In today's fast-growing economy, it is very important to have a recognised and legitimate business. Any business located in India wants to get legal recognition for its business, and this arrangement has been made for MSMEs. They can get recognition for their business. After getting Udyam registration done, their business gets a legal identity. Apart from this, doors of many opportunities also open. Such as getting loans at cheaper rates, getting the benefit of government schemes, etc. Whether you are a small business owner or a startup founder,Udyam registration can change your journey. After getting the Udyam registration done, you will receive a Udyam registration number. This number is very important for your MSME.

In this article, we will know why Udyam Registration is necessary and how you can apply easily.

What is Udyam Registration?

Udyam Registration is a government-issued certification process launched by the Ministry of Micro, Small, and Medium Enterprises. It provides a unique 19-digit Udyam Registration Number along with a Udyam Registration Certificate that officially recognises your business as an MSME. Earlier known as Udyog Aadhaar, it was replaced by Udyam Registration on 1st July 2020, as it aims to make the process even simpler and more efficient for MSMEs.

Why should you register to get a Udyam Registration Number?

Official Government Recognition

The Udyam Registration Certificate is proof that your business is registered as an MSME. It provides a legal identity to your business under the laws of India, which is often required whenever you want to take a loan or avail of any government scheme.

Access to MSME Benefits

Those MSMEs that remain registered can avail several benefits. Such as

• Get a loan without pledging anything under the Credit Guarantee Fund Scheme

• Interest rate subsidy on a loan

• Protection against delayed payments from buyers

• 50% subsidy on patent/trademark registration

• Reduced cost of ISO certification

• Preference in government tenders and GeM portal access

Easier Bank Loan Approvals

Banks prefer to give loans to Udyam-registered businesses because they are officially recognized and the good thing is that there are many MSME loan schemes. They are eligible for that too.

Tax and Compliance Benefits

Though Udyam registration does not provide any direct tax exemption, it simplifies tax compliance and eases the documentation process, and also provides a lot of tax benefits.

Improves credibility in the market

A Udyam Registration Certificate can build your trust. Just because of a certificate, your customers, suppliers, and partners are able to trust you and know that your business is legitimate and is following all the government norms. 

Who can apply for Udyam Registration?

The following business types are eligible:

• Proprietorships

• Partnerships

• Limited Liability Partnerships (LLP)

• Private Limited Companies

• Hindu Undivided Families (HUF)

• Co-operative Societies

• Trusts and other small businesses

Important: To register as an MSME, a business must fall within the definition of MSME which is based on investment in plant & machinery and annual turnover.

• Micro: Investment ₹2.5 crore and annual turnover ₹10 crore

• Small: Investment ₹25 crore and annual turnover ₹100 crore

• Medium: Investment ₹125 crore and annual turnover ₹500 crore

Documents Required for Udyam Registration

The good thing is that there is no need for a lot of paper while getting the Udyam registration done. There are just a few documents which you have to fill in the registration form with the information, and it is completely based on self-declaration. 

You will need all these things whenever you fill out the Udyam registration form.

• Aadhaar number of the proprietor or business owner

• PAN card of the business and/or the owner

• GST number (if applicable)

• Business address and basic details

• Bank account details

Note: No physical documents are to be uploaded. Just enter your details correctly.

How to apply for Udyam Registration: a step-by-step process?

Applying for Udyam registration is very simple. You can register your MSME on the Udyam Registration Portal. Just follow the given steps.

Step 1: First of all, go to the official registration portal.

Step 2: Fill out the Udyam registration form

• Enter all the details in the given form

Step 3: Enter Aadhaar Details

• Enter your Aadhaar number and validate it using OTP. If you’re a proprietor, enter your personal Aadhaar. For other entities (like partnerships or companies), use the Aadhaar of an authorized signatory.

Step 4: PAN and Business Verification

• You’ll be asked to provide your PAN number and some business details. The system will auto-fetch details from the Income Tax and GST databases.

Step 5: Fill in Business Details

Provide:

• Type of organization

• Business address

• Bank account details

• Number of employees

• Investment and turnover details

Step 6: Final Submit

• After verifying all details, click on “Submit and Get final OTP”. Enter the OTP, and you’re done!

You will receive:

• A 19-digit Udyam Registration Number

• A downloadable Udyam e-certificate

You Can Apply for Update Udyam Certificate Through Udyam Portal

Conclusion: Start Growing With Your Udyam Number

Getting Udyam registration is not a formality. It is very important for your business because, due to this, your business gets government assistance, market recognition, and financial opportunity. This process is very simple and completely online. You can register your MSME in just a few minutes. 

If you are an entrepreneur or are going to establish a new small business, don't wait. Register your MSME today and take your step towards India's formal economy.