In India micro, small and medium-sized businesses (MSMEs) have many hurdles when it comes to maintaining their operations as well as expanding their businesses. They MSMEs are having a difficult time getting loans or cred it from financial institutions and banks. This is why many MSMEs have to shut down their businesses despite employing more than 100 million employees and contributing substantially to the nation’s GDP.
The Government of India proposed the 2020 initiative to assist MSMEs in overcoming this challenge. As per this scheme it is required that all MSMEs must be registered as MSMEs when they have been established in order to qualify for a variety of attractive benefits provided by the government.
Although registration with UDYAM is not a requirement however, it provides MSMEs with multiple advantages in running their businesses in India that can help them overcome not just financial, but other logistical and operational challenges.
If you’re looking to apply for an MSME within the scheme described above, this article can aid you. It offers a thorough outline of the UDYAM registration procedure
UDYAM Registration – What is it all about?
In the past, MSMEs in India were registered under the Udyog Aadhaar Memorandum scheme that is now the UDYAM scheme has been able to replace. With the UDYAM scheme the majority of MSMEs will be issued an electronic certificate that will allow them to be eligible for various benefits and government programs.
The UDYAM registration procedure is easy and doesn’t require any complex papers or formalities. Each registered MSME receives a unique number that is known as”the” UDYAM Registration Number. The registration number is the permanent identification of the MSME for the entirety of its life.
Who is Eligible for UDYAM Registration?
All manufacturing, trading MSMEs that deal in service and manufacturing can apply to apply for UDYAM registration. It is the Government of India has defined the eligibility criteria in this manner:
- Micro-Enterprises – Businesses who’s capital investment is at a maximum of 1 crore, and whose annual turnover of less than five crores.
- Small-scale Enterprises – Businesses whose the capital invested in their assets is up to Rs 10 crores and whose annual turnover is less than 50 crores
- Medium-sized Enterprises – Businesses that’s investments in their assets are up to Rs 50 crores, and whose annual turnover is less than 250 crores
Any kind of entity that belongs to one or all of these types may apply to apply for UDYAM registration. This includes partnership companies sole proprietorships, Hindu Undivided Families, Private Limited Companies, Limited Liability Partnerships, Limited Liability Partnerships, Cooperative Societies, and many more.
What is the Process of UDYAM Registration?
These are steps needed to obtain UDYAM Registration Certificate online. UDYAM registration certificate:
- Click on the official portal for UDYAM Registration – https://udyamregistration.gov.in/Government-India/Ministry-MSME-registration.htm
- Choose “For New Entrepreneurs who are not registered yet as MSME or those with EM-II”
- Enter the Aadhaar Number and the Entrepreneur’s Name on the next page. Once you’ve entered the information then click on the button “Validate and Generate OTP.”
- Then you will be sent an OTP to your Aadhar linked phone number. Enter these details and then click on “”
- Following successful Aadhaar verification, you’ll soon be on your PAN Verification page. Input the information such as the name of company and the PAN. Click on Validate. If you have an GST number, or had filed tax returns, click the appropriate details.
- Now, you will see the UDYAM Registration form appear on the screen. Complete all of the required information, including the entrepreneur’s name, the name of the company and bank information including mobile number, employee number, the information about the status that the company unit is in and more.
- Then, you must enter the information about the MSME to be completed with care. This includes information like investment in assets (plant machinery, equipment, etc.) as well as the annual turnover. Additionally, you can use the self-declaration button to confirm that the information you have provided is correct. Fill in the information and create the OTP.
- Select to enter the OTP you received on your phone and complete the form. Once you’ve completed the form you will receive your UDYAM Registration Certificate via your email address that you registered. It is possible to download the certificate quickly to prove your registration’s success.
- The certificate will include an individual MSME registration number. These details can be provided to be eligible for the incentives that the government offers to MSMEs.
MSME Payment Terms as per the New Scheme
The new UDYAM scheme the MSME terms of payment are as the following:
- Buyers are required to pay the sellers of services or goods in the first 45 days following transaction’s acceptance. This applies regardless of whether the buyer and the supplier have agreed to a credit term greater than 45 calendar days.
- In the event of a delay in payment the buyer is required the obligation to make interest payments on payment. The interest rate is nearly triple the rate that is set by the Reserve Bank of India.
- In the event that buyers or MSMEs aren’t able to agree on terms for credit, payments should be made within 15 working days of buyers receiving goods or services from MSMEs.
- MSMEs are able to make a complaint to MSEFC for complaints about Micro and Small Enterprises Facilitation Council (MSEFC) for ongoing delay or non-payment by the buyer.
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Bottom Line
Although not required It is advisable that MSMEs in the early stages of applying for UDYAM registration as soon as possible. This certification will guarantee they have access to programs offered by the government at subsidised rates with quick and hassle-free funding options and obtain loans with lower rates of interest.
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