders.htm

Activities (NIC codes) not covered under MSMED Act, 2006 for Udyam Registration:chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://udyamregistration.gov.in/docs/OM_regarding_inclusion_of_Traders02072021.pdf