Udyam Registration

 A Detailed Guide on Udyam Registration

Micro, small, and medium-sized enterprises (MSMEs) in India encounter numerous obstacles when attempting to expand their businesses and maintain operations. It is difficult for these MSMEs to obtain loans or credit from banks and other financial organizations. Because of this, many MSMEs are compelled to close their doors, even though they employ nearly 100 million people and make a substantial GDP contribution to the nation.

Udyam Registration was introduced to facilitate business owners' registration of a firm under the Micro, Small, and Medium Enterprise (MSME) category.

This guide by Lawgical Adda aims to provide comprehensive information on the Udyam Registration procedure, its advantages, and the associated paperwork.

What Is Udyam Registration?

The most important question for many aspiring business owners is: What is Udyam registration? You've come to the correct place if you're dealing with this issue.

In India, MSMEs can register online using Udyam Registration. The Ministry of Micro, Small, and Medium Enterprises (MSME) introduced it to replace the previous Udyog Aadhaar registration system. It is the sole official platform for MSME registration.

The government's primary goal in launching this facility was to identify MSME businesses and give them the best possible support to advance the "Atma Nirbhar Bharat Abhiyan," or the Self-Reliant India Scheme of 2020. 

Who is Eligible for Udyam Registration?

Applications for UDYAM registration are open to all MSMEs engaged in manufacturing, trading, and services. The following are the eligibility requirements as established by the Government of India:

1. Micro Enterprises: Businesses with an annual revenue of less than Rs 5 crores and an asset investment of no more than Rs 1 crore are classified as micro-enterprises.
2. Small businesses: Businesses with an annual revenue of less than Rs 50 crores and an asset investment of no more than Rs 10 crores.
3. Medium-Sized Businesses: Businesses with an annual revenue of less than Rs 250 crores and an asset investment cap of up to Rs 50 crores

Any entity that fits into one of the above-mentioned categories can apply for UDYAM registration. These entities include partnership firms, sole proprietorships, Hindu undivided families, private corporations, limited liability partnerships, cooperative organizations, and more.

The Udyam Registration Process

Filling out the forms is a simple process, and the registration process is free of charge.

These days, everything is really easy and effective. The procedure can be followed step-by-step as follows:

Go to the official government website

1. Access the official Udyam Registration portal.
2. Choose the option labeled "For New Entrepreneurs who are not Registered as MSME yet or those with EM- II"

Provide Your Personal Data

Your name and 12-digit unique Aadhar number will be the first details you must provide. To "Validate & Generate OTP," click. An OTP will be sent to the registered mobile number you provided. Type in the OTP.

Pro tip: In the case of New Enterprises, the Aadhaar number of the proprietor in a proprietorship firm, the managing partner in a partnership firm, the Karta in a Hindu Undivided Family (HUF), the authorized signatory in a company, an LLP, a cooperative society, a trust, or a society, will be necessary for Udyam Registration.

Verification of PAN

After choosing your organization type, entering your PAN number, and clicking "Validate," your PAN will be verified.

If a company, limited liability partnership (LLP), cooperative society, society as a whole or trust is involved, the designated signatory must submit his Aadhar number in addition to the PAN and GSTIN of the company, LLP, cooperative society, society, or trust.

Adding Information for Correspondence

Once you have completed all the criteria mentioned above, the company's full postal address is the next information you will need to provide. Additionally, please provide the district, pin code, state, email address, and contact number of your organization.

Enter Bank Information

You must provide the IFSC code of the relevant branch and your company's active bank account number. If you still need to get the IFSCI code, the bank's website has it.

Enterprise Information

You must address your company's primary business activity, which falls under either "manufacturing" or "services." You must also submit the entire number of employees and the National Industry Classification (NIC) Code for Activities.

The final step is to enter the total sum of money (in lakhs) that you have spent in your machinery or plant after filling out all the details.

Choose the District Industry Center, then acknowledge the declaration.

In this process, the district industry center will be chosen from the drop-down list in the last phase. Next, you must select "Submit and Get final OTP" after accepting the declaration.

After entering the OTP you received on your phone, select "Final Submit." Upon selecting "Submit and Get Final OTP," you will receive a registration number. After the government validates your information, an e-registration document will appear in your email address.

What documents are needed for Udyam Registration?

1. The MSME registration procedure is self-declaration-based, entirely online, and paperless.
2. Documentation or other evidence is optional to register an MSME.
3. To register, just the Adhaar Number is required.
4. Government databases will automatically retrieve information about an enterprise's investment and turnover related to PAN and GST.
5. PAN and GST numbers are required as of April 1, 2021.

MSME Terms of Payment under the New Program

The MSME payment terms under the new UDYAM plan are as follows:

1. After the transaction has been accepted, buyers have 45 days to pay the suppliers of goods or services. This rule still holds even in cases where the buyer and supplier have agreed on a credit period longer than 45 days.
2. Buyers are required to pay interest on payments if they are delayed. The interest rate is over three times higher than the Reserve Bank of India sets.
3. If the buyer and MSMEs have not yet agreed upon any credit conditions, payment for products or services should be made within 15 days of the buyer accepting the MSMEs' offer.
4. MSMEs who experience persistent delays or nonpayment from buyers may complain to the Micro and Small Enterprises Facilitation Council (MSEFC).

In conclusion, MSMEs in India should take note of the Udyam Registration procedure. It helps MSMEs grow and thrive and offers a host of other advantages. To benefit from these advantages, it is advised that all MSMEs complete the Udyam Registration process.  Lawgical Adda assists small business owners in obtaining online Udyog Aadhaar registration, Udyam registration, and MSME registration rapidly and simply.